Exam 2: Analyzing for Business Transactions

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 _____________________.

Gi Gi's Bakery has total assets of $425 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio.

For each of the accounts in the following table (1) identify the type of account as an asset, liability, equity, revenue, or expense, and (2) identify the normal balance of the account. Account Type Normal Balance a. Wages Experse b. Accounts Receivable c. Commissions Eamed d. Salaries Payable e. Common Stock f. Unearned Advertising Revenue E. Salaries Expense H. Magazine Subscription Revenue i. Dividends j. Prepaid Insurance

Jerry's Butcher Shop, Inc. had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year ............ \1 14,000 \6 8,000 End of the year ...................... 135,000 73,000 If Jerry invested an additional $12,000 in the business during the year, but withdrew no assets during the year, what was the amount of net income earned by Jerry's Butcher Shop, Inc.?

Identify the statement below that is correct.

_________________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

Source documents provide evidence of business transactions and are the basis for accounting entries.

Jerry's Butcher Shop, Inc. had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year ............ \1 14,000 \6 8,000 End of the year ...................... 135,000 73,000 If Jerry made no investments in the business and withdrew no assets during the year, what was the amount of net income earned by Jerry's Butcher Shop, Inc.?

Identify the statement below that is correct?

The higher a company's debt ratio, the lower the risk of a company not being able to meet its obligations.

A business's record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is known as a(n):

Identify the accounts that would normally have balances in the credit column of a business's trial balance

The general journal is known as the book of final entry because financial statements are prepared from it.

Posting is the transfer of journal entry information to the ledger.

J. Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

A transaction that credits an asset account and credits a liability account must also affect one or more other accounts.

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?

Funky Music purchased $25,000 of equipment for cash. The Equipment asset account is _______________ for $25,000 and the cash account is _______________ for $25,000.

_____________________________ requires that each transaction affect, and be recorded in, at least two accounts. It also means that total amounts debited must equal total amounts credited for each transaction.

On February 5, Teddy's Catering purchased an oven that cost $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.