Question 1

The accounting process begins with:

Accepted Answer

A)   Analysis of business transactions and source documents.
B)   Preparing financial statements and other reports.
C)   Summarizing the recorded effect of business transactions.
D)   Presentation of financial information to decision-makers.
E)   Preparation of the trial balance.F) A) and B)
G) A) and C)

Question 2

Which of the following statements is correct?

Accepted Answer

A)   The left side of a T-account is the credit side.
B)   Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts.
C)   The left side of a T-account is the debit side.
D)   Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts.
E)   In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction.F) C) and D)
G) A) and D)

Question 3

Which of the following statements is incorrect?

Accepted Answer

A)   The normal balance of accounts receivable is a debit.
B)   The normal balance of owner's withdrawals is a debit.
C)   The normal balance of unearned revenues is a credit.
D)   The normal balance of an expense account is a credit.
E)   The normal balance of the owner's capital account is a credit.F) A) and D)
G) B) and E)

Question 4

Stride Along 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%.F) A) and B)
G) All of the above

Question 5

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

Accepted Answer

A) True 
 B)False

Question 6

During the month of March, Cooley Computer Services made purchases on account totaling $43,500. Also during the month of March, Cooley was paid $8,000 by a customer for services to be provided in the future and paid $36,900 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $77,300, what is the balance in accounts payable at the end of March?

Accepted Answer

A)   $83,900.
B)   $91,900.
C)   $6,600.
D)   $75,900.
E)   $4,900.F) B) and E)
G) C) and D)

Question 7

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:  If Josephine made no investments in the business but withdrew $5,000 during the year, what was the amount of net income earned by Josephine's Bakery?

Accepted Answer

The answer of Josephine's Bakery had the following assets and...

Question 8

A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n) :

Accepted Answer

A)   Account balance.
B)   Trial balance.
C)   Ledger.
D)   Chart of accounts.
E)   General Journal.F) All of the above
G) A) and E)

Question 9

Indicate the financial statement on which each of the following items appears. Use I for income statement, E for statement of owner's equity, and B for balance sheet.

Accepted Answer

The answer of Indicate the financial statement on which each...

Question 10

On January 1 of the current year, Bob's Lawn Care Service reported owner's capital totaling $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year Bob withdrew $20,000 from the company. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, the change in owner's capital during the year was:

Accepted Answer

A)   A decrease of $9,500.
B)   An increase of $9,500.
C)   An increase of $30,500.
D)   A decrease of $30,500.
E)   Impossible to determine from the information provideD.During the year, revenues were $96,000 while expenses were $85,500 and withdrawals were $20,000. Since there were no other changes in equity, equity must have decreased by $9,500.F) A) and B)
G) C) and D)

Question 11

A business paid $100 cash to Karen Smith (the owner of the business) for her personal use. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of A business paid $100 cash to Karen...

Question 12

The posting process is the link between the _______________ and the ____________.

Accepted Answer

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

Question 13

A 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 14

Both U.S. GAAP and IFRS do not require the use of accrual basis accounting.

Accepted Answer

A) True 
 B)False

Question 15

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.F) D) and E)
G) A) and E)

Question 16

A collection of all accounts and their balances used by a business is called a:

Accepted Answer

A)   Journal.
B)   Book of original entry.
C)   General Journal.
D)   Balance column journal.
E)   Ledger.F) A) and E)
G) A) and B)

Question 17

The process of transferring general journal information to the ledger is:

Accepted Answer

A)   Double-entry accounting.
B)   Posting.
C)   Balancing an account.
D)   Journalizing.
E)   Not required unless debits do not equal credits.F) C) and D)
G) None of the above

Question 18

A credit is used to record:

Accepted Answer

A)   An increase in an expense account.
B)   A decrease in an asset account.
C)   A decrease in an unearned revenue account.
D)   A decrease in a revenue account.
E)   A decrease in a capital account.F) B) and D)
G) D) and E)

Question 19

The trial balance can serve as a replacement for the balance sheet, since debits must equal with credits.

Accepted Answer

A) True 
 B)False

Question 20

Robert Haddon contributed $70,000 in cash and land worth $130,000 to open a new business, RH Consulting. Which of the following general journal entries will RH Consulting make to record this transaction?

Accepted Answer

A)   Debit Assets $200,000; credit Haddon, Capital, $200,000.
B)   Debit Cash and Land, $200,000; credit Haddon, Capital, $200,000.
C)   Debit Cash $70,000; debit Land $130,000; credit Haddon, Capital, $200,000.
D)   Debit Haddon, Capital, $200,000; credit Cash $70,000, credit Land, $130,000.
E)   Debit Haddon, Capital, $200,000; credit Assets, $200,000.F) B) and C)
G) B) and E)

Exam 2: Analyzing and Recording Transactions

A credit is used to record:

Correct Answer
verified

Correct Answer
verified

A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n) :

Correct Answer
verified

Both U.S. GAAP and IFRS do not require the use of accrual basis accounting.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Which of the following statements is incorrect?

Correct Answer
verified

The process of transferring general journal information to the ledger is:

Correct Answer
verified

Robert Haddon contributed $70,000 in cash and land worth $130,000 to open a new business, RH Consulting. Which of the following general journal entries will RH Consulting make to record this transaction?

Correct Answer
verified

A business paid $100 cash to Karen Smith (the owner of the business) for her personal use. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Indicate the financial statement on which each of the following items appears. Use I for income statement, E for statement of owner's equity, and B for balance sheet.

Correct Answer
verified

The accounting process begins with:

Correct Answer
verified

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

Correct Answer
verified

A collection of all accounts and their balances used by a business is called a:

Correct Answer
verified

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

Correct Answer
verified

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

Correct Answer
verified

The trial balance can serve as a replacement for the balance sheet, since debits must equal with credits.

Correct Answer
verified

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: If Josephine made no investments in the business but withdrew $5,000 during the year, what was the amount of net income earned by Josephine's Bakery?

Correct Answer
verified

The debt ratio is used:

Correct Answer
verified

Exam 2: Analyzing and Recording Transactions

A credit is used to record:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n) :

Correct AnswerverifiedShow Answer

Both U.S. GAAP and IFRS do not require the use of accrual basis accounting.

Correct AnswerverifiedShow Answer

The posting process is the link between the _______________ and the ____________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

The process of transferring general journal information to the ledger is:

Correct AnswerverifiedShow Answer

Robert Haddon contributed $70,000 in cash and land worth $130,000 to open a new business, RH Consulting. Which of the following general journal entries will RH Consulting make to record this transaction?

Correct AnswerverifiedShow Answer

A business paid $100 cash to Karen Smith (the owner of the business) for her personal use. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Indicate the financial statement on which each of the following items appears. Use I for income statement, E for statement of owner's equity, and B for balance sheet.

Correct AnswerverifiedShow Answer

The accounting process begins with:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A collection of all accounts and their balances used by a business is called a:

Correct AnswerverifiedShow Answer

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The trial balance can serve as a replacement for the balance sheet, since debits must equal with credits.

Correct AnswerverifiedShow Answer

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: If Josephine made no investments in the business but withdrew $5,000 during the year, what was the amount of net income earned by Josephine's Bakery?

Correct AnswerverifiedShow Answer

The debt ratio is used:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified