Question 1

Explain debits and credits and their role in the accounting system.

Accepted Answer

Debit refers to the left side of an acco

Question 2

Wisconsin Rentals purchased office supplies on credit.The general journal entry made by Wisconsin Rentals will include a:

Accepted Answer

A) Debit to Accounts Payable. 
B) Debit to Accounts Receivable. 
C) Credit to Cash. 
D) Credit to Accounts Payable. 
E) Credit to Wisconsin Rentals, Capital. 
A) Debit to Accounts Payable. 
B) Debit to Accounts Receivable. 
C) Credit to Cash. 
D) Credit to Accounts Payable. 
E) Credit to Wisconsin Rentals, Capital.

Question 3

Identify each of the following accounts as a revenue (R),expense (E),asset (A),liability (L),or equity (OE)by placing initials (R,E,A,L or OE)in the blanks.
____ 1.Salary Expense
____ 2.Cash
____ 3.Equipment
____ 4.Owner,Capital
____ 5.Fees Revenue
____ 6.Accounts Receivable
____ 7.Accounts Payable
____ 8.Owner,Withdrawals
____ 9.Supplies
____ 10.Unearned Fee Revenue
____ 11.Prepaid Insurance
____ 12.Office Furniture

Accepted Answer

1.E; 2.A; 3.A; 4.OE;

Question 4

A debit is used to record:

Accepted Answer

A) A decrease in an asset account. 
B) A decrease in an expense account. 
C) An increase in a revenue account. 
D) An increase in the balance of an owner's capital account. 
E) An increase in the balance of the owner's withdrawals account. 
A) A decrease in an asset account. 
B) A decrease in an expense account. 
C) An increase in a revenue account. 
D) An increase in the balance of an owner's capital account. 
E) An increase in the balance of the owner's withdrawals account.

Question 5

Rocky Industries received its telephone bill in the amount of $300,and immediately paid it.Rocky's general journal entry to record this transaction will include a

Accepted Answer

A) Debit to Telephone Expense for $300. 
B) Credit to Accounts Payable for $300. 
C) Debit to Cash for $300. 
D) Credit to Telephone Expense for $300. 
E) Debit to Accounts Payable for $300. 
A) Debit to Telephone Expense for $300. 
B) Credit to Accounts Payable for $300. 
C) Debit to Cash for $300. 
D) Credit to Telephone Expense for $300. 
E) Debit to Accounts Payable for $300.

Question 6

A 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 with their debit balances at a point in time. 
E) A record containing all accounts and their balances used by a company. 
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 with their debit balances at a point in time. 
E) A record containing all accounts and their balances used by a company.

Question 7

Source documents:

Accepted Answer

A) Include the ledger. 
B) Are the sources of accounting information. 
C) Must be in electronic form. 
D) Are based on accounting entries. 
E) Include the chart of accounts. 
A) Include the ledger. 
B) Are the sources of accounting information. 
C) Must be in electronic form. 
D) Are based on accounting entries. 
E) Include the chart of accounts.

Question 8

A list of all accounts and the identification number assigned to each account used by a company is called a:

Accepted Answer

A) Source document. 
B) Journal. 
C) Trial balance. 
D) Chart of accounts. 
E) General Journal. 
A) Source document. 
B) Journal. 
C) Trial balance. 
D) Chart of accounts. 
E) General Journal.

Question 9

The third step in the analyzing and recording process is to post the information to ___________________.

Accepted Answer

The answer of The third step in the analyzing and...

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Cash withdrawn by the owner of a proprietorship should be treated as an expense of the business.

Accepted Answer

A) True 
 B)False

Question 12

While in the process of posting from the journal to the ledger a company failed to post a $500 debit to the Office Supplies account.The effect of this error will be that:

Accepted Answer

A) The Office Supplies account balance will be overstated. 
B) The trial balance will not balance. 
C) The error will overstate the debits listed in the journal. 
D) The total debits in the trial balance will be larger than the total credits. 
E) The error will overstate the credits listed in the journal. 
A) The Office Supplies account balance will be overstated. 
B) The trial balance will not balance. 
C) The error will overstate the debits listed in the journal. 
D) The total debits in the trial balance will be larger than the total credits. 
E) The error will overstate the credits listed in the journal.

Question 13

All of the following are asset accounts except:

Accepted Answer

A) Accounts Receivable. 
B) Buildings. 
C) Supplies expense. 
D) Cash. 
E) Prepaid insurance. 
A) Accounts Receivable. 
B) Buildings. 
C) Supplies expense. 
D) Cash. 
E) Prepaid insurance.

Question 14

The following are all of the accounts of Flaherty Company that have a balance at the end of August.All accounts have normal balances:
   a.Calculate net income.
b.Determine the amount of owner's equity to be shown on the August 31 balance sheet.

Accepted Answer

A.$75,000 Service revenues earned
(3,600

Question 15

The _______________________ is a record containing all accounts used by a company.

Accepted Answer

either an

Question 16

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. 
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.

Question 17

For each of the following errors,indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit)will have the larger total as a result of the error.
a.$100 debit to Cash was debited to the Cash account twice.
b.$1,900 credit to Sales was posted as a $190 credit.
c.$5,000 debit to Office Equipment was debited to Office Supplies.
d.$625 debit to Prepaid Insurance was posted as a $62.50 debit.
e.$520 credit to Accounts Payable was not posted.

Accepted Answer

The answer of For each of the following errors,indicate on...

Question 18

Explain the debt ratio and its use in analyzing a company's financial condition.

Accepted Answer

The debt ratio is calculated by dividing

Question 19

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. 
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.

Question 20

On December 3,the Matador Company paid $5,400 cash in salaries to office personnel.Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of On December 3,the Matador Company paid $5,400...

Exam 2: Analyzing and Recording Transactions

Explain debits and credits and their role in the accounting system.

Wisconsin Rentals purchased office supplies on credit.The general journal entry made by Wisconsin Rentals will include a:

A debit is used to record:

Rocky Industries received its telephone bill in the amount of $300,and immediately paid it.Rocky's general journal entry to record this transaction will include a

A ledger is:

Source documents:

A list of all accounts and the identification number assigned to each account used by a company is called a:

The third step in the analyzing and recording process is to post the information to ___________________.

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

Cash withdrawn by the owner of a proprietorship should be treated as an expense of the business.

While in the process of posting from the journal to the ledger a company failed to post a $500 debit to the Office Supplies account.The effect of this error will be that:

All of the following are asset accounts except:

The following are all of the accounts of Flaherty Company that have a balance at the end of August.All accounts have normal balances: a.Calculate net income. b.Determine the amount of owner's equity to be shown on the August 31 balance sheet.

The _______________________ is a record containing all accounts used by a company.

The accounting process begins with:

Explain the debt ratio and its use in analyzing a company's financial condition.

Which of the following statements is correct?

On December 3,the Matador Company paid $5,400 cash in salaries to office personnel.Prepare the general journal entry to record this transaction.

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

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 Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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