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Flashcards in Journal Entries Deck (26)
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1

Establish allowance for doubtful accounts and write-off account.

Establish:
Dr. Bad debt expense
Cr. Allowance for doubtful accounts

Write off:
Dr. Allowance for doubtful accounts
Cr. Accounts receivable

2

Sell an asset for a loss and sell an asset for a gain.

Loss:
Dr. Accumulated depreciation
Dr. Loss
Dr. Cash
Cr. Equipment (at book value)
Gain:
Dr. Accumulated depreciation
Dr. Cash
Cr. Equipment (at book value)
Cr. Gain

3

Cash dividend declared and paid.

Declared:
Dr. Dividends
Cr. Dividends payable
Paid:
Dr. Dividends payable
Cr. Cash

4

Closing revenue, expense, and dividend entries.

Close revenue:
Dr. Revenue
Cr. Income summary
Close expense accounts:
Dr. Income summary
Cr. Each expense account
Close income summary to retained earnings:
Dr. Income summary
Cr. Retained earnings
Close dividends:
Dr. Retained earnings
Cr. Dividends

5

Collect on accounts receivable.

Collect on A/R:
Dr. Cash
Cr. Accounts receivable

6

Purchase asset with cash and note payable.

To record purchase:
Dr: Land/Equipment
Cr. Cash
Cr. Note payable

7

Record annual depreciation expense.

Record annual depreciation expense:
Dr. Depreciation expense
Cr. Accumulated depreciation.

8

Record receipt of dividend income.

Receive dividend income:
Dr. Cash
Cr. Dividend income

9

Record accrued expense.

Record accrued expense:
Dr. Expense
Cr. Payable

10

Purchase and yearly adjustment of available for sale securities.

Purchase:
Dr. Available for sale securities
Cr. Cash
Record loss at year end:
Dr. Unrealized loss - OCI
Cr. Available for sale securities
Record gain at year end:
Dr: Available for sale securities
Cr. Unrealized gain - OCI

11

Investment in bonds at a discount, interest received, and redemption of bonds.
(Assume: five $1000, 5%, 3-year bonds at 97, semi-annual interest, straight-line)

Investment:
Dr: Investment in bonds 4,850
Cr: Cash 4,850
Interest received:
Dr: Cash 125
Dr: Investment in bonds 25
Cr: Interest income 150
(5,000 x .05 x 6/12 months)
($150 x 6 months / 36 months)
Redemption:
Dr: Cash 5,000
Cr: Investment in bonds 5,000

12

Investment in bonds at a premium, interest received, and redemption of bonds.
(Assume: five $1000, 5%, 3-year bonds at 106, semi-annual interest, straight-line)

Investment:
Dr: Investment in bonds 5,300
Cr: Cash 5,300
Interest received:
Dr: Cash 125
Cr: Investment in bonds 50
Cr: Interest income 75
($5,000 x .05 x 6/12 months)
($300 x 6 months / 36 months)
Redemption
Dr: Cash 5000
Cr: Investment in bonds 5,000

13

Equity method investment purchase, net income, and dividends (Assume 25% stake, $10,000 net income and $1,000 in dividends)

Initial investment:
Dr: Investment in investee
Cr: Cash
Year-end share of net income
Dr: Investment in investee 2,500
Cr: Investment income 2,500
Share of dividends:
Dr: Cash 1,000
Cr: Investment in investee 1,000

14

Investment in trading securities and year-end adjustments

Initial purchase:
Dr: Trading securities
Cr: Cash
Year-end loss:
Dr: Unrealized loss on investment (to net income)
Cr: Trading securities
Year-end gain:
Dr: Trading securities
Cr: Unrealized gain on investments (to net income)

15

Issue par value stock
(3,000 shares, $1 par, at $5 per share)

Issue:
Dr: Cash 15,000,000
Cr: Common stock 3,000,000
Cr: Additional paid-in capital 12,000,000

16

To record purchase of direct materials and job costing, including direct labor and overhead.

To record purchase:
Dr: Raw materials inventory
Cr: Accounts payable
To transfer raw materials to productions:
Dr: WIP inventory
Cr: Raw materials inventory
Cr: Salaries payable
Cr: Overhead
To transfer completed units to inventory:
Dr: Finished goods inventory
Cr: WIP inventory

17

To record loan payable, interest accrual, and repayment.
(Assume $100,000 at 6% per year, principal and interest due end of year 2)

To record receipt:
Dr: Cash 100,000
Cr: Loan payable 100,000
To record accrued interest:
Dr: Interest expense 3,000
Cr: Interest payable 3,000
To record repayment:
Dr: Interest expense 6,000
Dr: Interest payable 3,000
Cr: Cash 109,000

18

To pay accounts payable

To pay accounts payable:
Dr: Accounts payable
Cr: Cash

19

To record payroll

To record payroll:
Dr: Salaries Expense
Cr: Federal income tax payable
Cr: State income tax payable
Cr: Social security payable
Cr: Medicare payable
Cr: Cash
To record employer portion:
Dr: Payroll tax expense
Cr: Social Security payable
Cr: Medicare payable
Cr: FUTA payable
Cr: SUTA payable

20

Record purchase and sale of inventory in perpetual environment.

Record purchase:
Dr: Inventory
Cr: Accounts payable
Record sale:
Dr: Accounts Receivable
Dr: Cost of goods sold
Cr: Inventory
Cr: Sales

21

To record purchases and purchase returns

To record purchased inventory on account:
Dr: Purchases
Cr: Accounts payable
To record return of defective inventory to vendor:
Dr: Accounts payable
Cr: Purchase returns & allowances

22

To record prepaids

To record prepayment (example rent):
Dr: Prepaid rent
Cr: Cash
To record adjustment (example rent):
Dr: Rent expense
Cr: Prepaid rent

23

To account for warranties

To record sale:
Dr: Cash
Cr: Sales
To record expense accrual:
Dr: Warranty expense
Cr: Warranty liability
To record warranty repair:
Dr: Warranty liability
Cr: Cash

24

Unearned revenue and adjustments

To record unearned revenue:
Dr: Cash
Cr: Unearned revenue
To reflect earned revenue:
Dr: Unearned revenue
Cr: Revenue

25

To record large stock dividend issuance (50% stock dividend)
(1,000,000 assumed shares outstanding x 50% x $1 par)

Record issuance:
Dr: Retained earnings 500,000
Cr: Common stock 500,000

26

To record small stock dividend (5% stock dividend, 2,300,000 x 5% x $5 per share market price, $1 par value)

Record issuance:
Dr: Retained earnings 575,000
Cr: Common stock 115,000
Cr: Paid in capital in excess of par 460,000