1
Assignments 3
1.Vocabulary
Put (/) in the appropriate column.
Items / Assets / Liabilities / Equity1. Cash
2. Equipment
3. Building
4. Loan
5. Accounts Payable
6. Note Receivable
7. Drawing
8. Supplies
9. Capital
Items / Revenues / Expenses
1. Interest expenses
2. Depreciation expenses
3. Rent expenses
4. Loan fees
5. Bank charges
6. Salaries
7. Interest revenues
8. Service revenues
9. Utilities expenses
2.Matching
•Referring to the terms listed in the left column, place the appropriate letter next to the corresponding description.
………………….1.Entry involving more than one debit and/or credit.
……2. Recording in the ledger the information contained in the journal.
……3. This procedure is related to the duality concept indicating that every
transaction has a two-side effect.
…….4.Synonym for debit.
…….5. Provides a proof of the arithmetic accuracy of the recording process by
listing the ledger accounts and their debit or credit balances.
…….6.Entry involving only one debit and one credit.
…….7. Is a chronological record of all business transactions and may also be
called the book of original entry.
…….8. Placing of the ledger account numbers in the positing reference column
of the journal and placing the journal page number in the posting
reference column of the ledger account.
……..9.Entering of a transaction in the book of original entry.
……..10.The right side of an account.
………11. Cost of the use of services or things for the purpose of generating
revenue.
………12.Revenue and expense accounts that appear on the income statement.
3.Multiple Choice Questions
For each of the following questions, indicate the single, best answer by circling the appropriate letter.
1. Which of the following would not fall under the definition of an
asset?
a. Land
b. Debtors
c. Machinery
d. Owner’s equity
2. Which one of the following items would fall under the definition of
a liability ?
a. Cash
b. Debtors
c. Owner’s equity
d. Tax owed
3. Which of the following statements are false?
a. A liability is a debt for your business.
b. Debtors are a debt for your business.
c. The accounting equation shows how much of your assets
belong to the owner, and how much ‘belong’ to people
outside the business.
d. If you cannot work out a value for an item that will bring you
future benefits then you cannot keep this as an asset in your
records.
5. A business has the following items in it:
-Land $1,000,000-Cash $10,000
-Machinery $20,000-Loan $500,000
-Owner’s equity?
What is the value of the Owner’s equity?
a. $ 500,000
b. $1,000,000
c. $ 530,000
d. S1,030,000
6. A business has the follow items in it:
-Owner’s equity $600,000
-Total Liabilities $1,400,000-Assets?
What is the value of the assets in this business?
a. $ 600,000
b. $ 800,000
c. $1,400,000
d. $2,000,000
7. A business has the following items in it:?
-Land $1,500,000-Cash $20,000
-Machinery $80,000-Loan $500,000
-Owner’s equity $900,000-Creditors?
What is the value of the Creditors?
a. $ 200,000
b. $ 700,000
c. $ 800,000
d. $1,100,000
8. A business has the following items in it:
-Land ? -Cash $30,000
-Vehicles $600,000-Loan $500,000
-Owner’s equity $1,000,000-Creditors $50,000
-Debtors $30,000
What is the value of the Land?
a. $ 1,000,000
b. $ 1,550,000
c. $ 890,000
d. S 750,000
9. Which of the following statements are true?
a. A business whose liabilities are greater than
its assets has a had financial position.
b. A business whose liabilities are greater than
its owner’s equity has a bad financial position.
c. A business whose assets are greater than its
owner’s equity has a bad financial position.
d. a and b
10. Mr. Art commenced business with cash. The Journal entry is:
a. Dr. CapitalCr. Cash
b. Dr. CashCr. Mr. Art
c. Dr. CashCr. Capital Mr.Art
d. Dr. CapitalCr. Mr.Art
4.Demonstrations Problem
- Explain each of the sets of Account No. ,debits and credits balance shown in the accounts below John Brown Company.
John Brown Company
Trial Balance
December 31, 2016
Account Titles / amount / Ac No. / Dr. / Cr.Cash / 41,000
Accounts receivable / 3,000
Supplies on hand / 2,000
Unexpired insurance / 5,000
Land / 70,000
Building / 300,000
Accumulated depreciation-building / 30,000
Equipment / 30,000
Accumulated depreciation-Equipment / 6,000
Accounts payable / 6,000
Brown, Capital / 300,000
Brown, Drawing / 5,000
Commissions revenue / 158,000
Payroll expense / 25,000
Depreciation building expense / 15,000
Depreciation equipment expense / 3,000
Utilities expense / 1,000
Total
Required
- Set Accounting Chart
- Set of Debit and Credit balance
- Sum total
(Solution total 500,000)