Problem 3-8 - Matching a. accounting cycle 1. account balance d. general ledger d. general journal e. accrual basis of accounting f. double-entry accounting g. retained earnings h. account i. credit j. debit k, source document 1. posting m. trial balance n. cash basis of accounting Instructions: Match the terms above with the descriptions below. Each term should be used only once. company's accounting system. . The first place where transaction is recorded with debits and credits in a company's accounting system. 2. A component of an accounting system that includes a separate record for 3. The process of transferring information from the general journal to individual accounts in the general ledger. 4. The sequence of steps or procedures used to record, classify, and summarize accounting information. 5. The method of accounting where revenue is recorded in the period in which it is earned (when goods are services are received by customers) and expenses are recorded in the period in which they are incurred. This method is required by GAAP. 6. A record used to summarize all increases and decreases in a particular asset, such as Cash, or any other type of asset, liability, owner's equity, revenue, or expense. 7. The difference between the total debits and the total credits of a ledger 8. The documents upon which evidence of an accounting transaction are initially recorded. 9. A two column schedule listing the names and balances of all the accounts in the order in which they appear in the ledger. 10. The method of accounting where revenues and expenses are recorded in the time period when cash is received or paid. 11. An amount entered on the right-hand side of a ledger account. 12. An amount entered on the left-hand side of a ledger account. 13. A systematic method of accounting by which every transaction affects at least two accounts. 14. That portion of stockholders' equity resulting from net income earned in the business less any dividends paid to stockholders. Problem 3-9 - Revenue Recognition Santos Security Company carried out the following 5 transactions during the month of April 205. For each transaction state whether the transaction represented revenue to the company during the month of April 205. Give reasons for your decision. a. The company sold an additional 20,000 shares of capital stock and received $40,000 cash. b. The company borrowed $10,000 from Mays Landing Bank and signed a 6-month note payable at 8% interest. c. The company received an advance payment of $400 for security services to be provided in May 205. d. Collected $1,200 cash from a customer accounts receivable. This receivable originated from security services provided in February 205. e. Provided security services in the current month (April 20x5) for $2,200. The fee for these services is billed to the customer this month but will not be collected until May 205 Problem 3-10 - Expense Recognition David's Computer Repair Company carried out the following 5 transactions during the month of September 205. For each transaction state whether the transaction represented an expense to the company during the month of September. Give reasons for your decision. a. Paid $240 for fuel used in September for the company's truck which is only used for service calls. b. Purchased equipment for $1,600. c. Paid $1,500 salary to an employee for time worked during September. d. Declared and paid a $500 dividend to stockholders. e. Paid an accountant $800 for services rendered in June 205
