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Graduate Business Questions

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Graduate Accounting
The chart of accounts for Baker Company, a wholesale merchant, who uses the accrual basis of accounting is as follows:

A. Cash
B. Accounts receivable
C. Reserve for bad debt
D. Marketable securities
E. Inventory
F. Equipment
G. Accumulated depreciation
H. Prepaid expense
I. Accounts payable
J. Notes payable
K. Deferred income
L. Capital stock
M. Retained earnings
N. Sales
O. Cost of goods sold
P. Other income accounts
Q. Various general and administrative expense accounts
R. Income tax expense

For the monthly transactions listed below indicate (by letter) the account(s) that should be debited and credited:

1. Merchandise for resale is purchased on credit. Debit      E      Credit      I     
2. Payment is received for merchandise previously sold. Debit      A      Credit      B     
3. Marketable securities are sold at a gain. Debit      A      Credit       D,P      
4. The company sells capital stock for cash. Debit      A      Credit      L     
5. Payment is made for the merchandise purchased on credit. Debit      I     Credit      A     
6. Bills for telephone, office supplies and auto repairs are received but not paid
this month. Debit      Q      Credit      I     
7. Merchandise received from a supplier is found defective and returned for credit
before payment has been made. Debit      I      Credit      E     
8. A truck is purchased. The seller accepts a note in addition to a cash down payment.
Debit      F      Credit       A,J      
9. Monthly interest on the note is recorded. Debit      Q      Credit           I(or J)          
10. Merchandise for resale is purchased on credit. Debit      Q      Credit      G     
11. The office rent for the current month is paid. Debit      Q      Credit      A     
12. Merchandise is sold on credit. Debit      B      Credit      N     
13. An estimate of uncollectible accounts is recorded. Debit      Q      Credit      C     
14. An account is written off as uncollectible. Debit      C      Credit      B     
15. Inventory is adjusted to record merchandise sold. Debit      O      Credit      E     
16. Merchandise purchased in a prior month is returned by a customer for credit (show
all related entries). Debit           N&E           Credit           B&O          
17. Expired insurance for the month is recorded. Debit      Q      Credit      H     
18. While reconciling the bank statement it is discovered that the rent check for $500
was recorded in the Journal as $5,000 and a correcting entry is made. Debit      A      Credit      Q     
19. Salesmen's "commissions" were imporperly recorded as "salaries" and a correcting
entry is made. Debit      Q      Credit      Q     
20. Accrued income taxes are paid. Debit      I      Credit      A     
21. A tenant pays one year's rent in advance. Debit      A      Credit      K     
22. A dividend is declared and paid. Debit      M      Credit      A     
Graduate Accounting
What is the accounting equation most stated as?
  1. Owners equity = Liabilities + Assets
  2. Assets = Liabilities + Owners Equity
  3. Liabilities = Assets + Owners equity
  4. All of the above
Graduate Accounting
Which of the following statements is true?
  1. to decrease a receivable, debit the account
  2. to decrease revenue, debit the account
  3. to increase owner's equity, debit the account
  4. to increase an expense account, credit the account
Graduate Accounting
Which of the following statements is false?
  1. to increase cash, debit the account
  2. to increase revenue, credit the account
  3. to decrease a receivable, debit the account
  4. to increase a receivable, debit the account
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