Acc2207 – online – version b

  

ACC2207 – Online – Version B – 

Question 1: 8 Marks – 15 Minutes

Below are all the accounts of the Accounts Payable Subledger as at January 31, 2022 for Quality Mechanical.

  

School   Board

 

Balance

 

Date

Explanation 

P. R.

Debit 

Credit 

Cr

 

Jan

31

Balance

11,200.00

 

 

 

Hospital

 

Balance

 

Date

Explanation 

P. R.

Debit 

Credit 

Cr

 

Jan 

31

Balance

8,900.00

 

 

 

PEC Co.

 

Balance

 

Date

Explanation 

P. R.

Debit 

Credit 

Cr

 

Jan

31

Balance

4,065.00

 

 

 

City of QW

 

Balance

 

Date

Explanation 

P. R.

Debit 

Credit 

Cr

 

Jan

31

Balance

5.798.00

 

 

 

DEF Corp

 

Balance

 

Date

Explanation 

P. R.

Debit 

Credit 

Cr

 

Jan

31

Balance

9,001.00

 

 

 

Malwart

 

Balance

 

Date

Explanation 

P. R.

Debit 

Credit 

Cr

 

Jan

31

Balance

7,060.00

                  

Question 1 Required:

Part A – Prepare a Schedule of Accounts Payable in proper order at January 31, 2022.

Part B – What is the balance in the Accounts Payable control account at January 31, 2022? 

Place your answer in the related worksheet Q1 in the excel file provided.

Question 2: 15 Marks – 25 minutes

The dental practice of Pamela Bell, DDS, has the following account balances for the month of September, 2023.

P. Bell, Capital (September 1)…………………………….  $42,000

Accounts payable……………………………………………….  7,000

Equipment………………………………………………………….  30,000

Service revenue………………………………………………….  25,000

P. Bell, Drawings………………………………………………..  6,000

Dental education expense………………………………….  4,200

Cash…………………………………………………………………..  8,000

Dental supplies…………………………………………………..  2,800

Salaries expense………………………………………………..  9.000

Accounts receivable……………………………………………  14,000

Required

A. Prepare an Income Statement for the month Ended September 30, 2023.

B. Prepare a Statement of Owner’s Equity for the month Ended September 30, 2023.

C. Prepare a Balance Sheet for September 30, 2023.

Place your answer in the related worksheet Q2 in the excel file provided

Question 3: 26 marks – 35 minutes

Below are the transactions for November 2022, for The Widget Company. Owner, Marla James has asked you the office manager to record the transactions into the correct journal. She has supplied you with the following journals, General Journal, Sales Journal, Cash Receipts Journal, Purchase Journal and Cash Payments Journals

Transactions for November:

Nov 1 – Marla James invested $ 12,500 in the card store.

Nov 1 – Paid this​ months’ rent to Howard ​Realty, cheque No. 1001 $2,800. 

Nov 1 – Purchased merchandise from Upper-Card Company on​ account, $ 5,600. Invoice No.​ 710, dated Nov ​1, terms 2​/10, ​n/30. 

Nov 2 – Sold merchandise to Jas Investors on​ account, $ 1,900. Invoice No.​ 602, terms 2​/10, ​n/30. Cost of Goods sold was $1,100.

Nov 9 – Sold merchandise to Los Cabos on​ account, $ 1,000. Invoice No.​ 603, terms 2/10, ​n/30. Cost of Goods Sold was $550.

Nov 10 – Paid Able Cleaning Service $ 320. Cheque No. 1002. 

Nov 11 – Paid Upper−Card Company invoice No.​ 710, dated May 1, cheque No.​ 1003, taking discount. 

Nov 12 – Los Cabos returned merchandise that cost $ 100 to the Widget Company. Marla issued credit memorandum No. 1 to Los Cabos for $ 100. All goods were returned to inventory, the cost of the goods returned was $26.

Nov 12 – Purchased merchandise from Kaelynn Imports on​ account, $ 4,600. Invoice No.​ 311, dated Nov ​12, terms 1​/15, ​n/60.

Nov 14 – Sold $ 1,800 worth of card merchandise for cash. Invoice No. 604. Cost of goods sold was $875.

Nov 15 – Returned merchandise to Kaelynn Imports in the amount of $ 1,300. The Widget Company issued debit memorandum No. 1 to Kaelynn Imports. 

Nov 16 – Received payment from Los Cabos​, invoice No. 603​ (less returned​ merchandise), less discount.

Nov 16 – Jas Investors paid invoice No.​ 602, no discount.

Nov 23 – Paid Kaelynn Imports balance​ owed, cheque No.​ 1004, less returns and discounts.

Nov 28 – Received invoice $1,300 from Able Cleaning service, for cleaning the basement of the building. Invoice # 148 to be paid in 30 days.

Nov 30 – Marla made cheque No. 1005 payable to her son’s school for tuition in amount of $2,000.

  

Chart of   Accounts

 

Assets

Revenue

 

101

Cash

400

Sales

 

104

Accounts   Receivable

401

Sales   Discounts

 

106

Inventory

404

Sales Returns   and Allowances

 

Liabilities

Expenses

 

204

Accounts   Payable

500

Maintenance   Expense

    

505

Cost of Goods   Sold

 

Owner’s Equity

520

Rent Expense

 

300

M. James,   Withdrawals

 

301

M James,   Capital

 

 

Required:

Part A – Journalize the transactions for the month of November in the correct journal. (Explanations are not required on any entry in the general journal).

Part B – Total Each Column of Each Journal as required.

Part C – Provide Posting references as if each entry had been posted. The Chart of Accounts will assist with this part.

Please place your answer in the related worksheets labelled Q3 in the excel file 

provided.

Question 4: 30 marks – 45 minutes

Multiple Choice: Place your answer in the related worksheet Q4 in the excel file provided.

1. The type of business organization that can continue indefinitely is known as a:

a. sole proprietorship.

b. partnership.

c. corporation.

d. None of the above

2. Accounts Payable had a normal starting balance of $600. There were debit postings of $350 and credit postings of $200 during the month. The ending balance is

a. $750 credit.

b. $750 debit.

c. $450 debit.

d. $450 credit.

3. Which of the following is NOT part of the Purchasing function?

a. Reconciling the bank account

b. Preparing a Purchase Requisition

c. Recording a payment made to a creditor

d. Verifying the accuracy of a creditor’s invoice

4. Which of the following is correct when speaking about a business’s assets?

a. Assets are things of value owned.

b. Assets must always equal Liabilities. 

c. Assets are shown at their current value.

d. Assets are disclosed on the Income Statement.

5. Assets are equal to

a. liabilities + owner’s equity.

b. liabilities – owner’s equity.

c. liabilities – revenues.

d. revenues – expenses.

6. The process that begins with recording business transactions and includes the completion of the financial statements is the

a. calendar year.

b. natural business years.

c. fiscal year.

d. accounting cycle.

7. The first step of the accounting cycle is

a. recording journal entries.

b. posting to the ledger.

c. preparing a trial balance.

d. analyzing business transactions

8. Which of the following is NOT a main type of Special Journal?

a. Sales Journal

b. Personnel Journal

c. Cash Receipts Journal

d. Cash Payments Journal

9. Accounts of a single type are kept in this ledger.

a. supplemental ledger.

b. additional ledger.

c. subsidiary ledger.

d. None of these answers are correct.

10. Which of these statements about “T” accounts is FALSE?

a. They are used mainly in classroom demonstrations.

b. They have both a left side and a right side.

c. They are used extensively in computer accounting.

d. Each account has a normal balance which is either a debit or a credit.

11. During the month of October, Ford advertised on the Internet. Ford received the bill for $600 in October, but waited until November to pay the advertising expense. The journal entry to record the payment in November is

a. Accounts Payable debit; Cash credit.

b. Advertising Expense debit; Accounts Payable credit.

c. Advertising Expense debit; Cash credit.

d. A journal entry is not made in November.

12. Bookkeeping is primarily

a. preparing financial reports.

b. analyzing the company’s financial position.

c. record-keeping.

d. preparing tax reports

13. The left side of any account is the

a. debit side.

b. credit side.

c. ending balance.

d. footings.

14. The process of initially recording business transactions in a journal is called

a. sliding.

b. posting.

c. Journalizing.

d. Transposing.

15. Renzi’s Volleyball Gym purchased equipment for $1,400. It made a down payment of $800 with the remainder on account. The journal entry to record this transaction is

a. Cash  800

 Accounts Receivable  800

b. Accounts Payable  600

 Cash    800

  Equipment  1,400

c . Supplies  1,400 

 Cash    800

 Accounts Payable  600

d. Equipment  1,400

 Accounts Payable  600

 Cash  800

16. The proper format for a journal entry includes all of the following EXCEPT

a. the total amounts of debits must equal the total amount of credits.

b. skip a line between transactions.

c. the credit portion of the transaction is always first.

d. listed in chronological order.

17. Credit terms of 1/10, n/30 mean that

a. 1% discount is allowed if the bill is paid within 10 days, or the entire amount is due within 30 days.

b. a discount is allowed if the bill is paid within 30 days.

c. a discount is allowed if the bill is paid after 10 days.

d. a 1% discount is allowed if the customer pays the bill within 30 days.

18. When using a subsidiary ledger, the Accounts Receivable account in the general ledger is called the

a. master account.

b. subsidiary account.

c. receivable account.

d. controlling account

19. Which of the following is a characteristic of a sole proprietorship?

a. Business owned by more than one person

b. Easy to form

c. Each stockholder acts as an owner of the company

d. Can continue indefinitely.

20. Which account is not used with a perpetual inventory system?

a. Sales Returns and Allowances

b. Purchase Returns and Allowances

c. Inventory

d. Cost of Goods Sold

21. If the beginning capital was $14,000 and in a fiscal period there was revenue of $8,000, withdrawals of $3,000, and expenses of $1,500 then the ending capital would be

a. $26,500.

b. $23,500.

c. $17,500.

d. $20,500.

22. Cash had a normal starting balance of $600. There were debit postings of $200 and credit postings of $300 during the month. The ending balance is

a. $500 credit.

b. $1,100 debit.

c. $500 debit.

d. $1,100 credit.

23. “PR” in the general journal and general ledger stands for

a. peer reviewer.

b. posting reference.

c. prior receipt.

d. None of the above are correct.

24. The main reason most businesses do not use only a General Journal is

a. a General Journal is much too inefficient.

b. a General Journal is prone to many errors.

c. two or more clerks cannot use the General Journal at the same time.

d. both A and C are correct

25. The arrangements between buyer and seller as to when payments for merchandise are to be made are called

a. credit terms.

b. net cash.

c. cash on demand.

d. gross cash.

26. Which of the following statements about subsidiary ledgers is most accurate?

a. The subsidiary ledger accounts will never equal the control account in the general ledger.

b. The accounts receivable subsidiary ledger is a book of accounts that provides supporting detail for Accounts Receivable.

c. The subsidiary ledger accounts will equal the amount in the Sales account.

d. All of these answers are correct.

27. A form used in business to place an order for the buying of goods from a seller is

a. purchase requisition.

b. purchase order.

c. purchase discount.

d. purchases returns.

28. The side that increases the account balance, by the rules of debit and credit, is said to be the

a. debit side.

b. credit side.

c. normal balance.

d. None of these answers are correct.

29. The twelve-month period a business chooses for its accounting period is a(n)

a. calendar year.

b. accounting period.

c. fiscal year.

d. accounting cycle.

30. A chart of accounts

a. is set up in alphabetical order.

b. includes account balances.

c. is a listing of all the accounts used by a company.

d. All of the above are correct.