Question 1

Larry Matt completed these transactions during December of the current year:   Prepare general journal entries to record these transactions.

Accepted Answer

The answer of Larry Matt completed these transactions during December...

Question 2

All of the following statements regarding a sales invoice are true except:

Accepted Answer

A) A sales invoice is a type of source document. 
B) A sales invoice is used by sellers to record the sale and for control. 
C) A sales invoice is used by buyers to record purchases and monitor purchasing activity. 
D) A sales invoice gives rise to an entry in the accounting process. 
E) A sales invoice does not provide objective evidence about a transaction. 
A) A sales invoice is a type of source document. 
B) A sales invoice is used by sellers to record the sale and for control. 
C) A sales invoice is used by buyers to record purchases and monitor purchasing activity. 
D) A sales invoice gives rise to an entry in the accounting process. 
E) A sales invoice does not provide objective evidence about a transaction.

Question 3

Smiles Entertainment had the following accounts and balances at December 31:   Using the information in the table,calculate the company's reported net income for the period.

Accepted Answer

A) $1,100. 
B) $4,000. 
C) $4,500. 
D) $10,400. 
E) $5,500. 
A) $1,100. 
B) $4,000. 
C) $4,500. 
D) $10,400. 
E) $5,500.

Question 4

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

Accepted Answer

A) True 
 B)False

Question 5

An account's balance is the difference between the total debits and total credits for the account,including any beginning balance.

Accepted Answer

A) True 
 B)False

Question 6

Neither U.S.GAAP nor IFRS require the use of accrual basis accounting.

Accepted Answer

A) True 
 B)False

Question 7

The balance sheet reports the financial position of a company at a point in time.

Accepted Answer

A) True 
 B)False

Question 8

If a company purchases equipment paying cash,the journal entry to record this transaction will include a debit to Cash.

Accepted Answer

A) True 
 B)False

Question 9

On April 30,Victor Services had an Accounts Receivable balance of $18,000.During the month of May,total credits to Accounts Receivable were $52,000 from customer payments.The May 31 Accounts Receivable balance was $13,000.What was the amount of credit sales during May?

Accepted Answer

A) $5,000. 
B) $47,000. 
C) $52,000. 
D) $57,000. 
E) $32,000. 
A) $5,000. 
B) $47,000. 
C) $52,000. 
D) $57,000. 
E) $32,000.

Question 10

At year-end,a trial balance showed total credits exceed total debits by $4,950.This difference could have been caused by:

Accepted Answer

A) An error in the general journal where a $4,950 increase in Accounts Receivable was recorded as an increase in Cash. 
B) A net income of $4,950. 
C) The balance of $49,500 in Accounts Payable being entered in the trial balance as $4,950. 
D) The balance of $5,500 in the Office Equipment account being entered on the trial balance as a debit of $550. 
E) An error in the general journal where a $4,950 increase in Accounts Payable was recorded as a decrease in Accounts Payable. 
A) An error in the general journal where a $4,950 increase in Accounts Receivable was recorded as an increase in Cash. 
B) A net income of $4,950. 
C) The balance of $49,500 in Accounts Payable being entered in the trial balance as $4,950. 
D) The balance of $5,500 in the Office Equipment account being entered on the trial balance as a debit of $550. 
E) An error in the general journal where a $4,950 increase in Accounts Payable was recorded as a decrease in Accounts Payable.

Question 11

Miley Block is a building consultant.Shown below are (a)several accounts in her ledger with each account preceded by an identification number,and (b)several transactions completed by Block.Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.

Accepted Answer

The answer of Miley Block is a building consultant.Shown below...

Question 12

At the end of the current year,Leer Company reported total liabilities of $300,000 and total equity of $100,000.The company's debt ratio on the last year-end was:

Accepted Answer

A) 300%. 
B) 33.3%. 
C) 75.0%. 
D) 66.67%. 
E) $400,000. 
A) 300%. 
B) 33.3%. 
C) 75.0%. 
D) 66.67%. 
E) $400,000.

Question 13

For each of the following (1)identify the type of account as an asset,liability,equity,revenue,or expense,and (2)identify the normal balance of the account.

Accepted Answer

The answer of For each of the following (1)identify the...

Question 14

Larry Bar opened an frame shop and completed these transactions: 1.Larry started the shop by investing $40,000 cash and equipment valued at $18,000.
2)Purchased $70 of office supplies on credit.
3)Paid $1,200 cash for the receptionist's salary.
4)Sold a custom frame service and collected a $1,500 cash on the sale.
5)Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

Accepted Answer

A) $300. 
B) $41,500. 
C) $40,300. 
D) $38,500. 
E) $38,700. 
A) $300. 
B) $41,500. 
C) $40,300. 
D) $38,500. 
E) $38,700.

Question 15

You increase the Service Revenue account on the ___________ side of its account.

Accepted Answer

The answer of You increase the Service Revenue account on...

Question 16

Identify the statement below that is correct.

Accepted Answer

A) When a future expense is paid in advance,the payment is normally recorded in a liability account called Prepaid Expense. 
B) Promises of future payment by the customer are called accounts receivable. 
C) Increases and decreases in cash are always recorded in the owner's capital account. 
D) An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. 
E) Accrued liabilities include accounts receivable. 
A) When a future expense is paid in advance,the payment is normally recorded in a liability account called Prepaid Expense. 
B) Promises of future payment by the customer are called accounts receivable. 
C) Increases and decreases in cash are always recorded in the owner's capital account. 
D) An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. 
E) Accrued liabilities include accounts receivable.

Question 17

The same four basic financial statements are prepared by both U.S.GAAP and IFRS.

Accepted Answer

A) True 
 B)False

Question 18

Identify the statement below that is correct?

Accepted Answer

A) The left side of a T-account is the credit side. 
B) Debits decrease asset and expense accounts,and increase liability,equity,and revenue accounts. 
C) The left side of a T-account is the debit side. 
D) Credits increase asset and expense accounts,and decrease liability,equity,and revenue accounts. 
E) In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction. 
A) The left side of a T-account is the credit side. 
B) Debits decrease asset and expense accounts,and increase liability,equity,and revenue accounts. 
C) The left side of a T-account is the debit side. 
D) Credits increase asset and expense accounts,and decrease liability,equity,and revenue accounts. 
E) In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction.

Question 19

J.Brown Consulting paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that J.Brown Consulting will make to record this transaction.

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 20

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing and Recording Transactions

Larry Matt completed these transactions during December of the current year: Prepare general journal entries to record these transactions.

All of the following statements regarding a sales invoice are true except:

Smiles Entertainment had the following accounts and balances at December 31: Using the information in the table,calculate the company's reported net income for the period.

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

An account's balance is the difference between the total debits and total credits for the account,including any beginning balance.

Neither U.S.GAAP nor IFRS require the use of accrual basis accounting.

The balance sheet reports the financial position of a company at a point in time.

If a company purchases equipment paying cash,the journal entry to record this transaction will include a debit to Cash.

On April 30,Victor Services had an Accounts Receivable balance of $18,000.During the month of May,total credits to Accounts Receivable were $52,000 from customer payments.The May 31 Accounts Receivable balance was $13,000.What was the amount of credit sales during May?

At year-end,a trial balance showed total credits exceed total debits by $4,950.This difference could have been caused by:

At the end of the current year,Leer Company reported total liabilities of $300,000 and total equity of $100,000.The company's debt ratio on the last year-end was:

For each of the following (1)identify the type of account as an asset,liability,equity,revenue,or expense,and (2)identify the normal balance of the account.

You increase the Service Revenue account on the ___________ side of its account.

Identify the statement below that is correct.

The same four basic financial statements are prepared by both U.S.GAAP and IFRS.

Identify the statement below that is correct?

J.Brown Consulting paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that J.Brown Consulting will make to record this transaction.

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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