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Exam 2: The Recording Process

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Question 21

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Journalise the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transaction. 1. Owner invested $30,000 in exchange for share capital of the company. 2. Hired an employee to be paid $200 per week, starting tomorrow. 3. Paid two years' rent in advance, $7,200. 4. Paid the worker's weekly wage. 5. Recorded revenue earned and received for the week, $1,500.

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Question 22

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Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Salary expense.

A) Debit
B) Credit

C) A) and B)
D) undefined

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Question 23

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Selected transactions for Kookaburra Ltd are listed below. List the number of the transaction and then describe the effect of each transaction on assets, liabilities and equity. Sample: Made initial cash investment in the business. The answer would be - Increase in assets and increase in Equity. -Received cash from customers when service was rendered.

Gwen Stefani decides to incorporate a company and open a pizza bar near the local university campus. Analyse the following transactions for the month of July in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in equity. Transactions: (1) Gwen Stefani invests $25,000 cash in exchange for share capital to start a pizza bar business on July 1. (2) Purchased baking equipment for $5,000 paying $3,000 in cash and the remainder is due in 30 days. (3) Purchased cooking supplies for $1,200 cash. (4) Received an account from Campus News for $300 for advertising in the campus newspaper. (5) Cash receipts from customers for pizza sales amounted to $1,500. (6) Paid salaries of $200 to student workers. (7) Invoiced the Tiger Football Team $100 for pizzas ordered. (8) Paid $300 to Campus News for advertising that was previously invoiced in Transaction 4. (9) Gwen Stefani was paid dividends of $700. (10) Incurred electricity expenses for month on account, $200.

The accounts in the trial balance of Koala Ltd are shown below. Select whether the account balance is normally a debit (Dr) or a credit (Cr) . -Wages expense

For each item , indicate whether a debit or credit applies: -Decrease in Accounts payable

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -A decrease in Accounts payable.

For each of the following accounts indicate: (a) the type of account (asset, liability, equity, revenue, expense) (b) the debit and credit effects (c) the normal account balance. -Insurance expense

A $20,000 machine is purchased by paying $5,000 cash and agreeing to pay for the remainder in 30 days' time, the journal entry should include a:

Selected transactions for Kookaburra Ltd are listed below. List the number of the transaction and then describe the effect of each transaction on assets, liabilities and equity. Sample: Made initial cash investment in the business. The answer would be - Increase in assets and increase in Equity. -Purchased new display case for cash.

Match the items by choosing the appropriate code letter : -Has a credit normal balance

Selected transactions for Kookaburra Ltd are listed below. List the number of the transaction and then describe the effect of each transaction on assets, liabilities and equity. Sample: Made initial cash investment in the business. The answer would be - Increase in assets and increase in Equity. -Invoiced customers for services performed.

For each item below, indicate whether a debit or credit applies: -Decrease in Accounts receivable

For each item , indicate whether a debit or credit applies: -Increase in Revenues

For each item , indicate whether a debit or credit applies: -Decrease in Unearned revenues (Unearned revenue)

An expense incurred:

Eight transactions are recorded in the following T accounts: Indicate for each debit and each credit: (a) whether an asset, liability, share capital, dividends, revenue or expense account was affected (b) whether the account was increased (+) or (-) decreased. Answers should be presented in the following chart form:

Match the items by choosing the appropriate code letter : -Transferring journal entries to ledger accounts.

The accounts in the trial balance of Koala Ltd are shown below. Select whether the account balance is normally a debit (Dr) or a credit (Cr) . -Revenue received in advance

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Rent expense.