Exam 2: Analyzing for Business Transactions

Based on the following trial balance for Sally's Salon,prepare an income statement,statement of retained earnings,and a balance sheet.Sally Crawford,the sole stockholder,made no additional investments in the company during the year. Sally's Salon Trial Balance December 31 Cash \ 6,500 Accounts receivable 475 Beauty supplies 2,500 Beauty shop equipment 17,00 Accounts payable \ 745 Common Stock 21,155 Dividends 36,000 Revenue earned 72,000 Beauty supplies expense 3,429 Rent expense 6,000 Wages expense 22,000 Totals \ 93,900 \ 93,900

A revenue account normally has a debit balance.

Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability (L), or equity (SE). -Fees Revenue

The steps in the accounting process focus on analyzing and recording financial transactions and events within a company.Those steps are shown below.Using the number system of 1 as the first step and 4 as the last step in the process,number the steps in the correct order in which they would occur (1 thru 4). _____ Record relevant transactions and events in a journal, _____ Post journal information to the ledger accounts _____ Prepare and analyze the trial balance _____ Analyzing each transaction

Match the following terms with the appropriate definition. -Double-entry accounting

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.

List the four steps in recording transactions.

Jerry's Butcher Shop had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year $114,000 $68,000 End of the year 135,000 73,000 If there were no stockholder investments in the business and no dividends paid during the year,what was the amount of net income earned by Jerry's Butcher Shop?

A record containing all the separate accounts for a company as well as all of their balances is called the________

A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):

All of the following statements accurately describe the debt ratio except.

Jackson Advertising Co.had assets of $475,000; liabilities of $275,500; and equity of $199,500.Calculate its debt ratio.

Asset accounts are decreased by debits.

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.

A business uses a credit to record:

A law firm billed a client $1,800 for work performed in the current month.Which of the following general journal entries will the firm make to record this transaction?

A credit is used to record an increase in all of the following accounts except:

Explain the debt ratio and its use in analyzing a company's financial condition.

Figgaro Company's accounts and their balances,as of the end of August,are included below.All accounts have normal balances: Accounts receivable \ 36,000 Cash \ 27,000 Equipment 59,000 Advertising expense 5,000 Service revernues earned 75,000 Accounts payable 31,000 Rent expense 3,600 Dividends 24,000 Office supplies 1,500 Salaries expense 30,000 Notes payable 22,000 Common Stock 58,100 a.Calculate net income. b.Determine the amount of total equity to be shown on the August 31 balance sheet.