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Test your accounting
skills.
1. State the basic accounting equation.
2. Indicate the type (Asset, Liability, Equity, Revenue, Expense) and normal
balance (debit or credit) for the following:
- Cash
- Sales
- Common stock
- Accrued expense
- Office supplies
3. Define the following terms:
- Prepaid expense
- Accrued expense
4. Explain the difference between cash and accrual basis of accounting
5. Prepare KES Accounting Services, Inc.’s journal entries for November
2000. KES Accounting Services, Inc. maintains their general ledger on the accrual
basis.
- On November 1, 2000, Mark & Mary form KES Accounting Services, Inc.
by each investing $5,000. Each will receive 500 shares of KES common stock
$1.00 per value.
- On November 10, 2000, billed ABC Corporation $2,000 for the annual audit
completed November 5, 2000.
- On November 13, 2000, KES Accounting Services, Inc. purchased 8 calculators
at $25 each on credit from XYZ Corporation.
- On November 14, 2000, KES Accounting Services, Inc. purchased a Dell computer
for $1,000. KES’s capitalization policy for fixed assets is $500.
- On November 15, 2000, received $2,000 payment for ABC Corporation for audit
billing of November 1, 2000.
- On November 20, 2000, paid XYZ Corporation for 8 calculators purchased
November 13, 2000.
- On November 30, 2000, accrued KES Accounting Services, Inc. weekly payroll
of $500.00 to be paid December 7, 2000.
6. Using T-accounts, post the journal entries generated from question
7. Prepare KES Accounting Services, Inc. balance sheet and income statement
as of November 30, 2000.
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