Question 1

The third step in the analyzing and recording process is to post the information to the ________.

Accepted Answer

The answer of The third step in the analyzing and...

Question 2

Describe what source documents are and the purpose they serve in a business.

Accepted Answer

Source documents are the proof that tran

Question 3

At a given point in time, a business's trial balance is a list of all of its general ledger accounts and their balances.

Accepted Answer

A) True 
 B)False

Question 4

List the four steps in recording transactions.

Accepted Answer

1. Analyze each transaction and event fr

Question 5

Jay's Limo Services paid $300 cash to employees for work performed in the current period. Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Salaries Expense } & 300 & \
\hline \text { Accounts Payable } & & 300 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Salaries Expense } & 300 & \
\hline \text { Cash } & & 300 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Salaries Expense } & 300 & \
\hline \text { J. Smith. Withdrawals } & & 300 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 300 & \
\hline \text { Salaries Expense } & & 300 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 300 & \
\hline \text { Salaries Expense } & & 300 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Salaries Expense } & 300 & \
\hline \text { Accounts Payable } & & 300 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Salaries Expense } & 300 & \
\hline \text { Cash } & & 300 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Salaries Expense } & 300 & \
\hline \text { J. Smith. Withdrawals } & & 300 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 300 & \
\hline \text { Salaries Expense } & & 300 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 300 & \
\hline \text { Salaries Expense } & & 300 \
\hline
\end{array}$$

Question 6

An asset created by prepayment of an insurance premium is:

Accepted Answer

A)  Recorded as a credit to Prepaid Insurance. 
B)  Recorded as a credit to Unearned Revenue. 
C)  Recorded as a debit to Prepaid Insurance. 
D)  Not recorded in the accounting records until the insurance period expires. 
E)  Recorded as a debit to Unearned Revenue. 
A)  Recorded as a credit to Prepaid Insurance. 
B)  Recorded as a credit to Unearned Revenue. 
C)  Recorded as a debit to Prepaid Insurance. 
D)  Not recorded in the accounting records until the insurance period expires. 
E)  Recorded as a debit to Unearned Revenue.

Question 7

The debt ratio is calculated by dividing total assets by total liabilities.

Accepted Answer

A) True 
 B)False

Question 8

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?

Accepted Answer

A)  $$\begin{array} { | l | r | l | } 
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | l | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Design Revenue } & & 1,500 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Accounts Receivable } & & 1,500 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | l | } 
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | l | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Design Revenue } & & 1,500 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Accounts Receivable } & & 1,500 \
\hline
\end{array}$$

Question 9

An income statement is also called an earnings statement, a statement of operations or a profit and loss statement.

Accepted Answer

A) True 
 B)False

Question 10

Golddigger Services Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a:

Accepted Answer

A)  Debit to Management Fees Earned for $60,000. 
B)  Credit to Management Fees Earned for $60,000. 
C)  Credit to Unearned Management Fees for $60,000. 
D)  Credit to Cash for $60,000. 
E)  Debit to Unearned Management Fees for $60,000. 
A)  Debit to Management Fees Earned for $60,000. 
B)  Credit to Management Fees Earned for $60,000. 
C)  Credit to Unearned Management Fees for $60,000. 
D)  Credit to Cash for $60,000. 
E)  Debit to Unearned Management Fees for $60,000.

Question 11

Credits always increase account balances.

Accepted Answer

A) True 
 B)False

Question 12

Debits increase asset and expense accounts.

Accepted Answer

A) True 
 B)False

Question 13

The heading on every financial statement lists the three W's-Who (the name of the business); What (the name of the statement); and Where (the organization's address).

Accepted Answer

A) True 
 B)False

Question 14

A debit entry is always an increase in the account.

Accepted Answer

A) True 
 B)False

Question 15

A debit is used to record which of the following:

Accepted Answer

A)  A decrease in an expense account. 
B)  An increase in the owner's capital account. 
C)  An increase in a revenue account. 
D)  An increase in the owner's withdrawals account. 
E)  A decrease in an asset account. 
A)  A decrease in an expense account. 
B)  An increase in the owner's capital account. 
C)  An increase in a revenue account. 
D)  An increase in the owner's withdrawals account. 
E)  A decrease in an asset account.

Question 16

Match the following definitions and terms by placing the letter that identifies the best definition in the blank space next to the term.
_____ 1. Source documents
_____ 2. Debit
_____ 3. Posting
4. Double-entry accounting
_____ 5. Ledger
6. Journal
_____ 7. Account
8. Credit
_____ 9. T-account
_____ 10. Trial balance
A. Decrease in an asset, owner withdrawal and expense account, and increase in a liability, owner's capital and revenue account; recorded on the right side of a T-account.
 B. A record containing all the accounts of a company and their balances.
C. An accounting system where each transaction affects and is recorded in at least two accounts; the sum of the debits for each entry must equal the sum of its credits.
D. A company's chronological record of each transaction in one place that shows debits and credits for each transaction.
E. An increase in an asset and expense account, and decrease in a liability, owner's capital, and revenue account; recorded on the left side of a T-account.
F. A record of the increases and decreases in a specific asset, liability, equity, revenue, or expense item.
G. A representation of a ledger account used to understand the effects of transactions.
H. A list of accounts and their balances at a point in time.
I. The process of transferring journal entry information to the ledger accounts.
J. Verifiable evidence that transactions have occurred used to record accounting information.

Accepted Answer

1. J; 2. E; 3. I; 4.

Question 17

When a company provides services for which cash will not be received until some future date, the company should record the amount billed as accounts receivable.

Accepted Answer

A) True 
 B)False

Question 18

What is a trial balance? What is its purpose?

Accepted Answer

The trial balance is a list of all of th

Question 19

At year-end, Henry Laundry Service noted the following errors in its trial balance:
1. It understated the total debits to the Cash account by $500 when computing the account balance.
2. A credit sale for $311 was recorded as a credit to the revenue account, but the offsetting debit was not posted.
3. A cash payment to a creditor for $2,600 was never recorded.
4. The $680 balance of the Prepaid Insurance account was listed in the credit column of the trial
128
balance.
5. A $24,900 van purchase was recorded as a $24,090 debit to Equipment and a $24,090 credit to Notes Payable.
6. A purchase of office supplies for $150 was recorded as a debit to Office Equipment. The offsetting credit entry was correct.
7. An additional investment of $4,000 by Del Henry was recorded as a debit to Del Henry, Capital and as a credit to Cash.
8. The cash payment of the $510 utility bill for December was recorded (but not paid) twice.
9. The revenue account balance of $79,817 was listed on the trial balance as $97,817.
10. A $1,000 cash withdrawal was recorded as a $100 debit to Del Henry, Withdrawal and $100 credit to cash.
Using the form below, indicate whether each error would cause the trial balance to be out of balance, the amount of any imbalance, and whether a correcting journal entry is required.

Accepted Answer

The answer of At year-end, Henry Laundry Service noted the...

Question 20

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

Accepted Answer

A)  Unearned Revenue; Accounts Payable; Owner's Withdrawals. 
B)  Notes Payable; Cash; Owner's Withdrawals. 
C)  Building; Prepaid Insurance; Supplies Expense. 
D)  Accounts Payable; Cash; Supplies. 
E)  Cash; Prepaid Insurance; Equipment. 
A)  Unearned Revenue; Accounts Payable; Owner's Withdrawals. 
B)  Notes Payable; Cash; Owner's Withdrawals. 
C)  Building; Prepaid Insurance; Supplies Expense. 
D)  Accounts Payable; Cash; Supplies. 
E)  Cash; Prepaid Insurance; Equipment.

Exam 2: Analyzing and Recording Transactions

The third step in the analyzing and recording process is to post the information to the ________.

Describe what source documents are and the purpose they serve in a business.

At a given point in time, a business's trial balance is a list of all of its general ledger accounts and their balances.

List the four steps in recording transactions.

Jay's Limo Services paid $300 cash to employees for work performed in the current period. Which of the following general journal entries will Jay's Limo Services make to record this transaction?

An asset created by prepayment of an insurance premium is:

The debt ratio is calculated by dividing total assets by total liabilities.

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?

An income statement is also called an earnings statement, a statement of operations or a profit and loss statement.

Golddigger Services Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a:

Credits always increase account balances.

Debits increase asset and expense accounts.

The heading on every financial statement lists the three W's-Who (the name of the business); What (the name of the statement); and Where (the organization's address).

A debit entry is always an increase in the account.

A debit is used to record which of the following:

When a company provides services for which cash will not be received until some future date, the company should record the amount billed as accounts receivable.

What is a trial balance? What is its purpose?

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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