Question 1

Dividends distributed to stockholders should be treated as an expense of the business.

Accepted Answer

A) True 
 B)False

Question 2

The right side of a T-account is a(n):

Accepted Answer

A)  Debit. 
B)  Increase. 
C)  Credit. 
D)  Decrease. 
E)  Account balance. 
A)  Debit. 
B)  Increase. 
C)  Credit. 
D)  Decrease. 
E)  Account balance.

Question 3

The balances for the accounts of Milo's Management Co.for the year ended December 31 are shown below.Each account shown had a normal balance.
 $$\begin{array} { | l | l | l | } 
\hline \text { Accounts Payable ..... } & \$ 6,500 &\text { Wages Expense ......... } & 36,000 \
\hline \text { Accounts Receivable... } & 7,000& \text { Rent Expense .......... } & 6,000 \
\hline \text { Cash ............... } & ? & \
\hline \text { Office Supplies. } & 1,200 & \
\hline \text { Building ............. } & 21,500& \text { Land .................. } & 50,000 \
\hline \text { Supplies Expense ...... } & 118,70& \text { Unearned Management Fees } & 4,000 \
\hline \text { Common Stock......... } & 175,00 &\text { Dividends } & 48,000 \
\hline
\end{array}$$

Accepted Answer

None

Question 4

The financial statement that summarizes the changes in the retained earnings account is called the balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

A debit:

Accepted Answer

A)  Always increases an account. 
B)  Is the right-hand side of a T-account. 
C)  Always decreases an account. 
D)  Is the left-hand side of a T-account. 
E)  Is not needed to record a transaction. 
A)  Always increases an account. 
B)  Is the right-hand side of a T-account. 
C)  Always decreases an account. 
D)  Is the left-hand side of a T-account. 
E)  Is not needed to record a transaction.

Question 6

Match the following terms with the appropriate definition.
-Credit

Accepted Answer

A) A record containing all accounts of a company and their balances. 
B) A written promise to pay a definite sum of money on a specified future date. 
C) The difference between total debits and total credits for an account including the beginning balance. 
D) An increase in an asset, dividend, and expense account, and a decrease in a liability, common stock, and revenue account; recorded on the left side of a T-account. 
E) A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances.
F)An account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
G)The ratio of total liabilities to total assets; used to reflect the risk associated with the company's debts.
H)A list of all accounts used by a company and the identification number assigned to each account.
I)A decrease in an asset, dividend, and expense account, and an increase in a liability, common stock, and revenue account; recorded on the right side of a T-account.
J)A chronological record of each transaction in one place that shows debits and credits for each transaction. 
A) A record containing all accounts of a company and their balances. 
B) A written promise to pay a definite sum of money on a specified future date. 
C) The difference between total debits and total credits for an account including the beginning balance. 
D) An increase in an asset, dividend, and expense account, and a decrease in a liability, common stock, and revenue account; recorded on the left side of a T-account. 
E) A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances.
F)An account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
G)The ratio of total liabilities to total assets; used to reflect the risk associated with the company's debts.
H)A list of all accounts used by a company and the identification number assigned to each account.
I)A decrease in an asset, dividend, and expense account, and an increase in a liability, common stock, and revenue account; recorded on the right side of a T-account.
J)A chronological record of each transaction in one place that shows debits and credits for each transaction.

Question 7

On February 5,Teddy's Catering purchased an oven that cost $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

\[\begin{array} { l l l } 
2 /

Question 8

Dividends are not reported on a business's income statement.

Accepted Answer

A) True 
 B)False

Question 9

Ralph Pine Consulting received its telephone bill in the amount of $300,and immediately paid it.Pine'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 10

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

Accepted Answer

A)  Accounts Payable; Cash; Supplies. 
B)  Unearned Revenue; Accounts Payable; Dividends. 
C)  Building; Prepaid Insurance; Supplies Expense. 
D)  Cash; Prepaid Insurance; Equipment. 
E)  Notes Payable; Cash; Dividends. 
A)  Accounts Payable; Cash; Supplies. 
B)  Unearned Revenue; Accounts Payable; Dividends. 
C)  Building; Prepaid Insurance; Supplies Expense. 
D)  Cash; Prepaid Insurance; Equipment. 
E)  Notes Payable; Cash; Dividends.

Question 11

________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

Accepted Answer

The answer of ________ documents identify and describe transactions and...

Question 12

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

Accepted Answer

A)  Dividends account. 
B)  Common Stock account. 
C)  Asset account. 
D)  T-account. 
E)  Balance column sheet. 
A)  Dividends account. 
B)  Common Stock account. 
C)  Asset account. 
D)  T-account. 
E)  Balance column sheet.

Question 13

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0.Based on this information,an investor can conclude:

Accepted Answer

A)  Billy's Catering finances a relatively lower portion of its assets with liabilities than Jackson's Shoes. 
B)  Billy's Catering has a lower risk from its financial leverage. 
C)  Jackson's Shoes has a higher risk from its financial leverage. 
D)  Billy's Catering has the exact same dollar amount of total liabilities and total assets. 
E)  Jackson's Shoes has less equity per dollar of assets than Billy's Catering. 
A)  Billy's Catering finances a relatively lower portion of its assets with liabilities than Jackson's Shoes. 
B)  Billy's Catering has a lower risk from its financial leverage. 
C)  Jackson's Shoes has a higher risk from its financial leverage. 
D)  Billy's Catering has the exact same dollar amount of total liabilities and total assets. 
E)  Jackson's Shoes has less equity per dollar of assets than Billy's Catering.

Question 14

Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability (L), or equity (SE).
-Review the transactions below and identify with an "X" those that would be posted as a credit in the ledger (The first one has been done for you):
__X_1.Salary Payable was increased.
____ 2.Cash was decreased
____ 3.Equipment was increased
____ 4.Common Stock was increased
____ 5.Salaries Expense was increased
____ 6.Accounts Receivable was decreased
____ 7.Unearned Revenue was increased
____ 8.Dividends was increased
____ 9.Supplies was increased
____ 10.Building was increased
____ 11.Utilities Expense was increased
____ 12.Service Revenue was increased
A)L
B)SE
C)R
D)E
E)A
  212) $\text { Salary Expense }$

Accepted Answer

__X_1.Salary Payable was increased.
__X

Question 15

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?

Accepted Answer

A)  $300. 
B)  $41,500. 
C)  $40,300. 
D)  $38,500. 
E)  $38,700. 
A)  $300. 
B)  $41,500. 
C)  $40,300. 
D)  $38,500. 
E)  $38,700.

Question 16

The higher a company's debt ratio,the lower the risk of a company not being able to meet its obligations.

Accepted Answer

A) True 
 B)False

Question 17

At the end of the current year,Leer Company reported total liabilities of $300,000 and total equity of $100,000.The company's debt ratio on the last year-end was:

Accepted Answer

A)  300%. 
B)  33.3%. 
C)  75.0%. 
D)  66.67%. 
E)  $400,000. 
A)  300%. 
B)  33.3%. 
C)  75.0%. 
D)  66.67%. 
E)  $400,000.

Question 18

The four categories of equity accounts are ________,________,________,and ________.

Accepted Answer

answers c

Question 19

The process of transferring general journal entry information to the ledger is called:

Accepted Answer

A)  Double-entry accounting. 
B)  Posting. 
C)  Balancing an account. 
D)  Journalizing. 
E)  Not required unless debits do not equal credits. 
A)  Double-entry accounting. 
B)  Posting. 
C)  Balancing an account. 
D)  Journalizing. 
E)  Not required unless debits do not equal credits.

Question 20

Bologna Lodging had the following accounts and balances as of December 31:
$\begin{array}{lrr}
\text {Account}&\text {Debit}&\text {Credit}\
\text { Cash } & \$ 20,000 \
\text { Accounts Receivable } & 2,000 \
\text { Salaries Expense } & 500\
\text { Accounts Pavable }&&\$ 4000\
\text { Lodging Revenue } & & 7,000 \
\text { Utilities Expense } & 500 & \
\text { Prepaid Insurance } & 1,400 & \
\text { Supplies } & 1,500 & \
\text { Common Stock } & & 10,000 \
\text { Retained Earnings } & &4,900 \
\text { Totals } & \$ 25,900 & \$ 2,9,900 \
\end{array}$
Using the information in the table,calculate the total assets reported on Bologna's balance sheet for the period.

Accepted Answer

A)  $ 24,900. 
B)  $ 25,400. 
C)  $ 22,500. 
D)  $ 25,900. 
E)  $ 23,400. 
A)  $ 24,900. 
B)  $ 25,400. 
C)  $ 22,500. 
D)  $ 25,900. 
E)  $ 23,400.

Dividends distributed to stockholders should be treated as an expense of the business.

The right side of a T-account is a(n):

The financial statement that summarizes the changes in the retained earnings account is called the balance sheet.

A debit:

Match the following terms with the appropriate definition. -Credit

On February 5,Teddy's Catering purchased an oven that cost $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.

Dividends are not reported on a business's income statement.

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

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0.Based on this information,an investor can conclude:

The higher a company's debt ratio,the lower the risk of a company not being able to meet its obligations.

At the end of the current year,Leer Company reported total liabilities of $300,000 and total equity of $100,000.The company's debt ratio on the last year-end was:

The four categories of equity accounts are ,,,and .

The process of transferring general journal entry information to the ledger is called:

Accounting in Business

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 2: Analyzing for Business Transactions

Dividends distributed to stockholders should be treated as an expense of the business.

The right side of a T-account is a(n):

The financial statement that summarizes the changes in the retained earnings account is called the balance sheet.

A debit:

Match the following terms with the appropriate definition. -Credit

On February 5,Teddy's Catering purchased an oven that cost $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.

Dividends are not reported on a business's income statement.

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

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0.Based on this information,an investor can conclude:

The higher a company's debt ratio,the lower the risk of a company not being able to meet its obligations.

At the end of the current year,Leer Company reported total liabilities of $300,000 and total equity of $100,000.The company's debt ratio on the last year-end was:

The four categories of equity accounts are ________,________,________,and ________.

The process of transferring general journal entry information to the ledger is called:

Accounting in Business

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

Filters

The four categories of equity accounts are ,,,and .