Question 1

An asset created by prepayment of an insurance expense is:

Accepted Answer

A) Recorded as a debit to Unearned Revenue. 
B) Recorded as a debit to Prepaid Insurance. 
C) Recorded as a credit to Unearned Revenue. 
D) Recorded as a credit to Prepaid Insurance. 
E) Not recorded in the accounting records until the insurance period expires. 
A) Recorded as a debit to Unearned Revenue. 
B) Recorded as a debit to Prepaid Insurance. 
C) Recorded as a credit to Unearned Revenue. 
D) Recorded as a credit to Prepaid Insurance. 
E) Not recorded in the accounting records until the insurance period expires.

Question 2

To increase an asset account we would _______________ it and to increase a liability account,we would ______________ it.
Answers need to appear in the order shown above.

Accepted Answer

The answer of To increase an asset account we would...

Question 3

The record 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. 
A) Journal. 
B) Book of original entry. 
C) General Journal. 
D) Balance column journal. 
E) Ledger.

Question 4

A business paid $100 cash to Charles Nice (the owner of the business)for his 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 Charles...

Question 5

Joe Jackson opened Jackson's Repairs on March 1 of the current year.During March,the following transactions occurred and were recorded in the company's books: 1.Jackson invested $25,000 cash in the business.
2)Jackson 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)Jackson withdrew $5,000 for his personal use from the company.
Based on this information,net income for March would be:

Accepted Answer

A) $10,300. 
B) $13,400. 
C) $5,300. 
D) $8,400. 
E) $13,500. 
A) $10,300. 
B) $13,400. 
C) $5,300. 
D) $8,400. 
E) $13,500.

Question 6

_____________ and ______________ are the starting points for the analyzing and recording process.
Answers can appear in either order.

Accepted Answer

Business t

Question 7

The purchase of land and buildings will generally be recorded in the same ledger account.

Accepted Answer

A) True 
 B)False

Question 8

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 9

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

Accepted Answer

A) Account balance column. 
B) Debit column. 
C) Posting reference column. 
D) Credit column. 
E) Description column. 
A) Account balance column. 
B) Debit column. 
C) Posting reference column. 
D) Credit column. 
E) Description column.

Question 10

Items such as sales tickets,bank statements,checks,and purchase orders are examples of a business's source documents.

Accepted Answer

A) True 
 B)False

Question 11

In a double-entry accounting system,the total dollar amount debited must always equal the total dollar amount credited.

Accepted Answer

A) True 
 B)False

Question 12

The right side of an account is called the debit side.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

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

Question 14

A more structured format that is similar to a T-account in that it has columns for debits and credits,but that is different in that it has columns for transaction date,explanation,and the account balance is the _____________________.

Accepted Answer

balance co

Question 15

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?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 16

The higher a company's debt ratio,the lower the risk of a company not being able to meet its obligations.

Accepted Answer

A) True 
 B)False

Question 17

The _____________________ is found by determining the difference between total debits and total credits for an account,including any beginning balance.

Accepted Answer

The answer of The _____________________ is found by determining the...

Question 18

Identify the account used by businesses to record the transfer of assets from a business to its owner for personal use:

Accepted Answer

A) A revenue account. 
B) The owner's withdrawals account. 
C) The owner's capital account. 
D) An expense account. 
E) A liability account. 
A) A revenue account. 
B) The owner's withdrawals account. 
C) The owner's capital account. 
D) An expense account. 
E) A liability account.

Question 19

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

Question 20

At the beginning of the current year,Trenton Company's total assets were $248,000 and its total liabilities were $175,000.During the year,the company reported total revenues of $93,000,total expenses of $76,000 and owner withdrawals of $5,000.There were no other changes in owner's capital during the year and total assets at the end of the year were $260,000.Trenton Company's debt ratio at the end of the current year is:

Accepted Answer

A) 70.6%. 
B) 67.3%. 
C) 32.7%. 
D) 48.6%. 
E) 1.42%. 
A) 70.6%. 
B) 67.3%. 
C) 32.7%. 
D) 48.6%. 
E) 1.42%.

Exam 2: Analyzing and Recording Transactions

An asset created by prepayment of an insurance expense is:

To increase an asset account we would _______________ it and to increase a liability account,we would ______________ it. Answers need to appear in the order shown above.

The record of all accounts and their balances used by a business is called a:

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

_____________ and ______________ are the starting points for the analyzing and recording process. Answers can appear in either order.

The purchase of land and buildings will generally be recorded in the same ledger account.

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.

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

Items such as sales tickets,bank statements,checks,and purchase orders are examples of a business's source documents.

In a double-entry accounting system,the total dollar amount debited must always equal the total dollar amount credited.

The right side of an account is called the debit side.

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

A more structured format that is similar to a T-account in that it has columns for debits and credits,but that is different in that it has columns for transaction date,explanation,and the account balance is the _____________________.

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?

The higher a company's debt ratio,the lower the risk of a company not being able to meet its obligations.

The _____________________ is found by determining the difference between total debits and total credits for an account,including any beginning balance.

Identify the account used by businesses to record the transfer of assets from a business to its owner for personal use:

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

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

To increase an asset account we would _ it and to increase a liability account,we would it. Answers need to appear in the order shown above.

_ and __ are the starting points for the analyzing and recording process. Answers can appear in either order.