Journal Entries and T Accounts - Trial Balance Example - Part 1 of 2

This video tutorial covers Part 1 of an accounting example, focusing on journal entries and T tables. It begins with an overview of the accounting cycle and setting up T tables for various accounts. The video then walks through several transactions, including issuing common stock, recording consultation revenue, employee payments, prepaid rent, accounts receivable collections, and miscellaneous expenses. Each transaction is explained with corresponding journal entries and updates to T tables. The video concludes with a preview of the next steps, which involve creating a trial balance.

What is the initial cash balance for Bravo Company at the start of the year?

• $40,000

• $10,000

• $30,000

• $20,000

Which side of the T-table does the beginning balance of common stock go on?

• Debit side

• Credit side

• Neither side

• Both sides

When Bravo Company issues common stock for cash, what is the journal entry for cash?

• Credit common stock

• Debit common stock

• Credit cash

• Debit cash

How is a consultation completed for a client but not yet paid recorded?

• Debit cash, credit revenue

• Debit cash, credit accounts receivable

• Debit accounts receivable, credit revenue

• Debit revenue, credit accounts receivable

What type of account is 'prepaid rent' considered?

• Revenue

• Equity

• Asset

• Liability

How should Bravo Company record cash received in advance for services not yet performed?

• Debit cash, credit revenue

• Debit unearned revenue, credit cash

• Debit revenue, credit cash

• Debit cash, credit unearned revenue

What principle requires recording land at the purchase price rather than its worth?

• Revenue Recognition Principle

• Cost Principle

• Matching Principle

• Full Disclosure Principle

How is a partial settlement of accounts payable recorded?

• Debit cash, credit accounts payable

• Debit cash, credit expenses

• Debit accounts payable, credit cash

• Debit expenses, credit cash

What is the correct journal entry for paying cash dividends?

• Debit cash, credit retained earnings

• Debit cash, credit dividends

• Debit dividends, credit cash

• Debit retained earnings, credit cash

When is it appropriate to make no journal entry for a transaction?

• When accounts payable is affected

• When accounts receivable is affected

• When promises are made for future actions

• When cash is involved