Acct 11
Chapter 6 Review
1. Tracey Sullivan begins business on May 1, 2005, with the following assets and liabilities:
Cash, $5 000;
Accounts Receivable from Atkinson & Sons, $500
Land, $40 000
Building, $100 000
Office Equipment, $6 800
A/P - Statton Builders, $2 000
Mortgage on Building, $50 000
Record the opening entry for Tracey Sullivan in the two-column general journal.
GENERAL JOURNAL
DATE
PARTICULARS
PAGE _____
P.R.
DEBIT
2. Indicate whether the following statements are true or false.
a)
b)
c)
All accounting entries are based on source documents.
The ledger is often called the book of original entry. – the journal
When a company issues a sales invoice to a customer, this invoice becomes a
purchase invoice in the customer’s books.
d)
At least three accounts are affected by a compound journal entry.
e)
For all bank debit memos received, the accounting entry will be a debit to Bank.
The entry will be a credit to Bank.
f)
A ruled book in which accounting entries are recorded in the order in which they
occur is called a journal.
g)
When recording a journal entry, the credit amounts are recorded first. - debits
CREDIT
h)
A bank debit memo, initiated by the bank, will increase the Bank account - decrease
i)
A computerized sales register for cash sales is called a point of sale (POS) terminal
j)
A cash receipt is a business form representing a purchase of goods on account.
purchase invoice
3.
Analyze the following summary. Ignore GST and PST and complete the chart.
Required Accounting Entry
Nature of Transaction
Source Document
Account Debited
Account Credited
1. Cash payment on hydro bill
that arrived today
2. Cash sale
3. Bank interest earned
4. Sale on account
5. Purchased advertising on
account
4. Dean Hemiston paid $585.36, including 8 per cent sales tax, for some equipment.
a) Calculate the price of the supplies before the sales tax was added. Show your work.
b) Calculate the sales tax on the goods. Show your work.
5. Answer the questions below about this source document:
In account with:
McTavish, Brow & Devry
Barristers, Solicitors and Notaries
235 The Donway East
Suite 406
Don Mills, Ont.
M3B 2Y8
To: Ingersoll Holdings Inc.
41 Swanwick Avenue
Toronto, Ontario
M4E 1Z4
Date: June 25, 20—
Terms: net 30 days
Professional services rendered with respect to certification of title of first
mortgagee, preparation and execution of mortgage, search of title, registration of
documents, telephone calls, correspondence, interviews and report.
Total:
$802.00
a) What type of source document is this?
b) What is the purpose of the source document?
c) Who issued it?
d) Give the accounting entry the sender of the source document would make.
General Journal
Date
Particulars
P.R.
Debit
Credit
e) Give the accounting entry the receiver of the source document would make.
General Journal
Date
Particulars
P.R.
Debit
Amount of
Remittance
Refund
Claimed
Credit
6. Complete the following schedule of GST data.
End of
Period
GST
Recoverable
GST
Payable
Oct. 31
1 025.96
988.36
May 31
5 514.23
9 633.54
Nov. 30
215.63
664.25
Due Date
7. Jack Whitcombe and Sons is a consultant engineering firm. The accounts for the firm are as
follows:
Bank
A/P—various
Fees Earned
A/R—various
GST Recoverable
Bank Charges
Supplies
GST Payable
Car Expense
Office
Office Expense
Equipment
PST Payable
Automobile
J. Whitcombe, Capital Rent Expense
J. Whitcombe,
Drawings
Wages
Expense
a. Journalize the transactions shown below in the two-column general journal that follows.
Provide explanations for each entry. The next page number of the journal is 16.
b. Calculate and add the GST and PST on all sales transactions. The rate for GST is 7 %, and PST
is 8 %. The amount of GST on purchases is given to you; ignore PST on purchases.
Oct. 2 Cash Sales Slip
No. 102 to S. Stewart, $102.50 plus taxes.
6 Sales Invoice
No. 617 to Jack Morrison, $250.90 plus taxes.
10 Cheque Copy
No. 910 to Industrial Suppliers, $500 on account.
12 Cash Receipt
From Jack Mahoney, $322.50 on account.
18 Purchase Invoice
From Grand’s Stationers, $60.50 for office supplies plus GST of 54.24, total $64.74.
20 Cheque Copy
No. 911 to Jack Whitcombe, $525 for personal use.
24 Bank Debit Memo
$31.90 for bank service charge.
30 Cheque Copy
No. 912 to W. Moss, $900 for wages.
31 Cash Sales Slip
No. 103 to J. Beck, $450 plus taxes.
31 Cheque Copy
The balances in the GST accounts for the previous period were: GST Recoverable $770
and GST Payable $1 820. Cheque 913 was written to the Receiver General for $1 050 to
clear the accounts for that period.
General Journal
Date
Particulars
P.R.
Debit
Credit