Exam 2: Accounting for Business Transactions

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

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 posting process is the link between the _______________ and the _____________.

The business paid $100 cash dividend to Charles Nice (the sole stockholder of the corporation). Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Dividends paid to the stockholders are a business expense.

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

A dividend normally has a debit balance.

A double-entry accounting system is an accounting system:

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

The _______________________ is a record containing all accounts used by a company as well as the transactions and ending balances of each of the accounts.

The debt ratio is calculated by dividing total assets by total liabilities.

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0. Based on this information, an investor can conclude:

If a company provides services to a customer on credit, the company providing the service should credit Accounts Receivable.

A business's record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is known as a(n):

Geraldine Parker, the owner of Gi Gi's Dance Studio, Inc., started the business by investing $10,000 cash and donating a building worth $20,000. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Prepaid expenses are generally:

The first step in the processing of a transaction is to analyze the transaction and source documents.

Grills R Us Catering provided $1,000 of catering services and billed its client for the amount owed. Given the choices below, determine the general journal entry that Grills R Us Catering will make to record this transaction.

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

Indicate on which of the financial statements the following items appears. Use I for income statement, E for statement of retained earnings, and B for balance sheet. More than one statement may be appropriate for some items. a. Fees Earned b. Cash c. Unearned Revenue d. Rent expense e. Retained Earnings f. Notes Payable g. Prepaid Rent h. Salaries Expense i. Notes Payable j. Dividends