Exam 15: Analyzing for Business Transactions

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

Prepaid accounts (also called prepaid expenses) are generally:

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.

The same four basic financial statements are prepared by both U.S. GAAP and IFRS.

A credit entry:

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Dividends paid to stockholders are a business expense.

Gi Gi's Dance Studio provided $150 of dance instruction and rented out its dance studio to the same client for another $100. The client paid immediately. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Indicate whether a debit or credit entry would be required to record the following changes in each account. a. To decrease Cash b. To increase Common Stock c. To decrease Accounts Payable. d. To increase Salaries Expense. e. To decrease Supplies. f. To increase Revenue. g. To decrease Accounts Receivable. h. To increase Dividends.

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

On a trial balance, if the Debit and Credit column totals are equal, then:

At a given point in time, a business's trial balance is a list of all of its general ledger accounts and their balances.

Larry Bar opened a frame shop and completed these transactions: 1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock. 2) Purchased $70 of office supplies on credit. 3) Paid $1,200 cash for the receptionist's salary. 4) Sold a custom frame service and collected $1,500 cash on the sale. 5) Completed framing services and billed the client $200. What was the balance of the cash account after these transactions were posted?

Crediting an expense account decreases it.

List the steps in processing transactions.

The heading on every financial statement lists the three W's-Who (the name of the business); What (the name of the statement); and Where (the organization's address).

To increase an asset account, we would ________ it and to increase a liability account, we would________ it.

ABC Company made a $2,500 payment on account, to satisfy a previously recorded account payable. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

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.

Golddigger Services, Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a: