Exam 2: Analyzing and Recording Transactions

During the month of March, Cooley Computer Services made purchases on account totaling $43,500. Also during the month of March, Cooley was paid $8,000 by a customer for services to be provided in the future and paid $36,900 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $77,300, what is the balance in accounts payable at the end of March?

The trial balance can serve as a replacement for the balance sheet, since debits must equal with credits.

A collection of all accounts and their balances used by a business is called a:

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

The posting process is the link between the _______________ and the ____________.

On January 1 of the current year, Bob's Lawn Care Service reported owner's capital totaling $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year Bob withdrew $20,000 from the company. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, the change in owner's capital during the year was:

A credit is used to record:

Stride Along has total assets of $385 million. Its total liabilities are $100 million and its equity is $285 million. Calculate its debt ratio.

The debt ratio is used:

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

Indicate the financial statement on which each of the following items appears. Use I for income statement, E for statement of owner's equity, and B for balance sheet.

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: If Josephine made no investments in the business but withdrew $5,000 during the year, what was the amount of net income earned by Josephine's Bakery?

Both U.S. GAAP and IFRS do not require the use of accrual basis accounting.

Which of the following statements is correct?

A business paid $100 cash to Karen Smith (the owner of the business) for her personal use. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

The accounting process begins with:

Which of the following statements is incorrect?

Robert Haddon contributed $70,000 in cash and land worth $130,000 to open a new business, RH Consulting. Which of the following general journal entries will RH Consulting make to record this transaction?

A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n):

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