Question 1

A more structured format that is similar to a T-account in that it has columns for debits and credits, but that is different in that it has columns for transaction date, explanation, and the account balance is the _____________________.

Accepted Answer

The answer of A more structured format that is similar...

Question 2

Gi Gi's Bakery has total assets of $425 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio.

Accepted Answer

A)  38.6%. 
B)  13.4%. 
C)  34.9%. 
D)  25.9%. 
E)  14.9%.

Question 3

For each of the accounts in the following table (1) identify the type of account as an asset, liability, equity, revenue, or expense, and (2) identify the normal balance of the account. $$\begin{array} { | l | l | l | } 
\hline & \text { Account Type } & \text { Normal Balance } \
\hline \text { a. Wages Experse } & & \
\hline \text { b. Accounts Receivable } & & \
\hline \text { c. Commissions Eamed } & & \
\hline \text { d. Salaries Payable } & & \
\hline \text { e. Common Stock } & & \
\hline \text { f. Unearned Advertising Revenue } & & \
\hline \text { E. Salaries Expense } & & \
\hline \text { H. Magazine Subscription Revenue } & & \
\hline \text { i. Dividends } & & \
\hline \text { j. Prepaid Insurance } & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the accounts in the...

Question 4

Jerry's Butcher Shop, Inc. had the following assets and liabilities at the beginning and end of the current year:
$\begin{array}{llcc}
 & \text { Assets} &\text {  Liabilities  }\
 \text { Beginning of the year ............ } &\$114,000& \$68,000\
 \text { End of the year ......................} &135,000&73,000\
\end{array}$
 
If Jerry invested an additional $12,000 in the business during the year, but withdrew no assets during the year, what was the amount of net income earned by Jerry's Butcher Shop, Inc.?

Accepted Answer

The answer of Jerry's Butcher Shop, Inc. had the following...

Question 5

Identify the statement below that 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 by the customer are called accounts receivable. 
C)  Increases and decreases in cash are always recorded in the common stock 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 6

_________________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

Accepted Answer

The answer of _________________ documents identify and describe transactions and...

Question 7

Source documents provide evidence of business transactions and are the basis for accounting entries.

Accepted Answer

A) True 
 B)False

Question 8

Jerry's Butcher Shop, Inc. had the following assets and liabilities at the beginning and end of the current year:
$\begin{array}{llcc}
 & \text { Assets} &\text {  Liabilities  }\
 \text { Beginning of the year ............ } &\$114,000& \$68,000\
 \text { End of the year ......................} &135,000&73,000\
\end{array}$

If Jerry made no investments in the business and withdrew no assets during the year, what was the amount of net income earned by Jerry's Butcher Shop, Inc.?

Accepted Answer

The answer of Jerry's Butcher Shop, Inc. had the following...

Question 9

Identify the statement below that is correct?

Accepted Answer

A)  The left side of a T-account is the credit side. 
B)  Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts. 
C)  The left side of a T-account is the debit side. 
D)  Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts. 
E)  In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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 12

Identify the accounts that would normally have balances in the credit column of a business's trial balance

Accepted Answer

A)  Liabilities and expenses. 
B)  Assets and revenues. 
C)  Revenues and expenses. 
D)  Revenues and liabilities. 
E)  Dividends and liabilities

Question 13

The general journal is known as the book of final entry because financial statements are prepared from it.

Accepted Answer

A) True 
 B)False

Question 14

Posting is the transfer of journal entry information to the ledger.

Accepted Answer

A) True 
 B)False

Question 15

J. Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

Accepted Answer

A)  $\begin{array} { | c | r | r | } 
\hline \text { Insurance Expense } & 2,500 & \
\hline \text { Cash } & & 2,500 \
\hline
\end{array}$ 
B)  $\begin{array} { | c | r | r | } 
\hline \text { Cash } & 2,500 & \
\hline \text { Insurance Expense } & & 2,500 \
\hline
\end{array}$ 
C)  $\begin{array} { | c | r | r | } 
\hline \text { Cash } & 2,500 & \
\hline \text { Prepaid Insurance } & & 2,500 \
\hline
\end{array}$ 
D)  $\begin{array} { | c | r | r | } 
\hline \text { Prepaid Insurance } & 2,500 & \
\hline \text { Cash } & & 2,500 \
\hline
\end{array}$ 
E)  $\begin{array} { | c | r | r | } 
\hline \text { Insurance Expense } & 2,500 & \
\hline \text { Prepaid Insurance } & & 2,500 \
\hline
\end{array}$

Question 16

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 17

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?

Accepted Answer

A)  $\begin{array} { | c | c | c | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Accounts Receivable } & & 1,500 \
\hline
\end{array}$ 
B)  $\begin{array} { | c | c | c | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Unearned Desigrn Revenue } & & 1,500 \
\hline
\end{array}$ 
C)  $\begin{array} { | c | c | c | } 
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$ 
D)  $\begin{array} { | c | r | r | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Design Reverus } & & 1,500 \
\hline
\end{array}$ 
E)  $\begin{array} { | c | r | r | } 
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$

Question 18

Funky Music purchased $25,000 of equipment for cash. The Equipment asset account is _______________ for $25,000 and the cash account is _______________ for $25,000.

Accepted Answer

The answer of Funky Music purchased $25,000 of equipment for...

Question 19

_____________________________ requires that each transaction affect, and be recorded in, at least two accounts. It also means that total amounts debited must equal total amounts credited for each transaction.

Accepted Answer

The answer of _____________________________ requires that each transaction affect, and...

Question 20

On February 5, Teddy's Catering purchased an oven that cost $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.

Accepted Answer

The answer of On February 5, Teddy's Catering purchased an...

Exam 2: Analyzing for Business Transactions

A more structured format that is similar to a T-account in that it has columns for debits and credits, but that is different in that it has columns for transaction date, explanation, and the account balance is the _____________________.

Gi Gi's Bakery has total assets of $425 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio.

Identify the statement below that is correct.

_________________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

Source documents provide evidence of business transactions and are the basis for accounting entries.

Identify the statement below that is correct?

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

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

Identify the accounts that would normally have balances in the credit column of a business's trial balance

The general journal is known as the book of final entry because financial statements are prepared from it.

Posting is the transfer of journal entry information to the ledger.

J. Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

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

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?

Funky Music purchased $25,000 of equipment for cash. The Equipment asset account is _ for $25,000 and the cash account is _ for $25,000.

_____________________________ requires that each transaction affect, and be recorded in, at least two accounts. It also means that total amounts debited must equal total amounts credited for each transaction.

On February 5, Teddy's Catering purchased an oven that cost $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.