Question 1

The debt ratio shows the proportion of assets financed with debt.

Accepted Answer

A) True 
 B)False

Question 2

A business purchases equipment for $8,000 cash. Which of the following accounts will be debited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Sandra, Capital 
D)  Equipment 
A)  Cash 
B)  Accounts Payable 
C)  Sandra, Capital 
D)  Equipment

Question 3

The owner of a business withdrew cash for personal use. Which of the following accounts will be credited?

Accepted Answer

A)  Smith, Capital 
B)  Smith, Withdrawals 
C)  Cash 
D)  Accounts Payable 
A)  Smith, Capital 
B)  Smith, Withdrawals 
C)  Cash 
D)  Accounts Payable

Question 4

For Owner's Capital, the category of account and its normal balance is:

Accepted Answer

A)  equity and a credit balance. 
B)  assets and a debit balance. 
C)  equity and a debit balance. 
D)  assets and a credit balance. 
A)  equity and a credit balance. 
B)  assets and a debit balance. 
C)  equity and a debit balance. 
D)  assets and a credit balance.

Question 5

The process of transferring data from the ledger to the journal is called posting.

Accepted Answer

A) True 
 B)False

Question 6

A business pays $500 cash for office supplies. Which of the following accounts will be debited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Utilities Expense 
A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Utilities Expense

Question 7

Journalizing a transaction involves:

Accepted Answer

A)  calculating the balance in an account using journal entries. 
B)  posting the account balances in the chart of accounts. 
C)  preparing a summary of account balances. 
D)  recording the data only in the journal. 
A)  calculating the balance in an account using journal entries. 
B)  posting the account balances in the chart of accounts. 
C)  preparing a summary of account balances. 
D)  recording the data only in the journal.

Question 8

Which of the following is the correct formula to calculate the debt ratio?

Accepted Answer

A)  Debt ratio = Total liabilities × Total assets 
B)  Debt ratio = Total liabilities + Total assets 
C)  Debt ratio = Total liabilities - Total assets 
D)  Debt ratio = Total liabilities ÷ Total assets 
A)  Debt ratio = Total liabilities × Total assets 
B)  Debt ratio = Total liabilities + Total assets 
C)  Debt ratio = Total liabilities - Total assets 
D)  Debt ratio = Total liabilities ÷ Total assets

Question 9

The following transactions for the month of March have been journalized and posted to the proper accounts. Mar. I Martinez invested $\$ 9,000$ cash in his new design services business.
Mar. 2 Paid the first month 5 rent of \$800.
Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $5,000.
Mar. 4 Purchased office supplies for $\$ 750$ cash.
Mar. 5 Eilled a client for $\$ 10,000$ of design services completed.
Mar. 6 Received $8,000 on account for the services previously recorded.
-According to the above transactions.What is the balance in Cash?

Accepted Answer

A)  $13,250 
B)  $12,450 
C)  $15,450 
D)  $14,000 
A)  $13,250 
B)  $12,450 
C)  $15,450 
D)  $14,000

Question 10

A business makes a cash payment of $12,000 to a supplier. Which of the following accounts will be debited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Bank 
D)  Accounts Receivable 
A)  Cash 
B)  Accounts Payable 
C)  Bank 
D)  Accounts Receivable

Question 11

Which of the following details is provided in a typical chart of accounts?

Accepted Answer

A)  account balance 
B)  account number 
C)  dates of transactions 
D)  transaction amounts 
A)  account balance 
B)  account number 
C)  dates of transactions 
D)  transaction amounts

Question 12

Which of the following is a source document that provides the evidence and data for accounting transactions?

Accepted Answer

A)  Journal 
B)  Sales invoice 
C)  Ledger 
D)  Trial balance 
A)  Journal 
B)  Sales invoice 
C)  Ledger 
D)  Trial balance

Question 13

The trial balance is one of the three basic financial statements that are issued to external stakeholders of the business.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following sequences states the order in which a trial balance lists accounts?

Accepted Answer

A)  Equity → Assets → Liabilities 
B)  Liabilities → Assets → Equity 
C)  Assets → Equity → Liabilities 
D)  Assets → Liabilities → Equity 
A)  Equity → Assets → Liabilities 
B)  Liabilities → Assets → Equity 
C)  Assets → Equity → Liabilities 
D)  Assets → Liabilities → Equity

Question 15

A journal entry under the double-entry system includes both debit and credit amounts.

Accepted Answer

A) True 
 B)False

Question 16

A liability account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 17

A business repays the amount borrowed on a note payable by cash. Which of the following accounts will be credited?

Accepted Answer

A)  Accounts Payable 
B)  Cash 
C)  Notes Payable 
D)  Notes Receivable 
A)  Accounts Payable 
B)  Cash 
C)  Notes Payable 
D)  Notes Receivable

Question 18

The following transactions for the month of March have been journalized and posted to the proper accounts.
Mar. I Martinez invested $\$ 9,000$ cash in his new design services business.
Mar. 2 Paid the first month 5 rent of \$800.
Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $5,000.
Mar. 4 Purchased office supplies for $\$ 750$ cash.
Mar. 5 Eilled a client for $\$ 10,000$ of design services completed.
Mar. 6 Received $8,000 on account for the services previously recorded.
-According to the above transactions.What is the balance in Accounts Receivable? 
A) $8,000
B) $2,000
C) $5,000
D) $10,000

Accepted Answer

The answer of The following transactions for the month of...

Question 19

Calculate the debt ratio using the following trial balance of Carol Instruments as of December 31, 2015.

Accepted Answer

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Question 20

In a trial balance, total debits must always equal to total credits.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

The debt ratio shows the proportion of assets financed with debt.

A business purchases equipment for $8,000 cash. Which of the following accounts will be debited?

The owner of a business withdrew cash for personal use. Which of the following accounts will be credited?

For Owner's Capital, the category of account and its normal balance is:

The process of transferring data from the ledger to the journal is called posting.

A business pays $500 cash for office supplies. Which of the following accounts will be debited?

Journalizing a transaction involves:

Which of the following is the correct formula to calculate the debt ratio?

A business makes a cash payment of $12,000 to a supplier. Which of the following accounts will be debited?

Which of the following details is provided in a typical chart of accounts?

Which of the following is a source document that provides the evidence and data for accounting transactions?

The trial balance is one of the three basic financial statements that are issued to external stakeholders of the business.

Which of the following sequences states the order in which a trial balance lists accounts?

A journal entry under the double-entry system includes both debit and credit amounts.

A liability account is increased by a debit.

A business repays the amount borrowed on a note payable by cash. Which of the following accounts will be credited?

Calculate the debt ratio using the following trial balance of Carol Instruments as of December 31, 2015.

In a trial balance, total debits must always equal to total credits.

Accounting and the Business Environment

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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