Exam 2: Analyzing and Recording Transactions

Jerry's Butcher Shop had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year \ 114,000 \ 68,000 End of the year 135,000 73,000 - If Jerry made no investments in the business but withdrew $5,000 during the year, what was the amount of net income earned by Jerry's Butcher Shop?

Jerry's Butcher Shop had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year \ 114,000 \ 68,000 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?

A record containing all the separate accounts for a company as well as all of their balances is called the ________.

Identify the statement that is incorrect.

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

A general journal is:

All of the following statements accurately describe the debt ratio except.

The same four basic financial statements are prepared by both U.S. GAAP and IFRS.

Which of the following is NOT an asset account:

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

A credit entry:

Identify the statement below that is correct.

The debt ratio is used:

Withdrawals by the owner are a business expense.

Neither U.S. GAAP nor IFRS require the use of accrual basis accounting.

Describe the link between a business's income statement, the statement of owner's equity, and the balance sheet.

Willow Rentals purchased office supplies on credit. The general journal entry made by Willow Rentals will include a:

Smiles Entertainment had the following accounts and balances at December 31: Account Debit Credit Cash \ 10,000 Accounts Receivable 2,000 Prepaid Insurance 2,400 Supplies 1,000 Accounts Payable \ 5,000 T. Happy. Capital 4,900 Service Revenue 7,000 Salaries Expense 500 Utilities Expense 1,000 Totals Using the information in the table, calculate the company's reported net income for the period.

The debt ratio of Company A is .31 and the debt ratio of Company B is .21. Based on this information, an investor can conclude:

Geraldine Parker, the owner of Gi Gi's Dance Studio, started the business by investing $10,000 cash and donating a building worth $20,000. Identify the general journal entry below that Gi Gi's will make to record the transaction.