Question 1

Which of the following statements is incorrect?

Accepted Answer

A) Higher financial leverage involves higher risk. 
B) Risk is higher if a company has more liabilities. 
C) Risk is higher if a company has higher assets. 
D) The debt ratio is one measure of financial risk. 
E) Lower financial leverage involves lower risk. 
A) Higher financial leverage involves higher risk. 
B) Risk is higher if a company has more liabilities. 
C) Risk is higher if a company has higher assets. 
D) The debt ratio is one measure of financial risk. 
E) Lower financial leverage involves lower risk.

Question 2

A company has total liabilities of $550 million and total equity of $300 million.Calculate this company's debt ratio.

Accepted Answer

A) 64.7% 
B) 100% 
C) 54.5% 
D) 1.83 to 1 
E) The debt ratio cannot be determined without additional information. 
A) 64.7% 
B) 100% 
C) 54.5% 
D) 1.83 to 1 
E) The debt ratio cannot be determined without additional information.

Question 3

FastForward purchased $25,000 of equipment for cash.The Equipment asset account is _______________ for $25,000 and the cash account is _______________ for $25,000.

Accepted Answer

The answer of FastForward purchased $25,000 of equipment for cash.The...

Question 4

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

Accepted Answer

A) True 
 B)False

Question 5

The heading on each financial statement lists the three W's - Who (the name of the organization), What (the name of the statement), and Where (the organization's address)

Accepted Answer

A) True 
 B)False

Question 6

The Fireside Country Inn is a very popular destination for tourists.The Inn requires guests to make reservations at least two months in advance of their stay.A 20 percent down payment is required at the time the reservation is made.When should this inn recognize room rental revenue?

Accepted Answer

A) On the date the reservation is received. 
B) On the date the money for the reservation is received. 
C) On the date the guests stay in the inn. 
D) On the date the guests pay the remaining 80 percent due. 
E) Once all cash has been received. 
A) On the date the reservation is received. 
B) On the date the money for the reservation is received. 
C) On the date the guests stay in the inn. 
D) On the date the guests pay the remaining 80 percent due. 
E) Once all cash has been received.

Question 7

What are the total assets shown on the trial balance below?

Accepted Answer

A) $291,340 
B) $106,962 
C) $198,730 
D) $218,730 
E) $221,580 
A) $291,340 
B) $106,962 
C) $198,730 
D) $218,730 
E) $221,580

Question 8

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:
 $\begin{array}{|l|r|r|}
\hline & \text { Assets } & \text { Liabilities } \
\hline \text { Beginning of the year } & \$ 114,000 & \$ 68,000 \
\hline \text { End of the year } & 135,000 & 73,000 \
\hline
\end{array}$ If the owners made no investments and dividends of $5,000 were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year?

Accepted Answer

Beginning owner's equity = $114,000 - $6

Question 9

A revenue account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 10

If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100.

Accepted Answer

A) True 
 B)False

Question 11

A written promise to pay a definite sum of money on a specific future date is a(n):

Accepted Answer

A) Unearned revenue 
B) Prepaid expense 
C) Credit account 
D) Note payable 
E) Account receivable 
A) Unearned revenue 
B) Prepaid expense 
C) Credit account 
D) Note payable 
E) Account receivable

Question 12

On February 5, Textron Stores purchased a van that had a cost of $35,000.The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance.Show the general journal entry to record this transaction.

Accepted Answer

@#IMG-DLM&_TB6311_00

Question 13

Leonard Matson completed these transactions during December of the current year:
   Prepare general journal entries to record these transactions.

Accepted Answer

@#IMG-DLM&_TB6311_00

Question 14

Maria Sanchez began business as Sanchez Law Firm on November 1.Record the following November transactions by making entries directly to the T-accounts provided.Then, prepare a trial balance, as of November 30.
a.Sanchez invested $15,000 cash and a law library valued at $6,000 in exchange for common stock.
b.Purchased $7,500 of office equipment from Johnson Bros.on credit.
c.Completed legal work for a client and received $1,500 cash in full payment.
d.Paid Johnson Bros.$3,500 cash in partial settlement of the amount owed.
e.Completed $4,000 of legal work for a client on credit.
f.Paid a $2,000 cash dividend.
g.Received $2,500 cash as partial payment for the legal work completed for the client in (e).
h.Paid $2,500 cash for the legal secretary's salary.

Accepted Answer

@#IMG-DLM&_TB6311_00_TB6311_00_TB6311_00 
@#IMG-DLM&_TB6311_

Question 15

In which of the following situations would the trial balance not balance?

Accepted Answer

A) A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash. 
B) The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable. 
C) A $50 cash receipt for the performance of a service was not recorded at all. 
D) The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200. 
E) The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750. 
A) A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash. 
B) The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable. 
C) A $50 cash receipt for the performance of a service was not recorded at all. 
D) The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200. 
E) The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750.

Question 16

A compound journal entry affects no more than two accounts.

Accepted Answer

A) True 
 B)False

Question 17

_____________________________ requires that the impact of each transaction be recorded in at least two accounts.It also means that total amounts debited must equal total amounts credited for each transaction.

Accepted Answer

Double-ent

Question 18

On October 31, a company's Cash account had a normal balance of $7,000.During October, the account was debited for a total of $4,250 and credited for a total of $5,340.What was the balance in the Cash account at the beginning of October?

Accepted Answer

A) $0 balance 
B) $1,090 debit balance 
C) $2,590 credit balance 
D) $8,090 debit balance 
E) $9,590 credit balance 
A) $0 balance 
B) $1,090 debit balance 
C) $2,590 credit balance 
D) $8,090 debit balance 
E) $9,590 credit balance

Question 19

A ___________________________ gives a complete record of each transaction in one place and shows debits and credits for each transaction.

Accepted Answer

general jo

Question 20

Which of the following is the appropriate journal entry if a company performs a service and then bills the customer?

Accepted Answer

A) Debit to Cash, debit to Service Revenue. 
B) Debit to Cash, credit to Service Revenue. 
C) Debit to Accounts Receivable, credit to Cash. 
D) Debit to Service Revenue, credit to Accounts Receivable. 
E) Debit to Accounts Receivable, credit to Service Revenue. 
A) Debit to Cash, debit to Service Revenue. 
B) Debit to Cash, credit to Service Revenue. 
C) Debit to Accounts Receivable, credit to Cash. 
D) Debit to Service Revenue, credit to Accounts Receivable. 
E) Debit to Accounts Receivable, credit to Service Revenue.

Which of the following statements is incorrect?

A company has total liabilities of $550 million and total equity of $300 million.Calculate this company's debt ratio.

FastForward purchased $25,000 of equipment for cash.The Equipment asset account is _ for $25,000 and the cash account is _ for $25,000.

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

The heading on each financial statement lists the three W's - Who (the name of the organization), What (the name of the statement), and Where (the organization's address)

The Fireside Country Inn is a very popular destination for tourists.The Inn requires guests to make reservations at least two months in advance of their stay.A 20 percent down payment is required at the time the reservation is made.When should this inn recognize room rental revenue?

What are the total assets shown on the trial balance below?

A revenue account normally has a debit balance.

If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100.

A written promise to pay a definite sum of money on a specific future date is a(n):

On February 5, Textron Stores purchased a van that had a cost of $35,000.The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance.Show the general journal entry to record this transaction.

Leonard Matson completed these transactions during December of the current year: Prepare general journal entries to record these transactions.

In which of the following situations would the trial balance not balance?

A compound journal entry affects no more than two accounts.

_____________________________ requires that the impact of each transaction be recorded in at least two accounts.It also means that total amounts debited must equal total amounts credited for each transaction.

On October 31, a company's Cash account had a normal balance of $7,000.During October, the account was debited for a total of $4,250 and credited for a total of $5,340.What was the balance in the Cash account at the beginning of October?

A ___________________________ gives a complete record of each transaction in one place and shows debits and credits for each transaction.

Which of the following is the appropriate journal entry if a company performs a service and then bills the customer?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Time Value of Money

Accounting for Partnerships

Filters

Exam 15: Basic Accounting for Transactions

Which of the following statements is incorrect?

A company has total liabilities of $550 million and total equity of $300 million.Calculate this company's debt ratio.

FastForward purchased $25,000 of equipment for cash.The Equipment asset account is _______________ for $25,000 and the cash account is _______________ for $25,000.

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

The heading on each financial statement lists the three W's - Who (the name of the organization), What (the name of the statement), and Where (the organization's address)

The Fireside Country Inn is a very popular destination for tourists.The Inn requires guests to make reservations at least two months in advance of their stay.A 20 percent down payment is required at the time the reservation is made.When should this inn recognize room rental revenue?

What are the total assets shown on the trial balance below?

A revenue account normally has a debit balance.

If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100.

A written promise to pay a definite sum of money on a specific future date is a(n):

On February 5, Textron Stores purchased a van that had a cost of $35,000.The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance.Show the general journal entry to record this transaction.

Leonard Matson completed these transactions during December of the current year: Prepare general journal entries to record these transactions.

In which of the following situations would the trial balance not balance?

A compound journal entry affects no more than two accounts.

_____________________________ requires that the impact of each transaction be recorded in at least two accounts.It also means that total amounts debited must equal total amounts credited for each transaction.

On October 31, a company's Cash account had a normal balance of $7,000.During October, the account was debited for a total of $4,250 and credited for a total of $5,340.What was the balance in the Cash account at the beginning of October?

A ___________________________ gives a complete record of each transaction in one place and shows debits and credits for each transaction.

Which of the following is the appropriate journal entry if a company performs a service and then bills the customer?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Time Value of Money

Accounting for Partnerships

Filters

FastForward purchased $25,000 of equipment for cash.The Equipment asset account is _ for $25,000 and the cash account is _ for $25,000.