Question 1

Stride Along had total liabilities of $130 million and total assets of $375 million. Its debt ratio was ______________.

Accepted Answer

$130 million/$375 million = 347%

Question 2

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

Accepted Answer

A)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $4,700. 
B)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700. 
C)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400. 
D)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400. 
E)  The total of the Debit column of the trial balance will equal the total of the Credit column. 
A)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $4,700. 
B)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700. 
C)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400. 
D)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400. 
E)  The total of the Debit column of the trial balance will equal the total of the Credit column. C

Question 3

Accounts are normally decreased by debits.

Accepted Answer

A) True 
 B)False  False

Question 4

The following are all of the accounts of Flaherty Company that have a balance at the end of August. All accounts have normal balances:
a. Calculate net income.
b. Determine the amount of owner's equity to be shown on the August 31 balance sheet.

Accepted Answer

The answer of The following are all of the accounts...

Question 5

Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of owner's equity, and a balance sheet. Sal made no additional investments in the company during the year.

Accepted Answer

@#IMG-DLM& Sal's Beauty Shop
S

Question 6

Identify whether a debit or credit yields the indicated change for each of the following accounts.

Accepted Answer

The answer of Identify whether a debit or credit yields...

Question 7

Transactions are first recorded in the ledger.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

The answer of A ___________________________ gives a complete record of...

Question 9

Which of the following statements is incorrect?

Accepted Answer

A)  The normal balance of accounts receivable is a debit. 
B)  The normal balance of owner's withdrawals is a debit. 
C)  The normal balance of unearned revenues is a credit. 
D)  The normal balance of an expense account is a credit. 
E)  The normal balance of the owner's capital account is a credit. 
A)  The normal balance of accounts receivable is a debit. 
B)  The normal balance of owner's withdrawals is a debit. 
C)  The normal balance of unearned revenues is a credit. 
D)  The normal balance of an expense account is a credit. 
E)  The normal balance of the owner's capital account is a credit.

Question 10

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

Accepted Answer

The debt ratio is calculated by dividing

Question 11

Unearned revenues are:

Accepted Answer

A)  Revenues that have been earned and received in cash. 
B)  Revenues that have been earned but not yet collected in cash. 
C)  Liabilities created when a customer pays in advance for products or services before the revenue is earned. 
D)  Recorded as an asset in the accounting records. 
E)  Increases to owners' capital. 
A)  Revenues that have been earned and received in cash. 
B)  Revenues that have been earned but not yet collected in cash. 
C)  Liabilities created when a customer pays in advance for products or services before the revenue is earned. 
D)  Recorded as an asset in the accounting records. 
E)  Increases to owners' capital.

Question 12

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

Accepted Answer

The answer of The posting process is the link between...

Question 13

A ledger is:

Accepted Answer

A)  A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item. 
B)  A journal in which transactions are first recorded. 
C)  A collection of documents that describe transactions and events entering the accounting process. 
D)  A list of all accounts with their debit balances at a point in time. 
E)  A record containing all accounts and their balances used by a company. 
A)  A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item. 
B)  A journal in which transactions are first recorded. 
C)  A collection of documents that describe transactions and events entering the accounting process. 
D)  A list of all accounts with their debit balances at a point in time. 
E)  A record containing all accounts and their balances used by a company.

Question 14

An account used to record the owner's investments in the business is called a(n):

Accepted Answer

A)  Withdrawals account. 
B)  Capital account. 
C)  Revenue account. 
D)  Expense account. 
E)  Liability account. 
A)  Withdrawals account. 
B)  Capital account. 
C)  Revenue account. 
D)  Expense account. 
E)  Liability account.

Question 15

A customer's promise to pay is called an account payable to the seller.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is correct?

Accepted Answer

A)  When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense. 
B)  Promises of future payment are called accounts receivable. 
C)  Increases and decreases in cash are always recorded in the owner's capital account. 
D)  An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. 
E)  Accrued liabilities include accounts receivable. 
A)  When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense. 
B)  Promises of future payment are called accounts receivable. 
C)  Increases and decreases in cash are always recorded in the owner's capital account. 
D)  An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. 
E)  Accrued liabilities include accounts receivable.

Question 17

Cash withdrawn by the owner of a proprietorship should be treated as an expense of the business.

Accepted Answer

A) True 
 B)False

Question 18

The numbering system used in a company's chart of accounts:

Accepted Answer

A)  Is the same for all companies. 
B)  Is determined by generally accepted accounting principles. 
C)  Depends on the source documents used in the accounting process. 
D)  Typically begins with balance sheet accounts. 
E)  Typically begins with income statement accounts. 
A)  Is the same for all companies. 
B)  Is determined by generally accepted accounting principles. 
C)  Depends on the source documents used in the accounting process. 
D)  Typically begins with balance sheet accounts. 
E)  Typically begins with income statement accounts.

Question 19

Debits increase asset and expense accounts.

Accepted Answer

A) True 
 B)False

Question 20

An owner's capital account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing and Recording Transactions

Stride Along had total liabilities of $130 million and total assets of $375 million. Its debt ratio was ______________.

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

Accounts are normally decreased by debits.

The following are all of the accounts of Flaherty Company that have a balance at the end of August. All accounts have normal balances: a. Calculate net income. b. Determine the amount of owner's equity to be shown on the August 31 balance sheet.

Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of owner's equity, and a balance sheet. Sal made no additional investments in the company during the year.

Identify whether a debit or credit yields the indicated change for each of the following accounts.

Transactions are first recorded in the ledger.

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

Which of the following statements is incorrect?

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

Unearned revenues are:

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

A ledger is:

An account used to record the owner's investments in the business is called a(n):

A customer's promise to pay is called an account payable to the seller.

Which of the following statements is correct?

Cash withdrawn by the owner of a proprietorship should be treated as an expense of the business.

The numbering system used in a company's chart of accounts:

Debits increase asset and expense accounts.

An owner's capital account normally has a debit balance.

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

The posting process is the link between the ___ and the .