Question 1

Explain debits and credits and their role in the accounting system of a business.

Accepted Answer

Debit refers to the left side of an acco...

Question 2

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 3

Gi Gi's Bakery has total assets of $425 million.Its total liabilities are $110 million.Its equity is $315 million.Calculate the debt ratio.

Accepted Answer

A)   38.6%.
B)   13.4%.
C)   34.9%.
D)   25.9%.
E)   14.9%.F) A) and B)
G) A) and C)

Question 4

The ordering of accounts in a trial balance typically follows their identification number from the chart of accounts,that is,assets first,then liabilities,then common stock and dividends,followed by revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 5

Indicate on which of the financial statements the following items appears.Use I for income statement,RE for statement of retained earnings,and B for balance sheet.More than one statement may be appropriate for some items.
 $$\begin{array} { | l | l | } 
\hline \text { a.Fees Earned } &\quad\quad\quad\quad\quad\quad \
\hline \text { b. Cash } & \
\hline \text { c. Unearned Revenue } & \
\hline \text { d. Rent expense } & \
\hline \text { e. Owner, Capital } & \
\hline \text { f. Notes Payable } & \
\hline \text {g. Prepaid Rent } & \
\hline \text { h.Salaries Expense } & \
\hline \text { i. Notes Payable }\
\hline \text {j.Owner, Withdrawal } & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | c | }
\hline \t...

Question 6

Stockholder investments always decrease equity.

Accepted Answer

A) True 
 B)False

Question 7

Identify the following accounts as appearing on either the Income Statement (IS)  or Balance Sheet (BS) .
-Rent Expense

Accepted Answer

A)  BS
B)  ISC) A) and B)
D) undefined

Question 8

Identify the following accounts as appearing on either the Income Statement (IS)  or Balance Sheet (BS) .
-Cash

Accepted Answer

A)  BS
B)  ISC) A) and B)
D) undefined

Question 9

Andrea Apple opened Apple Photography on January 1 of the current year.During January,the following transactions occurred and were recorded in the company's books:
Andrea invested $13,500 cash in the business in exchange for common stock.
Andrea contributed $20,000 of photography equipment to the business in exchange for common stock.
The company paid $2,100 cash for an insurance policy covering the next 24 months.
The company received $5,700 cash for services provided during January.
The company purchased $6,200 of office equipment on credit.
The company provided $2,750 of services to customers on account.
The company paid cash of $1,500 for monthly rent.
The company paid $3,100 on the office equipment purchased in transaction #5 above.
Paid $275 cash for January utilities.
Based on this information,the amount of total stockholders' equity reported on the Balance Sheet at the end of the month would be:

Accepted Answer

A)   $31,400.
B)   $39,200.
C)   $31,150.
D)   $40,175.
E)   $30,875.F) C) and D)
G) B) and E)

Question 10

Identify the account below that is classified as a liability account:

Accepted Answer

A)   Cash
B)   Accounts Payable
C)   Salaries Expense
D)   Common Stock
E)   EquipmentF) C) and E)
G) None of the above

Question 11

A company's ledger is:

Accepted Answer

A)   A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item.
B)   A journal in which transactions are first recorded.
C)   A collection of documents that describe transactions and events entering the accounting process.
D)   A list of all accounts a company uses with an assigned identification number.
E)   A record containing all accounts and their balances used by the company.F) B) and C)
G) A) and D)

Question 12

The following transactions occurred during July:
Received $900 cash for services provided to a customer during July.
Received $2,200 cash investment from Bob Johnson,the owner of the business.
Received $750 from a customer in partial payment of his account receivable which arose from sales in June.
Provided services to a customer on credit,$375.
Borrowed $6,000 from the bank by signing a promissory note.
Received $1,250 cash from a customer for services to be rendered next year.
What was the amount of revenue for July?

Accepted Answer

A)   $ 900.
B)   $ 1,275.
C)   $ 2,525.
D)   $ 3,275.
E)   $ 11,100.F) A) and D)
G) C) and D)

Question 13

Jerry's Butcher Shop had the following assets and liabilities at the beginning and end of the current year:
 $$\begin{array} { l l l } 
& \text { Assets } & \text { Liabilities } \
\text { Beginning of the year } & \$ 114,000 & \$ 68,000 \
\text { End of the year } & 135,000 & 73,000
\end{array}$$ 
If stockholders invested an additional $12,000 in the business in exchange for common stock and $5,000 of dividends were paid during the year,what was the amount of net income earned by Jerry's Butcher Shop?

Accepted Answer

Beginning equity = $114,000 - ...

Question 14

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) .
-Unearned Revenue

Accepted Answer

A)  L
B)  SE
C)  R
D)  E
E)  A  F) C) and D)
G) B) and E)

Question 15

Unearned revenues refer to a(n) :

Accepted Answer

A)   Asset that will be used over time.
B)   Expense incurred because a customer has paid in advance.
C)   Liability that is settled in the future when a company delivers its products or services.
D)   Increase in revenues as a result of delivering products or services to a customer.
E)   Decrease in an asset.F) A) and B)
G) A) and C)

Question 16

A debit is used to record an increase in all of the following accounts except:

Accepted Answer

A)   Supplies
B)   Cash
C)   Accounts Payable
D)   Dividends
E)   Prepaid InsuranceF) D) and E)
G) A) and B)

Question 17

At the end of its first month of operations,Michael's Consulting Services reported net income of $25,000.They also had account balances of: Cash,$18,000; Office Supplies,$2,000 and Accounts Receivable $10,000.The sole stockholder's total investment in exchange for common stock for this first month was $5,000.There were no dividends in the first month.
Calculate the amount of total equity to be reported on the balance sheet at the end of the month.

Accepted Answer

A)   $30,000
B)   $25,000
C)   $20,000
D)   $5,000
E)   $7,000F) D) and E)
G) All of the above

Question 18

Unearned revenues are classified as liabilities.

Accepted Answer

A) True 
 B)False

Question 19

The detail of individual revenue and expense accounts is reported on the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 20

Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately.Which of the following general journal entries will Wiley Consulting make to record this transaction? Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.

Accepted Answer

A)     Accounts Payable 7,000 Supplies 7,000\begin{array} { | l | r | r | } \hline 	ext { Accounts Payable } & 7,000 & \\hline 	ext { Supplies } & & 7,000 \\hline\end{array} Accounts Payable  Supplies ​7,000​7,000​​ 
B)     Cash 7,000 Supplies 7,000\begin{array} { | l | r | r | } \hline 	ext { Cash } & 7,000 & \\hline 	ext { Supplies } & & 7,000 \\hline\end{array} Cash  Supplies ​7,000​7,000​​ 
C)     Supplies 7,000 Cash 7,000\begin{array} { | l | r | l | } \hline 	ext { Supplies } & 7,000 & \\hline 	ext { Cash } & & 7,000 \\hline\end{array} Supplies  Cash ​7,000​7,000​​ 
D)     Supplies 7,000 Accounts Payable 7,000\begin{array} { | l | r | l | } \hline 	ext { Supplies } & 7,000 & \\hline 	ext { Accounts Payable } & & 7,000 \\hline\end{array} Supplies  Accounts Payable ​7,000​7,000​​ 
E)     Supplies Expense 7,000 Accounts Payable 7,000\begin{array} { | l | r | l | } \hline 	ext { Supplies Expense } & 7,000 & \\hline 	ext { Accounts Payable } & & 7,000 \\hline\end{array} Supplies Expense  Accounts Payable ​7,000​7,000​​F) A) and B)
G) B) and D)

Exam 2: Analyzing for Business Transactions

Stockholder investments always decrease equity.

Correct Answer
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Gi Gi's Bakery has total assets of $425 million.Its total liabilities are $110 million.Its equity is $315 million.Calculate the debt ratio.

Correct Answer
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Unearned revenues are classified as liabilities.

Correct Answer
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Correct Answer
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Correct Answer
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Beginning equity = $114,000 - ...
View Answer

A debit is used to record an increase in all of the following accounts except:

Correct Answer
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Correct Answer
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A company's ledger is:

Correct Answer
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Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) . -Unearned Revenue

Correct Answer
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Explain debits and credits and their role in the accounting system of a business.

Correct Answer
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Debit refers to the left side of an acco...
View Answer

Identify the following accounts as appearing on either the Income Statement (IS) or Balance Sheet (BS) . -Cash

Correct Answer
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Identify the account below that is classified as a liability account:

Correct Answer
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Correct Answer
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\[\begin{array} { | l | c | }
\hline \t...
View Answer

Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately.Which of the following general journal entries will Wiley Consulting make to record this transaction? Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.

Correct Answer
verified

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.

Correct Answer
verified

Correct Answer
verified

Unearned revenues refer to a(n) :

Correct Answer
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Identify the following accounts as appearing on either the Income Statement (IS) or Balance Sheet (BS) . -Rent Expense

Correct Answer
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The detail of individual revenue and expense accounts is reported on the statement of retained earnings.

Correct Answer
verified

The ordering of accounts in a trial balance typically follows their identification number from the chart of accounts,that is,assets first,then liabilities,then common stock and dividends,followed by revenues and expenses.

Correct Answer
verified

Exam 2: Analyzing for Business Transactions

Stockholder investments always decrease equity.

Correct AnswerverifiedShow Answer

Gi Gi's Bakery has total assets of $425 million.Its total liabilities are $110 million.Its equity is $315 million.Calculate the debt ratio.

Correct AnswerverifiedShow Answer

Unearned revenues are classified as liabilities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedBeginning equity = $114,000 - ...View AnswerShow Answer

A debit is used to record an increase in all of the following accounts except:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A company's ledger is:

Correct AnswerverifiedShow Answer

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) . -Unearned Revenue

Correct AnswerverifiedShow Answer

Explain debits and credits and their role in the accounting system of a business.

Correct AnswerverifiedDebit refers to the left side of an acco...View AnswerShow Answer

Identify the following accounts as appearing on either the Income Statement (IS) or Balance Sheet (BS) . -Cash

Correct AnswerverifiedShow Answer

Identify the account below that is classified as a liability account:

Correct AnswerverifiedShow Answer

Correct Answerverified\[\begin{array} { | l | c | } \hline \t...View AnswerShow Answer

Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately.Which of the following general journal entries will Wiley Consulting make to record this transaction? Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Unearned revenues refer to a(n) :

Correct AnswerverifiedShow Answer

Identify the following accounts as appearing on either the Income Statement (IS) or Balance Sheet (BS) . -Rent Expense

Correct AnswerverifiedShow Answer

The detail of individual revenue and expense accounts is reported on the statement of retained earnings.

Correct AnswerverifiedShow Answer

The ordering of accounts in a trial balance typically follows their identification number from the chart of accounts,that is,assets first,then liabilities,then common stock and dividends,followed by revenues and expenses.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Beginning equity = $114,000 - ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Debit refers to the left side of an acco...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
verified
\[\begin{array} { | l | c | }
\hline \t...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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