Question 1

Which of the following is decreased with a credit?

Accepted Answer

A) Unearned revenue 
B) Prepaid insurance 
C) Accounts payable 
D) Service revenue 
A) Unearned revenue 
B) Prepaid insurance 
C) Accounts payable 
D) Service revenue

Question 2

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.
  
-A transaction recorded as a debit to Office Supplies and a credit to Accounts Payable.

Accepted Answer

(I)(I)(N)(

Question 3

Which of the following statements is true?

Accepted Answer

A) The entry to record depreciation expense involves a credit to a liability. 
B) The entry to record depreciation expense involves a credit to depreciation expense. 
C) The entry to record depreciation expense involves a credit to the asset being depreciated. 
D) The entry to record depreciation expense involves a credit to a contra-asset. 
A) The entry to record depreciation expense involves a credit to a liability. 
B) The entry to record depreciation expense involves a credit to depreciation expense. 
C) The entry to record depreciation expense involves a credit to the asset being depreciated. 
D) The entry to record depreciation expense involves a credit to a contra-asset.

Question 4

The Grayson Clinic provides dental care services.During 2016,the clinic entered into the following transactions:
1)On October 1,collected $9,000 in advance of services being provided.The services are to be performed equally over the next 12 months.
2)On April 1,purchased insurance costing $36,000.The insurance policy would cover the next 12 months.
Required:
a)Draw T-accounts and post the year-end adjusting entries to appropriate T-accounts.
b)Analyze how the year end adjusting entries affect the Financial Statements by using the horizontal financial model below.Precede the amount with a minus sign if the transaction reduces that section of the equation.Enter 0 for items not affected.

Accepted Answer

The answer of The Grayson Clinic provides dental care services.During...

Question 5

To record an asset source transaction,an asset account would be debited and a liability or equity credited.

Accepted Answer

A) True 
 B)False

Question 6

Manhattan Company paid $450 in interest on a loan.$300 of the interest had been accrued in a prior accounting period.Which of the following journal entries correctly records this transaction?

Accepted Answer

The answer of Manhattan Company paid $450 in interest on...

Question 7

The left side of a T-account is known as the:

Accepted Answer

A) Equity side 
B) Debit side 
C) Credit side 
D) Claims side 
A) Equity side 
B) Debit side 
C) Credit side 
D) Claims side

Question 8

Indicate whether each of the following statements is true or false.
_____ a)A journal entry includes at least one debit and one credit entry.
_____ b)The double-entry accounting format always records two separate events simultaneously.
_____ c)The double-entry system requires that total debits equal total credits.
_____ d)When an asset decreases in a double-entry system,an equity account may also decrease.
_____ e)The double entry system ensures complete accuracy in a company's accounting records.

Accepted Answer

a)True b)F

Question 9

A liability account normally has a credit balance.

Accepted Answer

A) True 
 B)False

Question 10

Use the following information to answer questions 
Wichita,Inc.had the following amounts on its 12/31/16 financial statements.
  
-The debt-to-assets ratio for Wichita is:

Accepted Answer

A) 5%. 
B) 10%. 
C) 45%. 
D) 50%. 
A) 5%. 
B) 10%. 
C) 45%. 
D) 50%.

Question 11

Chestnut,Inc.had the following balances on its 12/31/16 balance sheet,before buying land.
If Chestnut were to purchase land for $40,000 on credit under an agreement to pay for the land in one year,what would be its debt-to-assets ratio immediately after the purchase?

Accepted Answer

A) 0.42 
B) 0.46 
C) 0.37 
D) 0.34 
A) 0.42 
B) 0.46 
C) 0.37 
D) 0.34

Question 12

Which of the following ratios would be most useful in evaluating a company's performance from the owners' perspective?

Accepted Answer

A) Return on assets ratio. 
B) Debt to assets ratio. 
C) Return on equity ratio. 
D) Either the debt to assets ratio or the return on equity ratio. 
A) Return on assets ratio. 
B) Debt to assets ratio. 
C) Return on equity ratio. 
D) Either the debt to assets ratio or the return on equity ratio.

Question 13

Van Buren Company experienced an accounting event that was recorded in the company's general journal:
Which of the following choices accurately reflects how this event affects the company's financial statements?

Accepted Answer

The answer of Van Buren Company experienced an accounting event...

Question 14

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.
  
-A transaction recorded as a debit to Cash and a credit to Common Stock.

Accepted Answer

(I)(N)(I)(

Question 15

An increase to the account Dividends would be recorded as a credit;as a result,the account Dividends normally has a credit balance.

Accepted Answer

A) True 
 B)False

Question 16

Vargas Company purchased a computer for $3,000 on January 1,2016.The computer is estimated to have a 5-year useful life and a $500 salvage value.What adjusting entry would Vargas record on December 31,2016 to recognize expense related to use of the computer?

Accepted Answer

The answer of Vargas Company purchased a computer for $3,000...

Question 17

Indicate whether each of the following statements is true or false
_____ a)The general ledger is often called the book of original entry.
_____ b)Transactions are first recorded in the journal and then transferred to the ledger.
_____ c)The process of making entries into a journal is called posting.
_____ d)The ledger is an example of a source document.
_____ e)The list of a business's account titles and account numbers is called a chart of accounts.

Accepted Answer

a)False b)

Question 18

Which of the following transactions would immediately increase a company's return on assets ratio?

Accepted Answer

A) Received cash from customers for goods sold to them on account last month. 
B) Borrowed cash from a local bank. 
C) Incurred expenses on account. 
D) Paid cash on accounts payable. 
A) Received cash from customers for goods sold to them on account last month. 
B) Borrowed cash from a local bank. 
C) Incurred expenses on account. 
D) Paid cash on accounts payable.

Question 19

Vernon Company recorded a business event in T-accounts as follows:
Which of the following reflects how this event affects the company's financial statements?

Accepted Answer

The answer of Vernon Company recorded a business event in...

Question 20

Magellan Corporation earned net income of $32,000 and paid cash dividends of $8,500 to its stockholders.Which of the following choices reflects the effect of closing entries on Magellan's financial statements?

Accepted Answer

The answer of Magellan Corporation earned net income of $32,000...

Which of the following is decreased with a credit?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -A transaction recorded as a debit to Office Supplies and a credit to Accounts Payable.

Which of the following statements is true?

To record an asset source transaction,an asset account would be debited and a liability or equity credited.

Manhattan Company paid $450 in interest on a loan.$300 of the interest had been accrued in a prior accounting period.Which of the following journal entries correctly records this transaction?

The left side of a T-account is known as the:

A liability account normally has a credit balance.

Use the following information to answer questions Wichita,Inc.had the following amounts on its 12/31/16 financial statements. -The debt-to-assets ratio for Wichita is:

Chestnut,Inc.had the following balances on its 12/31/16 balance sheet,before buying land. If Chestnut were to purchase land for $40,000 on credit under an agreement to pay for the land in one year,what would be its debt-to-assets ratio immediately after the purchase?

Which of the following ratios would be most useful in evaluating a company's performance from the owners' perspective?

Van Buren Company experienced an accounting event that was recorded in the company's general journal: Which of the following choices accurately reflects how this event affects the company's financial statements?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -A transaction recorded as a debit to Cash and a credit to Common Stock.

An increase to the account Dividends would be recorded as a credit;as a result,the account Dividends normally has a credit balance.

Vargas Company purchased a computer for $3,000 on January 1,2016.The computer is estimated to have a 5-year useful life and a $500 salvage value.What adjusting entry would Vargas record on December 31,2016 to recognize expense related to use of the computer?

Which of the following transactions would immediately increase a company's return on assets ratio?

Vernon Company recorded a business event in T-accounts as follows: Which of the following reflects how this event affects the company's financial statements?

Magellan Corporation earned net income of $32,000 and paid cash dividends of $8,500 to its stockholders.Which of the following choices reflects the effect of closing entries on Magellan's financial statements?

An Introduction to Accounting

Understanding the Accounting Cycle

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 3: The Double-Entry Accounting System

Which of the following is decreased with a credit?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -A transaction recorded as a debit to Office Supplies and a credit to Accounts Payable.

Which of the following statements is true?

To record an asset source transaction,an asset account would be debited and a liability or equity credited.

Manhattan Company paid $450 in interest on a loan.$300 of the interest had been accrued in a prior accounting period.Which of the following journal entries correctly records this transaction?

The left side of a T-account is known as the:

A liability account normally has a credit balance.

Use the following information to answer questions Wichita,Inc.had the following amounts on its 12/31/16 financial statements. -The debt-to-assets ratio for Wichita is:

Chestnut,Inc.had the following balances on its 12/31/16 balance sheet,before buying land. If Chestnut were to purchase land for $40,000 on credit under an agreement to pay for the land in one year,what would be its debt-to-assets ratio immediately after the purchase?

Which of the following ratios would be most useful in evaluating a company's performance from the owners' perspective?

Van Buren Company experienced an accounting event that was recorded in the company's general journal: Which of the following choices accurately reflects how this event affects the company's financial statements?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -A transaction recorded as a debit to Cash and a credit to Common Stock.

An increase to the account Dividends would be recorded as a credit;as a result,the account Dividends normally has a credit balance.

Vargas Company purchased a computer for $3,000 on January 1,2016.The computer is estimated to have a 5-year useful life and a $500 salvage value.What adjusting entry would Vargas record on December 31,2016 to recognize expense related to use of the computer?

Which of the following transactions would immediately increase a company's return on assets ratio?

Vernon Company recorded a business event in T-accounts as follows: Which of the following reflects how this event affects the company's financial statements?

Magellan Corporation earned net income of $32,000 and paid cash dividends of $8,500 to its stockholders.Which of the following choices reflects the effect of closing entries on Magellan's financial statements?

An Introduction to Accounting

Understanding the Accounting Cycle

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

Filters