CHAPTER 1: INTRODUCTION TO ACCOUNTING AND BUSINESS TEST BANK OF ACCOUNTING 26TH EDITION BY WARREN
The right side of a T account is called the debit side. The left side of a T account is called the credit side. A notation in the post reference column of the general journal indicates that the amount has been posted to the ledger. The post reference notation used in the ledger is the account number. Transactions are initially entered into a record called a journal.
5 Dalton Co. paid $275 freight charges on purchase from Abbott Co. August 1 Purchased $6,000 of merchandise on account, terms 2/10, n/30. Journalize the sale and the recognition of the cost of the sale. May 13, Bargain Wholesalers receives a check from Pet World Supplies paying the balance due on both invoices. On July 5, Marshall pays Express Transfer $45 for freight in on the July 4 order.
Prepare the journal entry to record the payroll tax expense for the period. On June 30 , Brown Company has a credit balance of $2,275 in Allowance for Doubtful Accounts. An evaluation of accounts receivable indicates that the proper balance should be $30,025. Discount Mart utilizes the allowance method of accounting for uncollectible receivables. On December 12 the company receives a $550 check from Chad Thomas in settlement of Thomas’s $1,100 outstanding accounts receivable.
Dec. 31 The accrued product warranty expense for the year is estimated to be 2.3% of sales. Dec. 31 The accrued product warranty expense for the year is estimated to be 2.5% of sales. Martin Services Company provides its employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $39,500 for the period.
Travis Company paid for the merchandise within the discount period. Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the month. The ratio of sales to assets measures how effectively a business is using its assets to generate sales. The single-step income statement is easier to prepare, but a criticism of this format is that gross profit and income from operations are not readily available. If merchandise costing $3,500, terms FOB destination, 2/10, n/30, with prepaid freight costs of $125, is paid within 10 days, the amount of the purchases discount is $70. Estimated Returns Inventory is an account used when adjusting for expected merchandise sales in the next period.
E-commerce provides additional business opportunities but at the cost of reduced speed and efficiency. The term B2C refers to transactions conducted between two companies. The columns included in special journals are standardized for all businesses. The customers ledger and the creditors ledger refer to subsidiary ledgers. The presence of a subsidiary ledger requires the presence of a summarizing control account in the general ledger. The format and number of specialized journals that a business uses depends upon the legal organization of the business.
When a new partner purchases the entire interest of an old partner, the new partner’s capital account should be credited for the amount he or she paid to the old partner. Welcott maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Northern Trust, by the fifteenth of the month following the end of each quarter. Welcott provides its employees with varying amounts of vacation per year, depending on the length of employment.
When an account receivable that has been written off is subsequently collected, the account receivable must first be reinstated before recording the receipt of payment. Match each item to a bank statement adjustment, a company books adjustment, or either. Consider the following information from the cash account.
A business pays weekly salaries of $22,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the fiscal period, assuming that the fiscal period ends on Tuesday, on Wednesday. Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.
Dion Liriano is a 51-year-old American zookeeper who has retired from the business. He was once a highly successful director of the Zoo and Aquarium, but he has since hung up his gloves and moved on to other ventures. Dion's passion for animals began at a young age, when he would help his father care for their family pets. This love grew exponentially when he started working at the zoo; Dion quickly became one of the most experienced keepers in the business. He credits his success to the relationships he built with both staff and animals over the years.