Question 1

A business's source documents:

Accepted Answer

A) Include the ledger. 
B) Provide objective evidence that a transaction has taken place. 
C) Must be in electronic form. 
D) Are prepared internally to ensure accuracy. 
E) Include the chart of accounts. 
A) Include the ledger. 
B) Provide objective evidence that a transaction has taken place. 
C) Must be in electronic form. 
D) Are prepared internally to ensure accuracy. 
E) Include the chart of accounts.

Question 2

A general journal is:

Accepted Answer

A) A ledger in which amounts are posted from a balance column account. 
B) Not required if T-accounts are used. 
C) A complete record of all transactions in chronological order from which transaction amounts are posted to the ledger accounts. 
D) Not necessary in electronic accounting systems. 
E) A book of final entry because financial statements are prepared from it. 
A) A ledger in which amounts are posted from a balance column account. 
B) Not required if T-accounts are used. 
C) A complete record of all transactions in chronological order from which transaction amounts are posted to the ledger accounts. 
D) Not necessary in electronic accounting systems. 
E) A book of final entry because financial statements are prepared from it.

Question 3

List the steps in processing transactions.

Accepted Answer

Business transactions and events are the

Question 4

Increases in liability accounts are recorded as debits.

Accepted Answer

A) True 
 B)False

Question 5

Given each of the following errors,indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit)will have the larger total as a result of the error.
a.$100 debit to Cash was debited to the Cash account twice.
b.$1,900 credit to Sales was posted as a $190 credit.
c.$5,000 debit to Office Equipment was debited to Office Supplies.
d.$625 debit to Prepaid Insurance was posted as a $62.50 debit.
e.$520 credit to Accounts Payable was not posted.

Accepted Answer

The answer of Given each of the following errors,indicate on...

Question 6

A balanced trial balance is proof that no errors were made in journalizing transactions,posting to the ledger,and preparing the trial balance.

Accepted Answer

A) True 
 B)False

Question 7

The dividends account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 8

Rowdy Bolton began Bolton Office Services in October and during that month completed these transactions:
a.Invested $10,000 cash,and $15,000 of computer equipment in exchange for common stock.
b.Paid $500 cash for an insurance premium covering the next 12 months.
c.Completed a word processing assignment for a customer and collected $1,000 cash.
d.Paid $200 cash for office supplies.
e.Paid $2,000 for October's rent.
Prepare journal entries to record the above transactions.Explanations are unnecessary.

Accepted Answer

The answer of Rowdy Bolton began Bolton Office Services in...

Question 9

Which of the following statements is not true:

Accepted Answer

A) Accounts receivable are held by a seller. 
B) Accounts receivable arise from credit sales. 
C) Accounts receivable are increased by customer payments. 
D) Accounts receivable are classified as assets. 
E) Accounts receivable are increased by billings to customers. 
A) Accounts receivable are held by a seller. 
B) Accounts receivable arise from credit sales. 
C) Accounts receivable are increased by customer payments. 
D) Accounts receivable are classified as assets. 
E) Accounts receivable are increased by billings to customers.

Question 10

Asset accounts are decreased by debits.

Accepted Answer

A) True 
 B)False

Question 11

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of BBB Company sends a $2,500 invoice to...

Question 12

A ________ gives a complete record of each transaction in one place,and shows debits and credits for each transaction.

Accepted Answer

The answer of A ________ gives a complete record of...

Question 13

Jaxson McCormick opened McCormick's Repairs on March 1 of the current year.During March,the following transactions occurred and were recorded in the company's books: 1.McCormick invested $25,000 cash in the business in exchange for common stock.
2.McCormick contributed $100,000 of equipment to the business.
3.The company paid $2,000 cash to rent office space for the month of March.
4.The company received $16,000 cash for repair services provided during March.
5.The company paid $6,200 for salaries for the month of March.
6.The company provided $3,000 of services to customers on account.
7.The company paid cash of $500 for utilities for the month of March.
8.The company received $3,100 cash in advance from a customer for repair services to be provided in April.
9.The company paid Jackson $5,000 cash as a dividend.
Based on this information,net income for March would be:

Accepted Answer

A) $10,300. 
B) $13,400. 
C) $5,300. 
D) $8,400. 
E) $13,500. 
A) $10,300. 
B) $13,400. 
C) $5,300. 
D) $8,400. 
E) $13,500.

Question 14

Source documents identify and describe transactions and events entering the accounting process.

Accepted Answer

A) True 
 B)False

Question 15

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 16

On October 27,Able Graphics received a $400 utility bill for the current month's electricity.It is not due until the end of the next month which is when the bill will be paid.Which of the following general journal entries will Able Graphics make on October 27 to record this transaction?

Accepted Answer

A)  $\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Cash } & & 400 \
\hline
\end{array}$ 
B)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 400 & \
\hline \text { Utilities Expense } & & 400 \
\hline
\end{array}$ 
C)  $\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Accounts Payable } & & 400 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Accounts Payable } & 400 & \
\hline \text { Utilities Expense } & & 400 \
\hline
\end{array}$ 
E)  $\begin{array}{|l|l|l|}
\hline \text { No joumal entry is required } & \quad&\quad\
\hline& \quad&\quad\\hline
\end{array}$ 
A)  $\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Cash } & & 400 \
\hline
\end{array}$ 
B)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 400 & \
\hline \text { Utilities Expense } & & 400 \
\hline
\end{array}$ 
C)  $\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Accounts Payable } & & 400 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Accounts Payable } & 400 & \
\hline \text { Utilities Expense } & & 400 \
\hline
\end{array}$ 
E)  $\begin{array}{|l|l|l|}
\hline \text { No joumal entry is required } & \quad&\quad\
\hline& \quad&\quad\\hline
\end{array}$

Question 17

Identify the statement that is incorrect.

Accepted Answer

A) Higher financial leverage involves higher risk. 
B) Risk is higher if a company has more liabilities. 
C) Risk is higher if a company has higher assets. 
D) The debt ratio is one measure of financial risk. 
E) Lower financial leverage involves lower risk. 
A) Higher financial leverage involves higher risk. 
B) Risk is higher if a company has more liabilities. 
C) Risk is higher if a company has higher assets. 
D) The debt ratio is one measure of financial risk. 
E) Lower financial leverage involves lower risk.

Question 18

A more structured format that is similar to a T-account in that it has columns for debits and credits,but that is different in that it has columns for transaction date,explanation,and the account balance is the ________.

Accepted Answer

balance co

Question 19

Major Lodging had the following accounts and balances as of December 31:   Using the information in the table,calculate the total assets reported on Major's balance sheet for the period.

Accepted Answer

A) $ 24,900. 
B) $ 25,400. 
C) $ 22,500. 
D) $ 25,900. 
E) $ 23,400. 
A) $ 24,900. 
B) $ 25,400. 
C) $ 22,500. 
D) $ 25,900. 
E) $ 23,400.

Question 20

The numbering system used in a company's chart of accounts:

Accepted Answer

A) Is the same for all companies. 
B) Is determined by generally accepted accounting principles. 
C) Depends on the source documents used in the accounting process. 
D) Typically begins with balance sheet accounts. 
E) Typically begins with income statement accounts. 
A) Is the same for all companies. 
B) Is determined by generally accepted accounting principles. 
C) Depends on the source documents used in the accounting process. 
D) Typically begins with balance sheet accounts. 
E) Typically begins with income statement accounts.

A business's source documents:

A general journal is:

List the steps in processing transactions.

Increases in liability accounts are recorded as debits.

A balanced trial balance is proof that no errors were made in journalizing transactions,posting to the ledger,and preparing the trial balance.

The dividends account normally has a debit balance.

Which of the following statements is not true:

Asset accounts are decreased by debits.

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

A ________ gives a complete record of each transaction in one place,and shows debits and credits for each transaction.

Source documents identify and describe transactions and events entering the accounting process.

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:

On October 27,Able Graphics received a $400 utility bill for the current month's electricity.It is not due until the end of the next month which is when the bill will be paid.Which of the following general journal entries will Able Graphics make on October 27 to record this transaction?

Identify the statement that is incorrect.

A more structured format that is similar to a T-account in that it has columns for debits and credits,but that is different in that it has columns for transaction date,explanation,and the account balance is the ________.

Major Lodging had the following accounts and balances as of December 31: Using the information in the table,calculate the total assets reported on Major's balance sheet for the period.

The numbering system used in a company's chart of accounts:

Introducing Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 2: Financial Statements and the Accounting System

A business's source documents:

A general journal is:

List the steps in processing transactions.

Increases in liability accounts are recorded as debits.

A balanced trial balance is proof that no errors were made in journalizing transactions,posting to the ledger,and preparing the trial balance.

The dividends account normally has a debit balance.

Which of the following statements is not true:

Asset accounts are decreased by debits.

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

A ________ gives a complete record of each transaction in one place,and shows debits and credits for each transaction.

Source documents identify and describe transactions and events entering the accounting process.

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:

On October 27,Able Graphics received a $400 utility bill for the current month's electricity.It is not due until the end of the next month which is when the bill will be paid.Which of the following general journal entries will Able Graphics make on October 27 to record this transaction?

Identify the statement that is incorrect.

A more structured format that is similar to a T-account in that it has columns for debits and credits,but that is different in that it has columns for transaction date,explanation,and the account balance is the ________.

Major Lodging had the following accounts and balances as of December 31: Using the information in the table,calculate the total assets reported on Major's balance sheet for the period.

The numbering system used in a company's chart of accounts:

Introducing Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters