Question 1

Identify the account below that impacts the Equity of a business:

Accepted Answer

A) Utilities Expense 
B) Accounts Payable 
C) Accounts Receivable 
D) Cash 
E) Unearned Revenue 
A) Utilities Expense 
B) Accounts Payable 
C) Accounts Receivable 
D) Cash 
E) Unearned Revenue

Question 2

Pippa's Paralegal Services completed these transactions in February:
a.Purchased office supplies on account,$300.
b.Completed work for a client on credit,$500.
c.Paid cash for the office supplies purchased in (a).
d.Completed work for a client and received $800 cash.
e.Received $500 cash for the work described in (b).
f.Received $1,000 from a client for paralegal services to be performed in March.
Prepare journal entries to record the above transactions.Explanations are not necessary.

Accepted Answer

The answer of Pippa's Paralegal Services completed these transactions in...

Question 3

The numbering system used in a company's chart of accounts:

Accepted Answer

A) Is the same for all companies. 
B) Is determined by generally accepted accounting principles. 
C) Depends on the source documents used in the accounting process. 
D) Typically begins with balance sheet accounts. 
E) Typically begins with income statement accounts. 
A) Is the same for all companies. 
B) Is determined by generally accepted accounting principles. 
C) Depends on the source documents used in the accounting process. 
D) Typically begins with balance sheet accounts. 
E) Typically begins with income statement accounts.

Question 4

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of BBB Company sends a $2,500 invoice to...

Question 5

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. 
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.

Question 6

_________________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

Accepted Answer

The answer of _________________ documents identify and describe transactions and...

Question 7

Wiley Hill opened Hill's Repairs on March 1 of the current year.During March,the following transactions occurred and were recorded in the company's books: 1.Wiley invested $25,000 cash in the business.
2)Wiley contributed $100,000 of equipment to the business.
3)The company paid $2,000 cash to rent office space for the month.
4)The company received $16,000 cash for repair services provided during March.
5)The company paid $6,200 for salaries for the month.
6)The company provided $3,000 of services to customers on account.
7)The company paid cash of $500 for monthly utilities.
8)The company received $3,100 cash in advance of providing repair services to a customer.
9)Wiley withdrew $5,000 for his personal use from the company.
Based on this information,the balance in Wiley Hill,Capital reported on the Statement of Owner's Equity at the end of March would be:

Accepted Answer

A) $133,400. 
B) $130,300. 
C) $125,300. 
D) $8,400. 
E) $13,500. 
A) $133,400. 
B) $130,300. 
C) $125,300. 
D) $8,400. 
E) $13,500.

Question 8

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

Accepted Answer

A) Cash 
B) Accounts Payable 
C) Salaries Expense 
D) J.Jackson,Capital 
E) Equipment 
A) Cash 
B) Accounts Payable 
C) Salaries Expense 
D) J.Jackson,Capital 
E) Equipment

Question 9

Credits always increase account balances.

Accepted Answer

A) True 
 B)False

Question 10

You decrease the Accounts Payable account on the ___________ side of its account.

Accepted Answer

The answer of You decrease the Accounts Payable account on...

Question 11

Given the following errors,identify the one by itself that will cause the trial balance to be out of balance.

Accepted Answer

A) A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense. 
B) A $100 cash receipt from a customer in payment of her account posted as a $100 debit to Cash and a $10 credit to Accounts Receivable. 
C) A $75 cash receipt from a customer in payment of her account posted as a $75 debit to Cash and a $75 credit to Cash. 
D) A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash. 
E) An $800 prepayment from a customer for services to be rendered in the future was posted as an $800 debit to Unearned Revenue and an $800 credit to Cash. 
A) A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense. 
B) A $100 cash receipt from a customer in payment of her account posted as a $100 debit to Cash and a $10 credit to Accounts Receivable. 
C) A $75 cash receipt from a customer in payment of her account posted as a $75 debit to Cash and a $75 credit to Cash. 
D) A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash. 
E) An $800 prepayment from a customer for services to be rendered in the future was posted as an $800 debit to Unearned Revenue and an $800 credit to Cash.

Question 12

A business's general journal provides a place for recording all of the following except:

Accepted Answer

A) The transaction date. 
B) The names of the accounts involved. 
C) The amount of each debit and credit. 
D) An explanation of the transaction. 
E) The balance in each account. 
A) The transaction date. 
B) The names of the accounts involved. 
C) The amount of each debit and credit. 
D) An explanation of the transaction. 
E) The balance in each account.

Question 13

George Butler owned a tugboat and was tired of his current job.He decided to open a business that provides day tugboat tours to tourists along the Mississippi River near his hometown.Prepare journal entries to record the following transactions.

Accepted Answer

The answer of George Butler owned a tugboat and was...

Question 14

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 15

A business's source documents:

Accepted Answer

A) include the ledger. 
B) Provide objective evidence that a transaction has taken place. 
C) must be in electronic form. 
D) are prepared internally to ensure accuracy. 
E) include the chart of accounts. 
A) include the ledger. 
B) Provide objective evidence that a transaction has taken place. 
C) must be in electronic form. 
D) are prepared internally to ensure accuracy. 
E) include the chart of accounts.

Question 16

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Accepted Answer

A) True 
 B)False

Question 17

The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpful to both its owners and creditors.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

The four categories of equity accounts are ________________,__________________,______________________,and ______________________.
Answers can appear in any order.

Accepted Answer

owner,capi

Question 20

Lu Lu's Catering has a debt ratio equal to .3 and its competitor,Able's Bakery,has a debt ratio equal to .7.Determine the statement below that is correct.

Accepted Answer

A) Able's Bakery has a smaller percentage of its assets financed with liabilities as compared to Lu Lu's. 
B) Able's Bakery's financial leverage is less than Lu Lu's. 
C) Able's Bakery's financial leverage is greater than Lu Lu's. 
D) Lu Lu's has a higher risk from its financial leverage. 
E) Higher financial leverage involves lower risk. 
A) Able's Bakery has a smaller percentage of its assets financed with liabilities as compared to Lu Lu's. 
B) Able's Bakery's financial leverage is less than Lu Lu's. 
C) Able's Bakery's financial leverage is greater than Lu Lu's. 
D) Lu Lu's has a higher risk from its financial leverage. 
E) Higher financial leverage involves lower risk.

Exam 2: Analyzing and Recording Transactions

Identify the account below that impacts the Equity of a business:

The numbering system used in a company's chart of accounts:

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Prepaid expenses are generally:

_________________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

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

Credits always increase account balances.

You decrease the Accounts Payable account on the ___________ side of its account.

Given the following errors,identify the one by itself that will cause the trial balance to be out of balance.

A business's general journal provides a place for recording all of the following except:

George Butler owned a tugboat and was tired of his current job.He decided to open a business that provides day tugboat tours to tourists along the Mississippi River near his hometown.Prepare journal entries to record the following transactions.

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.

A business's source documents:

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpful to both its owners and creditors.

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

The four categories of equity accounts are ________________,__________________,______________________,and ______________________. Answers can appear in any order.

Lu Lu's Catering has a debt ratio equal to .3 and its competitor,Able's Bakery,has a debt ratio equal to .7.Determine the statement below that is correct.

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

Filters

The four categories of equity accounts are ,,,and ______. Answers can appear in any order.