Recording Business Transactions
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Recording Business Transactions This assignment will familiarize you with the beginning steps in the accounting cycle. After completing this assignment, you will understand: The concepts of a general journal, ledger, and chart of accounts. How to prepare journal entries from business transactions. Purposes of a trial balance. The concepts of horizontal and vertical analysis. Instructions Respond to the following questions or problems using grammatically correct language and appropriate APA citations. To achieve a proficient grade in this assignment, answer the proficient-level queries for each question. To achieve a distinguished grade, answer both sets of queries for each question. Question 1: Proficient: Describe the nature and purposes of the general journal, ledger, and chart of accounts. Distinguished: Describe the act of posting a transaction from the general journal to the ledger. What difficulties could arise if no cross-indexing existed between the general journal and the ledger accounts? Question 2: Proficient: Prepare the journal entry required for each of the following transactions. Be sure to identify which part of the entry is the debit and which is the credit. Provide five correct responses: Cash was received for services performed for customers, $1,200. Services were performed for customers on account, $4,200. Purchased machinery for cash, $30,000. Capital stock was issued for $100,000. Salaries for a period were paid to employees, $24,000. Purchased a truck using a note payable, $35,000. Distinguished: Correctly prepare all of the journal entries for the transactions. Question 3: Proficient: What are the purposes of an unadjusted trial balance? Describe the types of accounts that would appear on this type of trial balance. Distinguished: If you found that the total of the debits column of the trial balance for a company is $200,000, while the total of the credits column is $180,000, what are some possible causes of this difference? Question 4: Proficient: A student remembered that the side toward the window in the classroom was the debit side of an account. The student took an examination in a room where the windows were on the other side of the room and became confused and consistently reversed debits and credits. Would the student’s trial balance have equal debit and credit totals? If there were no existing balances in any of the accounts to begin with, would the error prevent the student from preparing correct financial statements? Why? Distinguished: Store equipment was purchased for $2,000. Instead of debiting the Store Equipment account, the debit was made to Delivery Equipment. Of what help will the trial balance be in locating this error? Question 5: Proficient: What is the difference between horizontal and vertical analysis of financial statements? How is each type calculated and presented for viewing by company stakeholders? Distinguished: How is this type of analysis used by management? Write your responses in a Microsoft Word document and submit it as an attachment in the assignment area. Before submitting your assignment, review the Recording Business Transactions Scoring Guide to ensure you have met all of the requirements and as a self-assessment of your work. Be sure to address the questions at the proficient and distinguished levels to achieve the highest grade possible. Accounting Principles: A Business Perspective, Financial Accounting Fearless copy, print, remix(tm) www.textbookequity.com www.opencollegetextbooks.org License: CC-BY-NC-SA ISBN-13: 978-1461088189 ISBN-10: 1461088186. Recording Business Transactions Scoring Guide. 1. Describe the nature and purposes of the general journal, ledger, and chart of accounts. 19%. Describes the nature and purposes of the general journal, ledger, and chart of accounts plus describes the act of posting a transaction from the general journal to the ledger and what difficulties could arise if no cross-indexing existed between the general journal and the ledger accounts. 2. Prepare the journal entry for transactions. 19%. Correctly prepares the journal entry for six transactions. 3. Describe the purposes of an unadjusted trial balance and the types of accounts that appear on this trial balance. 19%. Describes the purposes of an unadjusted trial balance and the types of accounts that appear on this trial balance plus describes some possible causes of this difference. 4. Describe the nature of debits, credits, and a trial balance in a scenario setting. 19%. Describes the nature of debits, credits, and a trial balance in a scenario setting plus explains how the trial balance can assist with error location. 5. Explain the difference between horizontal and vertical analysis and how each type is calculated and presented for viewing by company stakeholders. 19%. Explains the difference between horizontal and vertical analysis, and how each type is calculated and presented for viewing by company stakeholders plus how this type of analysis is used by management. 6. Communicate in a manner that is consistent with the standards and expectations of a business professional. 5%. Communicates professionally, with material that is well adapted to the assignment and is free of factual, grammatical, and spelling errors.
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