Transactional Analysis
The resulting effect on the balance sheet equation if a company using accrual accounting purchases $400 of computer paper on account.
What is a $400 increase in assets and liabilities?
This journal entry results if a company using accrual accounting bills a client for $10,000 of consulting services that were provided to the client during the current period.
What is a $10,000 debit to Accounts Receivable and a $10,000 credit to Service Revenue?
This adjusting entry is required if a trial balance shows $500 of supplies and $50 of supplies remain on hand at the end of the period.
What is a $450 debit to Supplies Expense and a $450 credit to Supplies?
This closing entry is required to close the dividends account if the adjusted trial balance shows $800 of dividends.
What is an $800 debit to Retained Earnings and an $800 credit to Dividends?
The term used to describe the process of transferring information from the journal entries into the ledger accounts
What is posting?
The resulting effect on a company's balance sheet equation if there is a $100,000 investment in the company.
What is a $100,000 increase in assets and stockholders' equity?
This journal entry results if a company using accrual accounting receives a $1,000 bill from the utilities company on the last day of the period for the current period's utilities
What is a $1,000 debit to Utilities Expense and a $1,000 credit to Accounts Payable?
This adjusting entry is required at the end of the current accounting period if a trial balance shows $100,000 of unearned service revenue and the company provides $10,000 of services during the current period.
What is a $10,000 debit to Unearned Service Revenue and a $10,000 credit to Service Revenue?
This closing entry is required to close out the revenue account if the adjusted trial balance shows $40,000 of Sales Revenue
What is a $40,000 debit to Sales Revenue and a $40,000 credit to Income Summary?
(Close Income Summary by debiting Income Summary and crediting Retained Earnings)
The types of accounts that are increased by debits and decreased by credits
What are assets, expenses and dividends accounts?
The resulting effect on the balance sheet equation if a company pays $25,000 in dividends.
What is a $25,000 decrease in assets and stockholders' equity?
This journal entry is recorded on the date a company using accrual accounting borrows $10,000 and signs a 2%, six-month note
What is a $10,000 debit to Cash and a $10,000 credit to Notes Payable?
This adjusting entry is required at the end of the current accounting period if a company uses $500 of utilities during the current period and the utilities bill arrives during the next accounting period.
What is a $500 debit to Utilities Expense and a $500 credit to Accounts Payable?
An example of an account that is not closed at the end of the period
What is a balance sheet account (Ex. asset, liability, common stock and retained earnings)?
The amount of net income or net loss recorded this period if a company using accrual accounting has the following events during the current period:
Provides $2,000 of goods on account
Pays $4,000 for next period's utilities
Pays $500 for the current period's advertising
What is $1,500 of net income?
$2,000 Sales Revenue - $500 Advertising Expense = $1,500 Net Income
The resulting effect on the balance sheet equation if a company using accrual accounting purchases $80,000 of equipment, pays $20,000 cash and signs a 2%, five-year note for the balance.
What is a $60,000 increase in assets and liabilities?
This journal entry results if a company using accrual accounting pays $500 for airline tickets for a trip that will take place during the next accounting period
What is a $500 debit to Prepaid Tickets and a $500 credit to Cash?
This adjusting entry is required at March 31, 2023, if a company using accrual accounting borrows $8,000 on January 1, 2023, signs a 2%, six-month note and issues financial statements every March 31
What is a $40 debit to Interest Expense and a $40 credit to Interest Payable?
$8,000 x .02 x 3/12 = $40
The types of accounts that are closed at the end of the accounting period
What are revenues, expenses and dividends?
This type of trial balance lists account balances for the next accounting period
What is a post-closing trial balance?
The resulting effect on the balance sheet equation if a company using accrual accounting receives a $500 cash advance for services that will be provided during future accounting periods
What is a $500 increase assets and liabilities?
This journal entry results if a company pays a $5,000 existing obligation?
What is a $5,000 debit to Accounts Payable and a $5,000 credit to Cash?
This adjusting entry is required at the end of the current accounting period if a trial balance shows $50,000 of equipment and the company depreciates the equipment at a rate of $1,000 each period.
What is a $1,000 debit to Depreciation Expense and a $1,000 credit to Accumulated Depreciation?
This type of account is NOT listed on a post-closing trial balance?
What is a temporary account (Ex. revenues, expenses and dividends)?
The required steps in completing the accounting cycle for a company using accrual accounting
What is journalizing, posting entries to the ledger, creating a trial balance, preparing and posting adjusting entries, preparing an adjusted trial balance, preparing financial statements, preparing and posting closing entries and preparing a post-closing trial balance?