P2-2A Julia Dumars is a licensed CPA. During the first month of operations of her busi- ness, Julia Dumars, Inc., the following events and transactions occurred. May 1 Stockholders invested $20,000 cash in exchange for common stock. 2 Hired a secretary-receptionist at a salary of $2,000 per month. 3 Purchased $1,500 of supplies on account from Vincent Supply Company. 7 Paid office rent of $900 cash for the month. 11 Completed a tax assignment and billed client $2,800 for services performed. 12 Received $3,500 advance on a management consulting engagement. 17 Received cash of $1,200 for services performed for Orville Co. 31 Paid secretary-receptionist $2,000 salary for the month. 31 Paid 40% of balance due Vincent Supply Company. Julia uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 311 Common Stock, No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense. Instructions (a) Journalize the transactions. (b) Post to the ledger accounts. (c) Prepare a trial balance on May 31, 2017. 2. 3. 4. 5. TRUE-FALSE STATEMENTS A new account is opened for each transaction entered into by a business firm. (A) True (B) False The recording process becomes more efficient and informative if all transactions are recorded in one account. (A) True (B) False When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers. (A) True (B) False An account is often referred to as a T-account because of the way it is constructed. (A) True (B) False A debit to an account indicates an increase in that account. (A) True (B) False If a revenue account is credited, the revenue account is increased. (A) True (B) False The normal balance of all accounts is a debit. (A) True (B) False Debit and credit can be interpreted to mean increase and decrease, respectively. (A) True (B) False The double-entry system of accounting refers to the placement of a double line at the end of a column of figures. (A)True (B) False A credit balance in a liability account indicates that an error in recording has occurred. (A) True (B) False 6. 7. 8. 9. 10. P2-2A Julia Dumars is a licensed CPA. During the first month of operations of her busi- ness, Julia Dumars, Inc., the following events and transactions occurred. May 1 Stockholders invested $20,000 cash in exchange for common stock. 2 Hired a secretary-receptionist at a salary of $2,000 per month. 3 Purchased $1,500 of supplies on account from Vincent Supply Company. 7 Paid office rent of $900 cash for the month. 11 Completed a tax assignment and billed client $2,800 for services performed. 12 Received $3,500 advance on a management consulting engagement. 17 Received cash of $1,200 for services performed for Orville Co. 31 Paid secretary-receptionist $2,000 salary for the month. 31 Paid 40% of balance due Vincent Supply Company. Julia uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 311 Common Stock, No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense. Instructions (a) Journalize the transactions. (b) Post to the ledger accounts. (c) Prepare a trial balance on May 31, 2017. 2. 3. 4. 5. TRUE-FALSE STATEMENTS A new account is opened for each transaction entered into by a business firm. (A) True (B) False The recording process becomes more efficient and informative if all transactions are recorded in one account. (A) True (B) False When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers. (A) True (B) False An account is often referred to as a T-account because of the way it is constructed. (A) True (B) False A debit to an account indicates an increase in that account. (A) True (B) False If a revenue account is credited, the revenue account is increased. (A) True (B) False The normal balance of all accounts is a debit. (A) True (B) False Debit and credit can be interpreted to mean increase and decrease, respectively. (A) True (B) False The double-entry system of accounting refers to the placement of a double line at the end of a column of figures. (A)True (B) False A credit balance in a liability account indicates that an error in recording has occurred. (A) True (B) False 6. 7. 8. 9. 10