ACC 151 Lecture Notes - Lecture 4: Retained Earnings, Accrual, Accounting Period

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19 Jan 2016

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Analyzing the impact of business transactions on accounts. Record of increases and decreases in a specific asset liability, equity, or expense element. Total of all debits = total of all credits. Specify each account affected by the transaction and classify by type: determine if each account is increased or decreased (debit/credit, record in the journal. Copying information (posting) from the journal to the ledger. All the t-accounts combined make up the ledger. Entering a transaction in the journal does not get the data into the ledger. Data must be copied to the ledger a process called posting. Accounts posted to the ledger accounts: construct and use a trail balance. Records only cash transactions cash receipts and cash payments. Accrual accounting records cash and also noncash transactions, such as following. Accrual of expense incurred but not yet paid. Earning of revenue when cash was collected in advance. Ensures that accounting information is reported at regular intervals.

Related Questions

A company's ledger is:

a. A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item.

b. A journal in which transactions are first recorded.

c. A collection of documents that describe transactions and events entering the accounting process.

d. A list of all identification numbers used by the company.

e. A record containing all accounts and their balances used by the company.

orchidbuffalo895

Hi I need help in financial accounting please..

Listed below are selected accounts.In the dropdowns provided for each account, indicate what type ofaccount it is, its normal balance, and the debit/credit rules forincreasing and decreasing it. Use the following abbreviations foryour answer:

Type ofAccount	Normal AccountBalance	Rules to Increase orDecrease the Account
A = Asset	Dr = Debit	Dr = Debit
L = Liability	Cr = Credit	Cr = Credit
SE = Stockholders' Equity
R = Revenue
E = Expense
D = Dividend

	Type ofAccount	NormalBalance	Rule toIncrease	Rule toDecrease
Example: Cash	A	Dr	Dr	Cr
Accounts Payable	SelectALSEREDItem 1	SelectDrCrItem 2	SelectDrCrItem 3	SelectDrCrItem 4
Retained Earnings	SelectALSEREDItem 5	SelectDrCrItem 6	SelectDrCrItem 7	SelectDrCrItem 8
Prepaid Insurance	SelectALSEREDItem 9	SelectDrCrItem 10	SelectDrCrItem 11	SelectDrCrItem 12
Service Revenues	SelectALSEREDItem 13	SelectDrCrItem 14	SelectDrCrItem 15	SelectDrCrItem 16
Notes Payable	SelectALSEREDItem 17	SelectDrCrItem 18	SelectDrCrItem 19	SelectDrCrItem 20
Intangibles	SelectALSEREDItem 21	SelectDrCrItem 22	SelectDrCrItem 23	SelectDrCrItem 24
Common Stock	SelectALSEREDItem 25	SelectDrCrItem 26	SelectDrCrItem 27	SelectDrCrItem 28
Salary Expense	SelectALSEREDItem 29	SelectDrCrItem 30	SelectDrCrItem 31	SelectDrCrItem 32
Accounts Receivable	SelectALSEREDItem 33	SelectDrCrItem 34	SelectDrCrItem 35	SelectDrCrItem 36
Unearned Revenues	SelectALSEREDItem 37	SelectDrCrItem 38	SelectDrCrItem 39	SelectDrCrItem 40

magentaeagle748

13.
value:
4 points

What would be the appropriate entry for the followingtransaction?
Bill Co. performed $5,200 in consulting services on account

1.Credit to Cash, Debit to Accounts Receivable

2.Debit to Revenue, Debit to Cash

3.Debit to Accounts Receivable, Credit to Cash

4.Debit to Revenue, Credit to Cash

5.Debit to Accounts Receivable, Credit to Revenue

14.
value:
4 points

Which of the following is the appropriate journal entry if acompany performs a service and then bills the customer?

1.Debit to Cash, Debit to Revenue

2.Debit to Cash, Credit to Revenue

3.Debit to Accounts Receivable, Credit to Cash

4.Debit to Revenue, Credit to Accounts Receivable

5.Debit to Accounts Receivable, Credit to Revenue

15.
value:
4 points

Of the following accounts, the one that normally has a creditbalance is:

1.Cash

2.Office Equipment

3.Sales Salaries Payable

4.Dividends

5.Sales Salaries Expense

16.
value:
4 points

For what reason do most sellers require customers to have theirreceipts in order to exchange or return purchased items?

The receipt contains coded information which the seller needs toprepare and analyze the trial balance.

Sellers wish to ensure that the sale in question was rung up on theregister in the first place.

This is a legal requirement mandated by a federal law.

The receipt is serving as a promissory note.

To create an environment in which customer's do not want to returnitems.

17.
value:
4 points

A ledger is:

A record containing increases and decreases in a specific asset,liability, equity, revenue or expense item

A journal in which transactions are first recorded

A collection of documents that describe transactions and eventsduring the accounting process

A list of all accounts with their debit balances at a point intime

A list of all accounts a company uses and includes anidentification number assigned to each account

18.
value:
4 points

Stride Rite has total assets of $425 million. Its total liabilitiesare $110 million. Its equity is $315 million. Calculate the debtratio.

38.6%

13.4%

34.9%

25.9%

14.9%

19.
value:
4 points

The accounting process begins with:

Analysis of business transactions and events

Preparation of financial statements and other reports

Summarizing the recorded effects of business transactions

Presentation of financial information to decision-makers

Preparation of the trial balance

20.
value:
4 points

Which of the following statements is correct?

When a future expense is paid in advance, the payment is normallyrecorded in a liability account called Prepaid Expense

Promises of future payment are called accounts payable

Increases and decreases in cash are always recorded in the retainedearnings account

An account called Land is commonly used to record increases anddecreases in both the land and buildings owned by a business

Accrued liabilities include accounts receivable

21.
value:
4 points

The adjusted trial balance contains information pertainingto:

Asset accounts only

Balance sheet accounts only

Income statement accounts only

All general ledger accounts

Revenue accounts only

22.
value:
4 points

A classified balance sheet:

Measures a company's ability to pay its bills on time

Organizes assets and liabilities into important subgroups

Presents revenues, expenses and net income

Reports operating, investing and financing activities

Reports the effect of profit and dividends on retainedearnings

23.
value:
4 points

If accrued salaries were recorded on December 31 with a credit toSalaries Payable, the entry to record payment of these wages on thefollowing January 5 would include:

A debit to Cash and a credit to Salaries Payable

A debit to Cash and a credit to Prepaid Salaries

A debit to Salaries Payable and a credit to Cash

A debit to Salaries Payable and a credit to Salaries Expense

No entry would be necessary on January 5

24.
value:
4 points

If a company records prepayment of expenses in an asset account,the adjusting entry would:

Result in a debit to an expense and a credit to an assetaccount

Cause an adjustment to prior expense to be overstated and assets tobe understated

Cause an accrued liability account to exist

Result in a debit to a liability and a credit to an assetaccount

Decrease cash

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ACC 151 Lecture Notes - Lecture 4: Retained Earnings, Accrual, Accounting Period

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