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Exam 2: The Balance Sheet

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Question 81

Multiple Choice

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A ________ is a list of account titles with corresponding reference numbers used by companies so that transaction items are consistently named.

A) chart of accounts
B) trial balance
C) classified balance sheet
D) ledger

E) All of the above
F) B) and C)

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Question 82

Multiple Choice

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The Smith Corp.began business this year and entered into the following transactions during the year.The company issued common stock in exchange for cash of $80,000 from stockholders,borrowed $40,000 from a bank,bought $12,000 of inventory on account,and purchased $32,000 of equipment by paying $12,000 in cash and issuing a note for the remainder.What is the amount of total assets to be reported on the balance sheet at the end of the year?

A) $104,000
B) $120,000
C) $128,000
D) $152,000

E) None of the above
F) B) and C)

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Question 83

Multiple Choice

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Listed below are components of several transactions.Indicate whether a debit (dr) or credit (cr) would be required to record the component of the transaction. -Increase in Accounts Payable.

A company's trial balance included the following account balances: $\begin{array}{lr}\text { Accounts Payable } & 19,207 \\\text { Accounts Receivable } & 81,336 \\\text { Cash } & 73,324 \\\text { Income Tax Payable } & 3,512 \\\text { Inventory } & 25,816 \\\text { Note Payable, due in two years } & 1,709 \\\text { Equipment } & 54,128 \\\text { Stockholders'Equity } & 202,808 \\\text { Supplies } & 5,512 \\\text { Wages Payable } & 12,880\end{array}$ What is the amount of Total Assets on the Balance Sheet?

A company's trial balance included the following account balances: $\begin{array}{lr}\text { Accounts Payable } & 19,207 \\\text { Accounts Receivable } & 81,336 \\\text { Cash } & 73,324 \\\text { Income Tax Payable } & 3,512 \\\text { Inventory } & 25,816 \\\text { Note Payable, due in two years } & 1,709 \\\text { Equipment } & 54,128 \\\text { Stockholders'Equity } & 202,808 \\\text { Supplies } & 5,512 \\\text { Wages Payable } & 12,880\end{array}$ What is the amount of the current ratio? (Round your answer to 2 decimal places. )

Match the term with its definition.(There are more definitions than terms. ) -dr

A company receives $100,000 cash from investors in exchange for stock.Several weeks later,the company buys a $250,000 machine using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

A company's trial balance included the following account balances: $\begin{array}{lr}\text { Accounts Payable } & 19,207 \\\text { Accounts Receivable } & 81,336 \\\text { Cash } & 73,324 \\\text { Income Tax Payable } & 3,512 \\\text { Inventory } & 25,816 \\\text { Note Payable, due in two years } & 1,709 \\\text { Equipment } & 54,128 \\\text { Stockholders'Equity } & 202,808 \\\text { Supplies } & 5,512 \\\text { Wages Payable } & 12,880\end{array}$ What is the amount of Total Liabilities on the Balance Sheet?

Journal entries show the effects of transactions on the elements of the accounting equation,as well as the account balances.

A difference between debt financing and equity financing is that:

A business can obtain financing by issuing stock or borrowing from third parties,such as banks.What are the balance sheet effects of issuing stock to obtain cash?

Which of the following is an asset?

Which of the following statements about transaction analysis is correct?

Which of the following statements about the debit/credit framework is correct?

Match each account name with the category that it would be included under in a classified balance sheet. -Accounts Payable

Your company places an order for inventory with suppliers for delivery in two weeks.

Match each account name with the category that it would be included under in a classified balance sheet. -Accounts Receivable

The acquisition of inventory in an exchange for a company's stock would increase the current ratio of the company.

A company uses $100,000 in cash to pay off $100,000 in notes payable.This would result in a:

Grizzly Co.enters into the following transactions: Stockholders contribute $25,000 cash to a company in exchange for common stock. The company purchases $12,500 of new equipment in exchange for its promise to pay $12,500 at the end of next month. The company pays $7,500 to suppliers on account. Required: Part a.Show the effect of these transactions on the basic accounting equation. Part b.Prepare the journal entries that would be used to record the transactions.