Question 1

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

Accepted Answer

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

Question 2

An asset created by prepayment of an insurance premium is:

Accepted Answer

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

Question 3

An account used to record stockholders' investments in a business is called a(n):

Accepted Answer

A) Dividends account. 
B) Common stock account. 
C) Revenue account. 
D) Expense account. 
E) Liability account.

Question 4

A.Egert Consulting immediately paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that A.Egert Consulting will make to record this transaction.

Accepted Answer

A)  $\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 500 & \
\hline \text { Cash } & & 500 \
\hline
\end{array}$ 
B)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 500 & \
\hline \text { Utilities Expense } & & 500 \
\hline
\end{array}$ 
C)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$ 
E)  $\begin{array}{|l|r|r|}
\hline \text { Prepaid Utilities } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$

Question 5

Identify the correct formula below used to calculate the debt ratio.

Accepted Answer

A) Total Equity/Total Liabilities. 
B) Total Liabilities/Total Equity. 
C) Total Liabilities/Total Assets. 
D) Total Assets/Total Liabilities. 
E) Total Equity/Total Assets.

Question 6

Explain the difference between a general ledger and a chart of accounts.

Accepted Answer

The answer of Explain the difference between a general ledger...

Question 7

A debit:

Accepted Answer

A) Always increases an account. 
B) Is the right-hand side of a T-account. 
C) Always decreases an account. 
D) Is the left-hand side of a T-account. 
E) Is not needed to record a transaction.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The balance column in a ledger account is:

Accepted Answer

A) An account entered on the balance sheet. 
B) A column for showing the balance of the account after each entry is posted. 
C) Another name for the dividends account. 
D) An account used to record the transfers of assets from a business to its owner(s). 
E) A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.

Question 10

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

Accepted Answer

A) It is of use to both internal and external users of accounting information. 
B) A relatively high ratio is always desirable. 
C) The dividing line for a high and low ratio varies from industry to industry. 
D) Many factors such as a company's age,stability,profitability and cash flow influence the determination of what would be interpreted as a high versus a low ratio. 
E) The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt.

Question 11

Which of the following does not affect the equity of a business?

Accepted Answer

A) Unearned Revenue 
B) Common Stock 
C) Services Revenue 
D) Wages Expense 
E) Dividends

Question 12

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

Accepted Answer

A) Account balance column. 
B) Debit column. 
C) Posting reference column. 
D) Credit column. 
E) Description column.

Question 13

Explain the debt ratio and its use in analyzing a company's financial condition.

Accepted Answer

The answer of Explain the debt ratio and its use...

Question 14

A general journal gives a complete record of each transaction in one place,and shows the debits and credits for each transaction.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

If the common stock account had a $10,000 credit balance at the beginning of the period,and during the period,stockholders invest an additional $5,000,the balance in the common stock account listed on the trial balance will be equal to a debit balance of $5,000.

Accepted Answer

A) True 
 B)False

Question 17

Annie's Catering provided $1,000 of catering services and billed its client for the amount owed.Given the choices below,determine the general journal entry that Annie's Catering will make to record this transaction.

Accepted Answer

A)  $\begin{array}{|l|r|r|}
\hline \text { Unearned Catering Revenue } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$ 
B)  $\begin{array}{|l|r|r|}
\hline \text { Catering Revenue } & 1,000 & \
\hline \text { Accounts Receivable } & & 1,000 \
\hline
\end{array}$ 
C)  $\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 1,000 & \
\hline \text { Unearned Catering Revenue } & & 1,000 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$ 
E)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$

Question 18

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 19

The right side of a T-account is a(n):

Accepted Answer

A) Debit. 
B) Increase. 
C) Credit. 
D) Decrease. 
E) Account balance.

Question 20

The debt ratio is used:

Accepted Answer

A) To measure the ratio of equity to expenses. 
B) To assess the risk associated with a company's use of liabilities. 
C) Only by banks when a business applies for a loan. 
D) To determine how much debt a firm should pay off. 
E) To determine how much debt a company should borrow.

Exam 2: Financial Statements and the Accounting System

The posting process is the link between the and the .

An asset created by prepayment of an insurance premium is:

An account used to record stockholders' investments in a business is called a(n) :

A.Egert Consulting immediately paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that A.Egert Consulting will make to record this transaction.

Identify the correct formula below used to calculate the debt ratio.

Explain the difference between a general ledger and a chart of accounts.

A debit:

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

The balance column in a ledger account is:

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

Which of the following does not affect the equity of a business?

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

Explain the debt ratio and its use in analyzing a company's financial condition.

A general journal gives a complete record of each transaction in one place,and shows the debits and credits for each transaction.

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

If the common stock account had a $10,000 credit balance at the beginning of the period,and during the period,stockholders invest an additional $5,000,the balance in the common stock account listed on the trial balance will be equal to a debit balance of $5,000.

Annie's Catering provided $1,000 of catering services and billed its client for the amount owed.Given the choices below,determine the general journal entry that Annie's Catering will make to record this transaction.

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

The right side of a T-account is a(n) :

The debt ratio is used: