Question 1

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

Accepted Answer

ledger accounts

Question 2

Prepaid expenses are generally:

Accepted Answer

A)   Payments made for products and services that do not ever expire.
B)   Classified as liabilities on the balance sheet.
C)   Decreases in equity.
D)   Assets that represent prepayments of future expenses.
E)   Promises of payments by customers. D

Question 3

If Taylor Willow, the owner of Willow Hardware Inc., uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to:

Accepted Answer

A)   Debit Automobiles and credit Cash
B)   Debit Cash and credit Salary Expense.
C)   Debit Cash and credit Dividends.
D)   Debit Dividends and credit Cash.
E)   Debit Automobiles and credit Cash. D

Question 4

If insurance coverage for the next two years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

Accepted Answer

A) True 
 B)False

Question 5

When a company bills a customer for $700 for services rendered, the journal entry to record this transaction will include a $700 debit to Services Revenue.

Accepted Answer

A) True 
 B)False

Question 6

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

Accepted Answer

A)   The total of the Debit column of the trial balance will exceed the total of the Credit column by $4,700.
B)   The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700.
C)   The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400.
D)   The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400.
E)   The total of the Debit column of the trial balance will equal the total of the Credit column.

Question 7

Happiness Catering has total assets of $385 million. Its total liabilities are $100 million and its equity is $285 million. Calculate its debt ratio.

Accepted Answer

A)   35.1%.
B)   26.0%.
C)   38.5%.
D)   28.5%.
E)   58.8%.

Question 8

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

Accepted Answer

The answer of Describe what source documents are and the...

Question 9

Select the account below that normally has a credit balance.

Accepted Answer

A)   Cash.
B)   Office Equipment.
C)   Wages Payable.
D)   Dividends.
E)   Sales Salaries Expense.

Question 10

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 stockholders.
E)   A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.

Question 11

Unearned revenues are generally:

Accepted Answer

A)   Revenues that have been earned and received in cash.
B)   Revenues that have been earned but not yet collected in cash.
C)   Liabilities created when a customer pays in advance for products or services before the revenue is earned.
D)   Recorded as an asset in the accounting records.
E)   Increases to stockholders equity.

Question 12

The four categories of equity accounts are ________________, __________________, ______________________, and ______________________.

Accepted Answer

The answer of The four categories of equity accounts are...

Question 13

Identify the account below that is classified as an asset account:

Accepted Answer

A)   Unearned Revenue
B)   Accounts Payable
C)   Supplies
D)   Common Stock
E)   Service Revenue

Question 14

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 15

If a company purchases equipment paying cash, the journal entry to record this transaction will include a debit to Cash.

Accepted Answer

A) True 
 B)False

Question 16

Increases in liability accounts are recorded as debits.

Accepted Answer

A) True 
 B)False

Question 17

Identify the accounts that would normally have balances in the debit column of a business's trial balance.

Accepted Answer

A)   Assets and expenses.
B)   Assets and revenues.
C)   Revenues and expenses.
D)   Liabilities and expenses.
E)   Liabilities and dividends.

Question 18

A company's chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

Accepted Answer

A) True 
 B)False

Question 19

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

Accepted Answer

A)   A debit to an unearned revenue account.
B)   A debit to a prepaid expense account.
C)   A credit to an unearned revenue account.
D)   A credit to a prepaid expense account.
E)   No entry is required at the time of collection.

Question 20

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of On December 3, the ABBJ Company paid...

Exam 2: Analyzing for Business Transactions

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

Prepaid expenses are generally:

If Taylor Willow, the owner of Willow Hardware Inc., uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to:

If insurance coverage for the next two years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

When a company bills a customer for $700 for services rendered, the journal entry to record this transaction will include a $700 debit to Services Revenue.

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

Happiness Catering has total assets of $385 million. Its total liabilities are $100 million and its equity is $285 million. Calculate its debt ratio.

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

Select the account below that normally has a credit balance.

The balance column in a ledger account is:

Unearned revenues are generally:

The four categories of equity accounts are , , , and ______.

Identify the account below that is classified as an asset account:

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

If a company purchases equipment paying cash, the journal entry to record this transaction will include a debit to Cash.

Increases in liability accounts are recorded as debits.

Identify the accounts that would normally have balances in the debit column of a business's trial balance.

A company's chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.