Question 1

Explain the recording and posting processes.

Accepted Answer

Information from business transactions a

Question 2

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 invested an additional $12,000 in the business 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 3

Which of the following statements about the Cash account are true?

Accepted Answer

A)  Because most companies earn their fees in cash, the Cash account is categorized as revenue. 
B)  For any given transaction, Accounts Receivable and Cash can be used interchangeably because both accounts are measured in terms of cash. 
C)  The Cash account includes the value of any medium of exchange that a bank accepts for deposit. 
D)  Cash is the same thing as Retained Earnings. 
E)  Cash is a liability account. 
A)  Because most companies earn their fees in cash, the Cash account is categorized as revenue. 
B)  For any given transaction, Accounts Receivable and Cash can be used interchangeably because both accounts are measured in terms of cash. 
C)  The Cash account includes the value of any medium of exchange that a bank accepts for deposit. 
D)  Cash is the same thing as Retained Earnings. 
E)  Cash is a liability account.

Question 4

The difference between total debits and total credits for an account,including any beginning balance,is the ________________________.

Accepted Answer

The answer of The difference between total debits and total...

Question 5

Krenz Car Care,which is owned and operated by Karl Krenz,began business as a corporation in September of the current year.Karl,a master mechanic,had no experience with keeping a set of books.As a result,Karl entered all of September's transactions directly to the ledger accounts.When he tried to locate a particular entry he found it to be confusing and time consuming.He has hired you to improve his accounting procedures.The accounts in his general ledger are as follows:
   
Prepare the general journal entries,in chronological order (a)through (e),from the T-account entries shown.Include a brief description of the probable nature of each transaction.

Accepted Answer

None

Question 6

Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.

Accepted Answer

The answer of Unearned revenue is classified as _______________ that...

Question 7

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 8

The four categories of equity accounts are _____________________,__________________,______________________ and ______________________.

Accepted Answer

common sto

Question 9

What is another name for the general journal?

Accepted Answer

A)  The book. 
B)  The ledger. 
C)  The book of original entry. 
D)  The record. 
E)  The account book. 
A)  The book. 
B)  The ledger. 
C)  The book of original entry. 
D)  The record. 
E)  The account book.

Question 10

A debit is used to record:

Accepted Answer

A)  A decrease in an asset account. 
B)  A decrease in an expense account. 
C)  An increase in a revenue account. 
D)  An increase in the balance of common stock. 
E)  A decrease in the balance of retained earnings. 
A)  A decrease in an asset account. 
B)  A decrease in an expense account. 
C)  An increase in a revenue account. 
D)  An increase in the balance of common stock. 
E)  A decrease in the balance of retained earnings.

Question 11

The following is a list of accounts and identification letters A through J for Shannon Management Co.:
 $\begin{array}{|l|l|l|l|}
\hline \text { A. } & \text { Common Stock } & \text { F. } & \text { Prepaid Rent } \
\hline \text { B. } & \text { Interest Payable } & \text { G. } & \text { Advertising Expense } \
\hline \text { C. } & \text { Land } & \text { H. } & \text { Unearned Rent Revenue } \
\hline \text { D. } & \text { Dividends } & \text { I. } & \text { Commissions Earned } \
\hline \text { E. } & \text { Fees Earned } & \text { J. } & \text { Notes Receivable } \
\hline
\end{array}$
 
Use the form below to identify the type of account and its normal balance.The first item is filled in as an example.

Accepted Answer

@#IMG-DLM&_TB6312_00

Question 12

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Accepted Answer

A) True 
 B)False

Question 13

The chart of accounts is a list of all the accounts used by a company and a corresponding identification number.

Accepted Answer

A) True 
 B)False

Question 14

A $15 credit to Sales was posted as a $150 credit.By what amount is Sales in error?

Accepted Answer

A)  $150 understated 
B)  $135 overstated 
C)  $150 overstated 
D)  $15 understated 
E)  $135 understated 
A)  $150 understated 
B)  $135 overstated 
C)  $150 overstated 
D)  $15 understated 
E)  $135 understated

Question 15

A debit entry is always favorable.

Accepted Answer

A) True 
 B)False

Question 16

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 17

If a company is highly leveraged,this means that it has relatively low risk of not being able to repay its debt.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements are true?

Accepted Answer

A)  If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions. 
B)  The trial balance is a book of original entry. 
C)  Another name for trial balance is chart of accounts. 
D)  The trial balance is a list of all accounts from the ledger with their balances at a point in time. 
E)  The trial balance is another name for the balance sheet as long as debits balance with credits. 
A)  If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions. 
B)  The trial balance is a book of original entry. 
C)  Another name for trial balance is chart of accounts. 
D)  The trial balance is a list of all accounts from the ledger with their balances at a point in time. 
E)  The trial balance is another name for the balance sheet as long as debits balance with credits.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

If a company provides services to a customer on credit,the service provider company should credit Accounts Receivable.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing and Recording Transactions

Explain the recording and posting processes.

Which of the following statements about the Cash account are true?

The difference between total debits and total credits for an account,including any beginning balance,is the ________________________.

Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.

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 four categories of equity accounts are _____________________,__________________,______________________ and ______________________.

What is another name for the general journal?

A debit is used to record:

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

The chart of accounts is a list of all the accounts used by a company and a corresponding identification number.

A $15 credit to Sales was posted as a $150 credit.By what amount is Sales in error?

A debit entry is always favorable.

Which of the following statements is incorrect?

If a company is highly leveraged,this means that it has relatively low risk of not being able to repay its debt.

Which of the following statements are true?

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

If a company provides services to a customer on credit,the service provider company should credit Accounts Receivable.

Introducing Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Accounting With Special Journals

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Filters

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