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Mune Company sample essay

Mune Company recorded journal entries for the declaration of $50,000 of dividends, the $32,000 increase in accounts receivable for services rendered, and the purchase of equipment for $21,000. What net effect do these entries have on equity? Decrease of $18,000.

Maso Company recorded journal entries for the issuance of ordinary shares for $40,000, the payment of $13,000 on accounts payable, and the payment of salaries expense of $21,000. What net effect do these entries have on equity? Increase of $19,000.

During the first year of Wilkinson Co.’s operations, all purchases were recorded as assets. Store supplies in the amount of $19,350 were purchased. Actual year-end store supplies amounted to $6,450. The adjusting entry for store supplies will: increase expenses by $12,900.

Panda Corporation paid cash of 18,000 on June 1, 2010 for one year’s rent in advance and recorded the transaction with a debit to Prepaid Rent. The December 31, 2010 adjusting entry is: debit Rent Expense and credit Prepaid Rent, 10,500.

Recording the adjusting entry for depreciation has the same effect as recording the adjusting entry for: a prepaid expense. An accrued expense can best be described as an amount: not paid and currently matched with earnings.

A document prepared to prove the equality of debits and credits after all adjustments have been prepared is the: Adjusted trial balance.

Under International Financial Reporting Standards (IFRS) the “book of original entry” is also known as the: Journal

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