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Which of the following is not true about double-entry bookkeeping?
Which of the following entries could Yeats Company not make when they perform a service for a client?
Figure 4.22
Figure 4.23
Figure 4.24
Figure 4.25
Which of the following is a transaction for Tyler Corporation?
Elenor Company sells 400 units of inventory for $40 each. The inventory originally cost Elenor $26 each. What is Elenor’s gross profit on this transaction?
Which of the following increases with a debit?
In January, Rollins Company is paid $500 by a client for work that Rollins will not begin until February. Which of the following is the correct journal entry for Rollins to make when the $500 is received?
Figure 4.26
Figure 4.27
Figure 4.28
Figure 4.29
The accountant for the Babson Corporation determines that the current Cash balance held by the company is $32,564. Which of the following could not have been the source of that information?
In the accounting system for the Caldwell Company, which of the following comes first?
Which of the following T-accounts is least likely to have a credit balance?
The Brooklyn Corporation rents a building for $100 per day. The company’s accounting system accrues this expense each day. After twelve days, payment is made. What account is debited when that payment is made?
The Bronx Corporation rents a building for $100 per day. The company’s accounting system makes no recognition of this expense as it accrues. After twelve days, payment is made. What account is debited when that payment is made?
Professor Joe Hoyle discusses the answers to these two problems at the links that are indicated. After formulating your answers, watch each video to see how Professor Hoyle answers these questions.
Your roommate is an English major. One of the roommate’s parents works as an accountant for the family’s business, a corporation that owns a number of ice cream stores in Florida. The parent is constantly talking about working with debits and credits, which seems like some foreign language to your roommate. One day, on the way to the fitness center, your roommate blurts out this question: “What in the world are debits and credits? How can they possibly be so important?” How would you respond?
Your uncle and two friends started a small office supply store at the beginning of the current year. Almost immediately, it becomes obvious to them that they need some system for keeping their financial records. They will eventually have to report their income taxes, and they may well need monetary information for a bank loan. Your uncle knows that you are taking a financial accounting course in college. He sends you an e-mail and asks if you can provide some suggestions on getting started with this record-keeping process. He realizes that you have just started your course, but he hopes that you can give him some basic ideas on how to gather the needed information. How would you respond?
For each of the following transactions of the Hamner Corporation, indicate what accounts are affected and whether they increase or decrease.
For each of the following is a debit or credit needed to reflect the impact?
Record the following journal entries for Taylor Company for the month of March:
For each of the following transactions, determine if Raymond Corporation has earned revenue during the month of May and, if so, how much has been earned.
The following are the account balances for the Ester Company for December 31, Year Four, and the year that ended. All accounts have normal debit or credit balances. For some reason, company accountants do not know the amount of sales revenue earned this year. What is the balance of that account?
Figure 4.30 Trial Balance—Ester Company
State whether a debit or credit balance is normal for each of the following T-accounts:
Near the end of her freshman year at college, Heather Miller is faced with the decision of whether to get a summer job, go to summer school, or start a summer dress-making business. Heather has some experience designing and sewing and believes that third option might be the most lucrative of her summer alternatives. Consequently, she starts “Sew Cool.”
During June, the first month of business, the following occur:
Sew Cool’s taxes, paid in cash, amount to $87.
Required:
Bowling Corporation had the following transactions occur during January:
Bowling paid taxes in cash of $45,000.
Required:
Complete the following T-accounts. Numbers already under the accounts represent the prior balance in that account.
Figure 4.31 Opening T-Account Balances
The following events occurred during the month of January for McLain Company.
Required:
Complete the following T-accounts. Numbers already under the accounts represent the prior balance in that account.
Figure 4.32 Opening T-Account Balances
A newspaper company collects money for subscriptions before its newspapers are physically delivered. How large is that liability, and when does it become revenue?
Go to http://www.nytimes.com/. At The New York Times Web site, scroll to the bottom of the screen and click on “The New York Times Company.” Click on “Investors” at the top of the next screen. Click on “Financials” on the left side of the next screen. In the center of the next page, click on “2010 Annual Report & Form 10-K” to download.
After the document has downloaded, scroll to page 63 to look at the company’s balance sheet. Does The New York Times Company report any unearned revenue within its liabilities?
Next, scroll to page 72. Within the notes to financial statements, a description is provided of the revenue recognition procedures used by The New York Times Company. What information is presented to decision makers by the last sentence in the fourth bullet point?