Matrimonial Bliss Guaranteed (MBG) is your own business. You are a wedding planner and marriage counsellor.

You work from a rented office and drive your own car to clients, banquet halls, and so on. You use your own cell phone to speak with your clients and other facilities.

Your first month's transactions are listed below.

July 1	You set up a business bank account and acquire a business credit card. The bank will charge a fee of $16 at the end of each month.
July 2	You borrow $2,500 from the bank.
July 3	You deposit $3,000 of your own money into the business bank account.
July 4	You rent an office for the next four months for $400 per month, paying the full amount now.
July 5	You register your business name for $60 with Service Ontario, using the business credit card.
July 6	You purchase, using your business credit card, supplies for $500 plus HST.
July 7	You purchase, using your business credit card,a computer and colour printer for $1,500 from Better Buy. HST is already included.
July 8	You buy a one-year liability insurance policy for $2,400, plus 8% tax, paying cash.
July 10	You purchase for $200 cash, plus HST, 150 colour flyers to advertise your business. You haven't used any yet.
July 11	You pay a student $75 cash to distribute all your flyers.
July 12	You gave a quotation to a prospective engaged couple, to see if they liked it . You would normally have asked for a $100 deposit but you give it for free.
July 15	Two more couples hire you to plan their weddings. You will charge them each $5,000 when you provide the service in the future. They EACH pay a deposit of $1,000 cash. Weddings are expensive!
July 27	Business is wonderful! You have so far collected $20,000 in cash from happy couples who's weddings have happened already.
July 28	You now have only $250 worth of supplies left.
July 31	One month's rent on your garage has expired.
July 31	You received your cell phone bill for the month. Of the $80, three-quarters was business calls. The business will pay you next month.
July 31	One month of your insurance policy has expired.
July 31	The bank takes its monthly charge from the business bank account, plus an additional $12 for interest on the loan.
July 31	One of your July 15 customers got married today. They will pay their balance next week. The other customer's wedding is next weekend.
July 31	You pay three-fifths (i.e. 60%) of the balance owing on your business credit card. You will pay the rest next month.

How will MBG record the July 1 transaction?

a. No entry is needed.

b. decrease Cash and increase Bank Loan Payable, $16

c. Decrease cash and increase Accounts Payable, $16

d. increase both Cash and Owner's Capital, $16 -------------------------------------------------------------- How will MBG record the July 2 transaction?

a. increase both Cash and Accounts Payable, $2,500

b. increase both Cash and Bank Loan Payable, $2,500

c. increase both Cash and Owner's Capital, $2,500

d. increase both Cash and Revenue, $2,500

e. increase both Cash and Retained Earnings, $2,500 ------------------------------------------------------------- How will MBG record the July 3 transaction?

a. increase both Cash and Accounts Payable, $3,000

b. increase both Cash and Bank Loan Payable, $3,000

c. increase both Cash and Owner's Capital, $3,000

d. increase both Cash and Revenue, $3,000

e. increase both Cash and Retained Earnings, $3,000 ---------------------------------------------------------------- How will MBG record the July 4 transaction?

a. decrease Cash $1,600 and increase Rent Expense $1,600

b. decrease Cash $400 and increase Rent Expense $400

c. decrease Cash $1,600 and increase Prepaid Rent $1,600

d. decrease Cash $1,600, increase Rent Expense $1,600

e. no entry is required. ------------------------------------------------------------------- How will MBG record the July 6 transaction?

a. increase both Equipment and Accounts Payable, $565

b. increase Supplies Expense and decrease Cash, $500

c. increase Supplies and decrease Cash,$565

d. increase both Supplies Expense and Accounts Payable, $565

e. increase both Supplies and Accounts Payable, $565 ---------------------------------------------------------------------- How will MBG record the July 7 transaction?

a. increase Supplies and decrease Cash, $1,500

b. increase both Supplies Expense and Accounts Payable, $1,500

c. increase Supplies Expense and decrease Accounts Payable, $1,500

d. increase both Supplies and Accounts Payable, $1,500

e. increase both Equipment and Accounts Payable, $1,500

f. increase Equipment and decrease Cash, $1,500 ------------------------------------------------------------------------- How will MBG record the July 8 transaction?

a. increase Prepaid Insurance and decrease Cash, $2,592

b. increase both Insurance Expense and Accounts Payable, $2,592

c. increase both Prepaid Insurance and Accounts Payable, $2,592

d. increase Insurance Expense and decrease Cash, $2,592

e. increase Prepaid Insurance and decrease Cash, $2,400 ------------------------------------------------------------------------- How will MBG record the July 10 transaction?

a. increase Prepaid Advertising and decrease Cash, $226

b. increase both Prepaid Advertising and Accounts Payable, $226

c. increase Advertising Expense and decrease Cash, $226

d. increase both Prepaid Advertising and Accounts Payable, $200

e. increase Prepaid Advertising and decrease Cash, $200 ------------------------------------------------------------------------ How will MBG record the July 11 transaction?

a. increase Advertising Expense and decrease Prepaid Advertising by $226 each, and also decrease Cash and increase Wages Expense by $75 each

b. increase Advertising Expense and decrease Prepaid Advertising by $200 each, and also increase Cash and decrease Wages Expense by $75 each

c. increase Advertising Expense and decrease Prepaid Advertising by $200 each, and also decrease Cash and increase Wages Expense by $75 each

d. increase Advertising Expense and decrease Prepaid Advertising by $226 each, and also increase Cash and decrease Wages Expense by $75 each

e. decrease Advertising Expense and increase Prepaid Advertising by $301 each, and also increase Cash and decrease Wages Expense by $75 each

f. increase Advertising Expense and decrease Prepaid Advertising by $301 each, and also decrease Cash and increase Wages Expense by $75 each -------------------------------------------------------------------------- How will MBG record the July 12 transaction?

a. increase both Cash and Service Revenue, $100

b. increase both Cash and Deferred Revenue, $100

c. increase both Accounts Receivable and Service Revenue, $100

d. increase both Accounts Receivable and Deferred Revenue, $100

e. No entry is needed. -------------------------------------------------------------------------- How will MBG record the July 15 transaction?

a. increase both Cash and Service Revenue, $2,000

b. increase both Cash and Deferred Revenue, $2,000

c. increase both Cash and Service Revenue, $1,000

d. increase both Accounts Receivable and Service Revenue, $2,000

e. increase both Accounts Receivable and Deferred Revenue, $2,000

f. no entry is needed until you provide the services. -------------------------------------------------------------------------- How will MBG record the July 27 transaction?

a. increase both Accounts Receivable and Service Revenue, $20,000

b. increase both Accounts Receivable and Deferred Revenue, $20,000

c. increase both Cash and Service Revenue, $20,000

d. increase both Cash and Deferred Revenue, $20,000

e. No entry is needed. --------------------------------------------------------------------------- How will MBG record the July 28 transaction?

a. increase Supplies and decrease Supplies Expense, $315

b. increase Supplies and decrease Supplies Expense, $250

c. increase Supplies Expense and decrease Supplies, $250

d. increase Supplies Expense and decrease Supplies, $315

e. increase Supplies Expense and decrease Supplies, $565

f. increase Supplies and decrease Supplies Expense, $565 -------------------------------------------------------------------------- How will MBG record the July 31 rent expiry?

a. increase Cash and decrease Rent Expense, $400

b. increase both Accounts Payable and Rent Expense, $400

c. decrease Prepaid Rent and increase Rent Expense, $400

d. decrease Prepaid Rent and increase Rent Expense, $1,600

e. decrease Cash $400 and increase Rent Expense $400 --------------------------------------------------------------------------- How will MBG record the July 31 cell phone transaction?

a. decrease Cash $60, increase Accounts Payable $20, and increase Phone Expense $80

b. increase both Accounts Payable and Phone Expense, $60

c. decrease Cash and increase Phone Expense, $60

d. increase both Accounts Payable and Phone Expense, $20

e. decrease Cash and increase Phone Expense, $20 ---------------------------------------------------------------------------- How will MBG record the use of the insurance on July 31? (

a. decrease Prepaid Insurance $216 and increase Insurance Expense $216

b. decrease Prepaid Insurance $200 and increase Insurance Expense $200

c. decrease Prepaid Insurance $2,400 and increase Insurance Expense $2,400

d. decrease Prepaid Insurance $2,592 and increase Insurance Expense $2,592

e. no entry is required. -------------------------------------------------------------------------- How will MBG record the bank transaction on July 31?

a. decrease Cash $28, decrease Bank Loan Payable $12, increase Interest Expense $16

b. decrease Cash $28, increase Bank Fees Expense $16, increase Interest Expense $12

c. decrease Cash $28, increase Interest Expense $12, increase Bank Fees Expense $16

d. decrease Cash $28, decrease Bank Loan Payable $16, decrease Bank Fees Expense $12

e. decrease cash $28, decrease Bank Loan Payable $16, decrease Retained Earnings $12

f. decrease Cash $28, decrease Bank Loan Payable $12, decrease Retained Earnings $16 ------------------------------------------------------------------------- How will MBG record the party on July 31?

a. no entry is required until the balance is paid

b. increase both Cash and Deferred Revenue, $4,000

c. increase both Cash and Service Revenue, $4,000

d. increase both Accounts Receivable and Deferred Revenue, $4,000

e. increase both Accounts Receivable and Service Revenue, $4,000

f. Increase Accounts Receivable $4,000, increase Service Revenue $5,000, and decrease Deferred Revenue $1,000. --------------------------------------------------------------------------- How will MBG record the credit card payment on July 31?

a. decrease both Cash and Accounts Payable $1,275

b. decrease both Cash and Accounts Payable $1,320

c. decrease both Cash and Accounts Payable $2,125

d. decrease both Cash and Accounts Payable $425

e. decrease both Cash and Accounts Payable $2,185 --------------------------------------------------------------------------- What is the Total Liabilities on MBG's balance sheet for July 31?

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What would be reported on MBG's income statement as Total Service Revenue for the month of July?

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If you were producing the company's December 31 year-end financial statements, what would be the balance in MBG's Prepaid Insurance account?