Question 1

A business's record of the increases and decreases in a specific asset,liability,equity,revenue,or expense is known as a(n):

Accepted Answer

A) Journal. 
B) Posting. 
C) Trial balance. 
D) Account. 
E) Chart of accounts.

Question 2

___________________ are promises of payment from customers to sellers.

Accepted Answer

The answer of ___________________ are promises of payment from customers...

Question 3

The chronological record of each complete transaction that has occurred is called the:

Accepted Answer

A) Account balance. 
B) Ledger. 
C) Journal. 
D) Trial balance. 
E) Cash account.

Question 4

A business uses a credit to record:

Accepted Answer

A) An increase in an expense account. 
B) A decrease in an asset account. 
C) A decrease in an unearned revenue account. 
D) A decrease in a revenue account. 
E) A decrease in a capital account.

Question 5

A transaction that credits an asset account and credits a liability account must also affect one or more other accounts.

Accepted Answer

A) True 
 B)False

Question 6

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.

Question 7

The debt ratio is calculated by dividing total assets by total liabilities.

Accepted Answer

A) True 
 B)False

Question 8

The heading on every financial statement lists the three W's-Who (the name of the business);What (the name of the statement);and Where (the organization's address).

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

The answer of A record containing all the separate accounts...

Question 10

Jackson Consulting had the following accounts and balances at December 31:  Using the information in the table,calculate Jackson Consulting's reported net income for the period.

Accepted Answer

A) $16,800 
B) $15,800. 
C) $15,300 
D) $10,300. 
E) $32,000

Question 11

Identify by marking an X in the appropriate column,whether each of the following items would likely serve as a source document.The first one is done as an example.

Accepted Answer

The answer of Identify by marking an X in the...

Question 12

Jarrod Automotive,owned and operated by Jarrod Johnson,began business in September of the current year.Jarrod,a mechanic,had no experience with recording business transactions.As a result,Jarrod entered all of September's transactions directly into the ledger accounts.When he tried to locate a particular entry he found it confusing and time consuming.He has hired you to improve his accounting procedures.The accounts in his General Ledger follow:    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

The answer of Jarrod Automotive,owned and operated by Jarrod Johnson,began...

Question 13

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

Accepted Answer

A) 35.1%. 
B) 26.0%. 
C) 38.5%. 
D) 28.5%. 
E) 58.8%.

Question 14

A transaction that decreases a liability and increases an asset must also affect one or more other accounts.

Accepted Answer

A) True 
 B)False

Question 15

Jason Hope decided to open a hotel in his hometown.Prepare journal entries to record the following transactions.Hope uses the accounts Room Rental Revenue and Event Revenue.All expenses for special events are recorded as Event Expense.

Accepted Answer

The answer of Jason Hope decided to open a hotel...

Question 16

The debt ratio is used:

Accepted Answer

A) To measure the ratio of equity to expenses. 
B) To assess the risk associated with a company's use of liabilities. 
C) Only by banks when a business applies for a loan. 
D) To determine how much debt a firm should pay off. 
E) To determine how much debt a company should borrow.

Question 17

Unearned revenue is classified as a(an)_______________ on a business's balance sheet.

Accepted Answer

The answer of Unearned revenue is classified as a(an)_______________ on...

Question 18

If Taylor Willow,the owner of Willow Hardware proprietorship,uses cash of the business to purchase a family automobile,the business should record this use of cash with an entry to:

Accepted Answer

A) Debit Salary Expense and credit Cash. 
B) Debit Cash and credit Salary Expense. 
C) Debit Cash and credit T.Willow,Withdrawals. 
D) Debit T.Willow,Withdrawals and credit Cash. 
E) Debit Automobiles and credit Cash.

Question 19

Mary Martin,the owner of Martin Consulting,started the business by investing $40,000 cash.Identify the general journal entry below that Martin Consulting will make to record the transaction.

Accepted Answer

A)   
B)   
C)   
D)

Question 20

A debit entry is always an increase in the account.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing and Recording Transactions

A business's record of the increases and decreases in a specific asset,liability,equity,revenue,or expense is known as a(n) :

___________________ are promises of payment from customers to sellers.

The chronological record of each complete transaction that has occurred is called the:

A business uses a credit to record:

A transaction that credits an asset account and credits a liability account must also affect one or more other accounts.

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

The debt ratio is calculated by dividing total assets by total liabilities.

The heading on every financial statement lists the three W's-Who (the name of the business);What (the name of the statement);and Where (the organization's address).

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

Jackson Consulting had the following accounts and balances at December 31: Using the information in the table,calculate Jackson Consulting's reported net income for the period.

Identify by marking an X in the appropriate column,whether each of the following items would likely serve as a source document.The first one is done as an example.

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

A transaction that decreases a liability and increases an asset must also affect one or more other accounts.

Jason Hope decided to open a hotel in his hometown.Prepare journal entries to record the following transactions.Hope uses the accounts Room Rental Revenue and Event Revenue.All expenses for special events are recorded as Event Expense.

The debt ratio is used:

Unearned revenue is classified as a(an)_______________ on a business's balance sheet.

If Taylor Willow,the owner of Willow Hardware proprietorship,uses cash of the business to purchase a family automobile,the business should record this use of cash with an entry to:

Mary Martin,the owner of Martin Consulting,started the business by investing $40,000 cash.Identify the general journal entry below that Martin Consulting will make to record the transaction.

A debit entry is always an increase in the account.