Question 1

The first step in the processing of a transaction is to analyze the transaction and source documents.

Accepted Answer

A) True 
 B)False

Question 2

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.

Accepted Answer

A)  38.6%. 
B)  13.4%. 
C)  34.9%. 
D)  25.9%. 
E)  14.9%. 
A)  38.6%. 
B)  13.4%. 
C)  34.9%. 
D)  25.9%. 
E)  14.9%.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  Journal. 
B)  Posting. 
C)  Trial balance. 
D)  Account. 
E)  Chart of accounts. 
A)  Journal. 
B)  Posting. 
C)  Trial balance. 
D)  Account. 
E)  Chart of accounts.

Question 5

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 common stock 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 common stock 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 6

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

Accepted Answer

A) True 
 B)False

Question 7

The posting process is the link between the ________ and the ________.

Accepted Answer

The answer of The posting process is the link between...

Question 8

The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpful to both its owners and creditors.

Accepted Answer

A) True 
 B)False

Question 9

Mary Sunny began business as Sunny Law Firm on November 1. Record the following November transactions by making entries directly to the T-accounts provided. Then, prepare a trial balance, as of November 30.
a) Mary invested $15,000 cash and a law library valued at $6,000 in exchange for common stock.
b) Purchased $7,500 of office equipment from John Bronx on credit.
c) Completed legal work for a client and received $1,500 cash in full payment.
d) Paid John Bronx. $3,500 cash in partial settlement of the amount owed.
e) Completed $4,000 of legal work for a client on credit.
f) The firm paid $2,000 cash in dividends.
g) Received $2,500 cash as partial payment for the legal work completed for the client in (e).
h) Paid $2,500 cash for the legal secretary's salary.

Accepted Answer

@#IMG-DLM& Sunny Law Firm
Trial Balance
November 3

Question 10

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 11

Which of the following is not a step in the accounting process?

Accepted Answer

A)  Record relevant transactions and events in a journal. 
B)  Post journal information to the ledger accounts. 
C)  Prepare and analyze the trial balance. 
D)  Analyze each transaction. 
E)  Verify that revenues and expenses are equal. 
A)  Record relevant transactions and events in a journal. 
B)  Post journal information to the ledger accounts. 
C)  Prepare and analyze the trial balance. 
D)  Analyze each transaction. 
E)  Verify that revenues and expenses are equal.

Question 12

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 13

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

Accepted Answer

A)  Dividends account. 
B)  Common Stock account. 
C)  Asset account. 
D)  T-account. 
E)  Balance column sheet. 
A)  Dividends account. 
B)  Common Stock account. 
C)  Asset account. 
D)  T-account. 
E)  Balance column sheet.

Question 14

In a double-entry accounting system, the total dollar amount debited must always equal the total dollar amount credited.

Accepted Answer

A) True 
 B)False

Question 15

A $15 credit to Sales was posted as a $150 credit. By what amount is the Sales account in error?

Accepted Answer

A)  $150 understated. 
B)  $135 overstated. 
C)  $150 overstated. 
D)  $15 understated. 
E)  $135 understated. 
A)  $150 understated. 
B)  $135 overstated. 
C)  $150 overstated. 
D)  $15 understated. 
E)  $135 understated.

Question 16

The financial statement that summarizes the changes in the retained earnings account is called the balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

Explain the recording and posting processes.

Accepted Answer

Information from business transactions a

Question 18

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 19

Which financial statement reports an organization's financial position at a single point in time?

Accepted Answer

A)  Income statement. 
B)  Balance sheet. 
C)  Statement of retained earnings. 
D)  Cash flow statement. 
E)  Trial balance. 
A)  Income statement. 
B)  Balance sheet. 
C)  Statement of retained earnings. 
D)  Cash flow statement. 
E)  Trial balance.

Question 20

You decrease the Accounts Payable account on the ________side of its account.

Accepted Answer

The answer of You decrease the Accounts Payable account on...

The first step in the processing of a transaction is to analyze the transaction and source documents.

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.

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

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 statement below that is correct.

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

The posting process is the link between the and the .

The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpful to both its owners and creditors.

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.

Which of the following is not a step in the accounting process?

Which of the following statements is not true:

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

In a double-entry accounting system, the total dollar amount debited must always equal the total dollar amount credited.

A $15 credit to Sales was posted as a $150 credit. By what amount is the Sales account in error?

The financial statement that summarizes the changes in the retained earnings account is called the balance sheet.

Explain the recording and posting processes.

A business's source documents:

Which financial statement reports an organization's financial position at a single point in time?

You decrease the Accounts Payable account on the ________side of its account.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Partnership Accounting

Filters

Exam 15: Analyzing for Business Transactions

The first step in the processing of a transaction is to analyze the transaction and source documents.

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.

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

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 statement below that is correct.

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

The posting process is the link between the ________ and the ________.

The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpful to both its owners and creditors.

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.

Which of the following is not a step in the accounting process?

Which of the following statements is not true:

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

In a double-entry accounting system, the total dollar amount debited must always equal the total dollar amount credited.

A $15 credit to Sales was posted as a $150 credit. By what amount is the Sales account in error?

The financial statement that summarizes the changes in the retained earnings account is called the balance sheet.

Explain the recording and posting processes.

A business's source documents:

Which financial statement reports an organization's financial position at a single point in time?

You decrease the Accounts Payable account on the ________side of its account.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Partnership Accounting

Filters

The posting process is the link between the and the .