Question 1

Which of the following statements about the debit/credit framework is correct?

Accepted Answer

A)  Stockholders' Equity = Assets + Liabilities. 
B)  The total value of credits in all accounts must always equal the total value of debits in all accounts. 
C)  The normal balance for an account is the side on which it decreases. 
D)  A decrease in Common Stock would be recorded with a credit. 
A)  Stockholders' Equity = Assets + Liabilities. 
B)  The total value of credits in all accounts must always equal the total value of debits in all accounts. 
C)  The normal balance for an account is the side on which it decreases. 
D)  A decrease in Common Stock would be recorded with a credit.

Question 2

-Use the information above to answer the following question.What is the amount of current liabilities on the classified balance sheet?

Accepted Answer

A)  $9,450. 
B)  $6,950. 
C)  $113,540. 
D)  $4,500. 
A)  $9,450. 
B)  $6,950. 
C)  $113,540. 
D)  $4,500.

Question 3

A current asset is one that the company:

Accepted Answer

A)  has owned for over one year. 
B)  has owned for over five years. 
C)  will use up or converted into cash in less than 12 months. 
D)  has updated to reflect its current value. 
A)  has owned for over one year. 
B)  has owned for over five years. 
C)  will use up or converted into cash in less than 12 months. 
D)  has updated to reflect its current value.

Question 4

A company receives $100,000 cash from investors in exchange for stock.Several weeks later,the company buys a $250,000 machine using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

Accepted Answer

A)  Cash; Equipment; Noncurrent Investments; and Accounts Payable. 
B)  Cash; Noncurrent Investments; Common Stock; and Notes Payable. 
C)  Cash; Equipment; Common Stock; and Notes Payable. 
D)  Equipment; Notes Payable; and Retained Earnings. 
A)  Cash; Equipment; Noncurrent Investments; and Accounts Payable. 
B)  Cash; Noncurrent Investments; Common Stock; and Notes Payable. 
C)  Cash; Equipment; Common Stock; and Notes Payable. 
D)  Equipment; Notes Payable; and Retained Earnings.

Question 5

Assets totaled $24,250 and liabilities totaled $8,500 at the beginning of the year.During the year, assets decreased by $3,500 and liabilities increased by $2,800.
-Use the information above to answer the following question.What is the amount of stockholders' equity at the end of the year?

Accepted Answer

A)  $9,450. 
B)  $15,750. 
C)  $15,050. 
D)  $14,450. 
A)  $9,450. 
B)  $15,750. 
C)  $15,050. 
D)  $14,450.

Question 6

Match the term with its definition.(There are more definitions than terms.)
TERM
_____ (1)Duality Of Effects
_____ (2)Journal Entry
_____ (3)Posting
_____ (4)Debit
_____ (5)Chart Of Accounts
_____ (6)T-Account
_____ (7)Credit
_____ (8)Cost Principle
DEFINTION
A.A journal entry that lowers the balance of the account.
B.When journal entries are recorded in the appropriate T-account.
C.The concept that a company must keep separate accounts by time period.
D.A simplified version of an account in the General Ledger.
E.The mechanism used to record each transaction in the General Journal.
F.When a company's balance sheet has been verified by an outside auditor.
G.The concept that any transaction must have at least two effects on the accounting equation.
H.When a dollar value is assigned to an item recorded in the accounting system.
I.Compares balance sheet items from two different time periods.
J.An amount that is posted on the left side of a T-account or ledger.
K.The principle that a company should use the least optimistic measure,when uncertainty exists.
L.Assets are initially recorded at the amount paid to acquire them.
M.A journal entry that raises the balance of the account.
N.A balance sheet where assets appear on the top,liabilities in the middle and stockholders' equity appears on the bottom.
O.An amount that is posted on the right side of a T-account.
P.A summary of account names and numbers.

Accepted Answer

(1)G,(2)E,

Question 7

What will be the effect on the balance sheet of issuing shares of common stock in exchange for cash?

Accepted Answer

A)  An increase in Retained Earnings 
B)  A decrease in Common Stock 
C)  A decrease in Retained Earnings 
D)  An increase in Common Stock 
A)  An increase in Retained Earnings 
B)  A decrease in Common Stock 
C)  A decrease in Retained Earnings 
D)  An increase in Common Stock

Question 8

-Use the information above to answer the following question.What is the amount of the current ratio (round to two decimal places)?

Accepted Answer

A)  8.05 
B)  6.44 
C)  5.22 
D)  1.00 
A)  8.05 
B)  6.44 
C)  5.22 
D)  1.00

Question 9

What is the effect on the balance sheet if a company purchases $100 of supplies using cash?

Accepted Answer

A)  Total assets will remain the same. 
B)  Total assets will decrease. 
C)  Liabilities will decrease. 
D)  Total assets will increase. 
A)  Total assets will remain the same. 
B)  Total assets will decrease. 
C)  Liabilities will decrease. 
D)  Total assets will increase.

Question 10

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Accepted Answer

A) True 
 B)False

Question 11

The current ratio:

Accepted Answer

A)  is a measure of a firm's ability to pay its current liabilities. 
B)  equals current liabilities divided by current assets 
C)  equals total assets divided by total liabilities 
D)  is a measure of profitability 
A)  is a measure of a firm's ability to pay its current liabilities. 
B)  equals current liabilities divided by current assets 
C)  equals total assets divided by total liabilities 
D)  is a measure of profitability

Question 12

Every transaction increases at least one account and decreases at least one account.

Accepted Answer

A) True 
 B)False

Question 13

Daisy Company's trial balance was in balance at the end of the period and showed the following accounts:
 
What is the balance of the credit column on Daisy Company's trial balance?

Accepted Answer

A)  $160,800. 
B)  $80,400. 
C)  $60,400. 
D)  $60,000. 
A)  $160,800. 
B)  $80,400. 
C)  $60,400. 
D)  $60,000.

Question 14

A company signed an agreement to rent store space from another company.This is an example of a transaction that should be recorded.

Accepted Answer

A) True 
 B)False

Question 15

The Noble Corp.installs $15,000 of equipment,paying $5,000 cash and promising to pay the remaining $10,000 in 6 months.What is the impact to this transaction on the accounting equation?

Accepted Answer

A)  Total assets are increased by $10,000. 
B)  Current assets are increased by $10,000. 
C)  Total assets are increased by $15,000. 
D)  Current assets are increased by $15,000. 
A)  Total assets are increased by $10,000. 
B)  Current assets are increased by $10,000. 
C)  Total assets are increased by $15,000. 
D)  Current assets are increased by $15,000.

Question 16

Partial list of account balances at the end of the year:
  
-Use the information above to answer the following question.The amount of total current assets that will be reported on the company's balance sheet at the end of the year is:

Accepted Answer

A)  $362,600. 
B)  $368,500. 
C)  $139,500. 
D)  $327,000. 
A)  $362,600. 
B)  $368,500. 
C)  $139,500. 
D)  $327,000.

Question 17

The following is a list of account balances for Pick-A-Pet,Inc.,as of June 30,Year 3:
   
The company entered into the following transactions during July Year 3.Stockholders contribute $300,000 cash for additional ownership shares and the company pays $550,000 in cash and borrows $150,000 from a bank to buy new equipment.No other transactions took place during July,Year 3.
Required:
Part a.Prepare a classified balance sheet for the company at June 30,Year 3.
Part b.Show the effects of the July transactions on the basic accounting equation.
Part c.Prepare the journal entries that would be used to record the transactions.

Accepted Answer

Part a
 @#IMG-DLM&

Question 18

If a company uses $100 million of its cash to pay off debt,its stockholders' equity will increase $100 million.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following sequences indicates the correct order of steps in the accounting cycle?

Accepted Answer

A)  Post to T-accounts, prepare journal entries, prepare trial balance, and prepare financial statements. 
B)  Post to T-accounts, prepare journal entries, prepare financial statements, and prepare trial balance. 
C)  Prepare Journal entries, post to T-accounts, prepare trial balance, and prepare financial statements. 
D)  Prepare Journal entries, post to T-accounts, prepare financial statements, and prepare trial balance. 
A)  Post to T-accounts, prepare journal entries, prepare trial balance, and prepare financial statements. 
B)  Post to T-accounts, prepare journal entries, prepare financial statements, and prepare trial balance. 
C)  Prepare Journal entries, post to T-accounts, prepare trial balance, and prepare financial statements. 
D)  Prepare Journal entries, post to T-accounts, prepare financial statements, and prepare trial balance.

Question 20

Which of the following would be listed as a current liability?

Accepted Answer

A)  Cash 
B)  Notes Payable (due in two years) 
C)  Supplies 
D)  Accounts Payable 
A)  Cash 
B)  Notes Payable (due in two years) 
C)  Supplies 
D)  Accounts Payable

Which of the following statements about the debit/credit framework is correct?

-Use the information above to answer the following question.What is the amount of current liabilities on the classified balance sheet?

A current asset is one that the company:

A company receives $100,000 cash from investors in exchange for stock.Several weeks later,the company buys a $250,000 machine using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

Assets totaled $24,250 and liabilities totaled $8,500 at the beginning of the year.During the year, assets decreased by $3,500 and liabilities increased by $2,800. -Use the information above to answer the following question.What is the amount of stockholders' equity at the end of the year?

What will be the effect on the balance sheet of issuing shares of common stock in exchange for cash?

-Use the information above to answer the following question.What is the amount of the current ratio (round to two decimal places)?

What is the effect on the balance sheet if a company purchases $100 of supplies using cash?

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

The current ratio:

Every transaction increases at least one account and decreases at least one account.

Daisy Company's trial balance was in balance at the end of the period and showed the following accounts: What is the balance of the credit column on Daisy Company's trial balance?

A company signed an agreement to rent store space from another company.This is an example of a transaction that should be recorded.

The Noble Corp.installs $15,000 of equipment,paying $5,000 cash and promising to pay the remaining $10,000 in 6 months.What is the impact to this transaction on the accounting equation?

Partial list of account balances at the end of the year: -Use the information above to answer the following question.The amount of total current assets that will be reported on the company's balance sheet at the end of the year is:

If a company uses $100 million of its cash to pay off debt,its stockholders' equity will increase $100 million.

Which of the following sequences indicates the correct order of steps in the accounting cycle?

Which of the following would be listed as a current liability?

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 2: Reporting Investing and Financing Results on the Balance Sheet

Which of the following statements about the debit/credit framework is correct?

-Use the information above to answer the following question.What is the amount of current liabilities on the classified balance sheet?

A current asset is one that the company:

A company receives $100,000 cash from investors in exchange for stock.Several weeks later,the company buys a $250,000 machine using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

Assets totaled $24,250 and liabilities totaled $8,500 at the beginning of the year.During the year, assets decreased by $3,500 and liabilities increased by $2,800. -Use the information above to answer the following question.What is the amount of stockholders' equity at the end of the year?

What will be the effect on the balance sheet of issuing shares of common stock in exchange for cash?

-Use the information above to answer the following question.What is the amount of the current ratio (round to two decimal places)?

What is the effect on the balance sheet if a company purchases $100 of supplies using cash?

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

The current ratio:

Every transaction increases at least one account and decreases at least one account.

Daisy Company's trial balance was in balance at the end of the period and showed the following accounts: What is the balance of the credit column on Daisy Company's trial balance?

A company signed an agreement to rent store space from another company.This is an example of a transaction that should be recorded.

The Noble Corp.installs $15,000 of equipment,paying $5,000 cash and promising to pay the remaining $10,000 in 6 months.What is the impact to this transaction on the accounting equation?

Partial list of account balances at the end of the year: -Use the information above to answer the following question.The amount of total current assets that will be reported on the company's balance sheet at the end of the year is:

If a company uses $100 million of its cash to pay off debt,its stockholders' equity will increase $100 million.

Which of the following sequences indicates the correct order of steps in the accounting cycle?

Which of the following would be listed as a current liability?

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters