Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

The basic purpose of a trial balance is to list all of the accounts in the gener

ID: 2577923 • Letter: T

Question

The basic purpose of a trial balance is to

list all of the accounts in the general ledger

list all of the accounts in the general ledger that have a balance

be sure that all journal entries have been recorded

verify that the total credits equal the total debits

3.5 points   

QUESTION 2

A sale on account would be recorded a journal entry by:

Debiting revenue.

Crediting liabilities.

Crediting assets.

Debiting accounts receivable.

3.5 points   

QUESTION 3

On Jan. 1st, 2016, Phoenix Corp. paid $3,000 for 3 months of insurance coverage. Phoenix Corp. uses an accounting period of one month.  
Please 1). make a journal entry to record the payment on Jan. 1st, 2016, and
            2). make an adjusting journal entry required at Jan. 31st, 2016.

Path: p

Words:0

8 points   

QUESTION 4

On August 1, 2018, Rocket Retailers adopted a plan to discontinue its catalog sales division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by June 30, 2019. On January 31, 2019, Rocket's fiscal year-end, the following information relative to the discontinued division was accumulated:
Operating loss Feb. 1, 2018–Jan. 31, 2019:                       $115,000
Estimated operating losses, Feb. 1–June 30, 2019: 80,000
Impairment of division assets at Jan. 31, 2019:               10,000

In its income statement for the year ended January 31, 2019, Rocket would report a before-tax loss on discontinued operations of:

$(65,000)

$(195,000)

$(125,000)

$(115,000)

3.5 points   

QUESTION 5

Fundamental qualitative characteristics of accounting information are:

Relevance and comparability.

Comparability and consistency.

Faithful representation and relevance.

Neutrality and consistency.

3.5 points   

QUESTION 6

In terms of debits and credits, which types of accounts will have the same (debit or credit) normal balances?

dividends, expenses, assets

assets, capital stock, revenues

retained earnings, dividends, liabilities

expenses, liabilities, capital stock

3.5 points   

QUESTION 7

Jet Set Leasing received $6,000 for 12 months rent in advance. How should Jet Set Leasing record this transaction?

Dr. Prepaid rent                 $6000
      Cr. Cash                         $6000

Dr. Prepaid rent                $6000
      Cr. Rent revenue                 $6000

Dr. Rent revenue                $6000
      Cr. Unearned rent revenue        $6000

Dr. Cash                               $6000
      Cr. Unearned rent revenue         $6000

3.5 points   

QUESTION 8

Which of the following items would not be included as a cash flow from operating activities in a statement of cash flows for a retail company?

Payment of income taxes

Collection of interest on a note

Purchase of inventory

Purchase of land

3.5 points   

QUESTION 9

On Feb. 1st, 2015, Phoenix Corp. borrowed $200,000 at a rate of 9% per year. Interest is due on the first day of each month. Phoenix Corp. uses an accounting period of one month.
Please 1). make a journal entry to record the payment on Feb. 1st,2015 and
           2). make an adjusting journal entry required at Feb. 28th, 2015.

Path: p

Words:0

8 points   

QUESTION 10

On Nov. 1st, 2015, Phoenix Corp. received $24,000 from Arcadia High School for 3 months rent in advance. Phoenix Corp. uses an accounting period of one month.
Please 1). make a journal entry to record the payment on November. 1st,2015, and
            2). make an adjusting journal entry required at November. 30th, 2015.

Path: p

Words:0

8 points   

QUESTION 11

During 2016, Tony Romo decided to review Jessica Simpson’s financial statement to control her high expenditures in Mexico. The Jessica Simpson company reports an increase of $20,000 in assets and increase of $10,000 in liabilities. What is the change in her owners’ equity?

$10,000 increase.

$10,000 decrease.

$30,000 increase.

$30,000 decrease.

3.5 points   

QUESTION 12

The distinction between operating and nonoperating income relates to:

continuity of income.

primary activities of the reporting entity.

consistency of income stream.

reliability of measurements.

3.5 points   

QUESTION 13

Making and collecting loans and disposing of property, plant, and equipment are:

Investing activities.

Financing activities.

Operating activities.

Liquidity activities.

list all of the accounts in the general ledger

list all of the accounts in the general ledger that have a balance

be sure that all journal entries have been recorded

verify that the total credits equal the total debits

Explanation / Answer

1. The basic purpose of a trial balance is to: verify that the total credits equal the total debits.

Trial balance is prepared to check the arithmatical accuracy of all the ledgers. If the sum of debit balance equals to the sum credit balances that shows the arithmatical accuracy of the ledger balances made.

2. A sale on account would be recorded a journal entry by: Debiting accounts receivable.

Journal entry for sales on account -

Accounts receivable a/c Dr. $xxx

Sales a/c Cr. $xxx

3. Journal Entries

01.01.2016

Prepaid Insurance A/c Dr. $3000

Cash A/c Cr. $3000

(Insurance coverage for 3 months)

31.01.2016

Insurance exp A/c (3000/3) Dr. $1000

Prepaid Insurance A/c Cr. $1000

(Insurance exp for one month adjusted from prepaid insurance)

5. Accounting information provides mainly the following qualitative characteristics: Reliability,Relevance, Comparability & Consistency.

According to the options provided in the question its hard to choose any one.

6. Assets - Debit bal

Liabilities - Credit bal

Dividends - Debit balance

Capital stock - Credit bal

Revenues - Credit bal

Expenses - Debit bal

Retained earnings - credit bal

So, accounts having same type of normal balances are: dividends, expenses, assets

7. Jet Set Leasing received $6,000 for 12 months rent in advance.

Journal Entry

Dr. Cash A/c $6000

Cr. Unearned rent revenue A/c $6000

Cash is an assets, so having balance debit will be increased by inflow. And rent received for future period is unearned rent revenue having credit balance.

8. Payment of income taxes - Operational activity

Collection of interest on a note - Operational activity

Purchase of inventory - Operational activity

Purchase of land- Investing Activity

So, Purchase of land will not come into Operating activity in the cash flow items.

9. Journal Entries

Feb 01, 2015

Bank A/c Dr. $200,000

9% Loan A/c Cr. $200,000

( Loan taken on 9% interest per annum)

Feb 28, 2015

Interest on loan A/c [(200,000*9%)*1/12] Dr. $1500

Outstanding interest on loan A/c Cr. $1500

(Interest due on 28th feb @9% on $200,000)

10. Journal Entries

Nov 01, 2015

Cash A/c Dr. $24,000

Unearned rent revenue A/c Cr. $24,000

(Rent for 3 months received in advance)

Nov 30, 2015

Unearned rent revenue A/c Dr. $8,000

Rent revenue (24000/3) Cr. $8,000

(Rent for the month of Nov adjusted from unearned rent revenue)

11. Increase in assets = $20,000

Less: Increase in Liabilities =    $10,000

Net Increase in Owner's Equity = $10,000

12. Operating incomes are those incomes which are related to normal course of business function and recurring in nature.

Non operating incomes are not from ordinary course of business function and also may not be recurring in nature.

On these basis Operating and Non-Operating incomes are distinguished.

So, The distinction between operating and nonoperating income relates to: primary activities of the reporting entity. & consistency of income stream.

13. Making & collecting loans & disposing of property, plant, and equipment are of Investing Activities in nature.

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote