Exam 2: Analyzing for Business Transactions

Richard Redden,the sole stockholder,contributed $70,000 in cash and land worth $130,000 in exchange for common stock to open a new business,RR Consulting.Which of the following general journal entries will RR Consulting make to record this transaction?

Jason Hope decided to open a hotel in his hometown.Prepare journal entries to record the following transactions.Hope uses the accounts Room Rental Revenue and Event Revenue.All expenses for special events are recorded as Event Expense.(Omit explanations.)

At the beginning of the current year,Trenton Company's total assets were $248,000 and its total liabilities were $175,000.During the year,the company reported total revenues of $93,000,total expenses of $76,000 and dividends of $5,000.There were no other changes in equity during the year and total assets at the end of the year were $260,000.Trenton Company's debt ratio at the end of the current year is:

The general journal is known as the book of final entry because financial statements are prepared from it.

The record of all accounts and their balances used by a business is called a:

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

Smiles Entertainment had the following accounts and balances at December 31: Account Debit Credit Cash \ 10,000 Accounts Receivable 2,000 Prepaid Insurance 2,400 Supplies 1,000 Accounts Payable \ 5,000 Common Stock 4,000 Retained Earnings 900 Service Revenue 7,000 Salaries Expense 500 Utilities Expense 1,000 Totals \ 16,900 \ 16,900 Using the information in the table,calculate the company's reported net income for the period.

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

A transaction that credits an asset account and credits a liability account must also affect one or more other accounts.

A business's source documents may include all of the following except:

Match the following terms with the appropriate definition. -Chart of accounts

Identify the account below that is classified as an asset account:

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

Identify the statement below that is true.

The right side of an account is called the debit side.

Crediting an expense account decreases it.

Match the following terms with the appropriate definition. -Debt ratio

An asset created by prepayment of an insurance premium is:

The journal is known as a book of original entry.

A $130 credit to Supplies was credited to Fees Earned by mistake.By what amounts are the accounts under- or overstated as a result of this error?