Exam 2: Accounting System and Financial Statements

Of the following errors,which one will cause the trial balance to be out of balance?

Other names for the income statement are earnings statement,statement of operations,or profit and loss statement.

For what reason do most sellers require customers to have their receipts in order to exchange or return purchased items?

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?

Details of a transaction that took place on October 3. 2.All of the sales activity that took place during the current month.

Which of the following statements is false with regard to the debt ratio?

Krenz Car Care,which is owned and operated by Karl Krenz,began business as a corporation in September of the current year.Karl,a master mechanic,had no experience with keeping a set of books.As a result,Karl entered all of September's transactions directly to the ledger accounts.When he tried to locate a particular entry he found it to be confusing and time consuming.He has hired you to improve his accounting procedures.The accounts in his general ledger are as follows: Prepare the general journal entries,in chronological order (a) through (e),from the T-account entries shown.Include a brief description of the probable nature of each transaction.

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: If the owners invested an additional $12,000 in the business and dividends of $5,000 were paid during the year,what was the amount of net income earned by Josephine's Bakery during the current year?

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

A $72,000 receipt of cash from a customer paying on their account was recorded as a $72,000 debit to Accounts Receivable.Assuming this journal entry was posted,what correcting entry (if any) is needed?

Accounting records are also referred to as the books.

For 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.

On December 30,2014,Sheffield Industries paid $12,000 cash to its landlord to rent office space for the six-month period beginning January 1,2015.How would Sheffield record this transaction?

Cash dividends should be treated as an expense to the business.

Stride Rite had total liabilities of $130 million and total assets of $375 million.Its debt ratio was _______________.

An account used to record the owners' investments in the business is called:

Which of the following is the appropriate journal entry if a company performs a service and then bills the customer?

If a company provides services to a customer on credit,the service provider company should credit Accounts Receivable.

Increases in assets are _______________,while increases in liabilities are _______________.

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