Question 1

Lu Lu's Catering has a debt ratio equal to .3 and its competitor,Able's Bakery,has a debt ratio equal to .7.Determine the statement below that is correct.

Accepted Answer

A)  Able's Bakery has a smaller percentage of its assets financed with liabilities as compared to Lu Lu's.
B)  Able's Bakery's financial leverage is less than Lu Lu's.
C)  Able's Bakery's financial leverage is greater than Lu Lu's.
D)  Lu Lu's has a higher risk from its financial leverage.
E)  Higher financial leverage involves lower risk.F) A) and D)
G) None of the above

Question 2

The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpful to both its owners and creditors.

Accepted Answer

A) True 
 B)False

Question 3

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of BBB Company sends a $2,500 invoice to...

Question 4

The right side of a T-account is a(n) :

Accepted Answer

A)  Debit.
B)  Increase.
C)  Credit.
D)  Decrease.
E)  Account balance.F) A) and C)
G) All of the above

Question 5

Wiley Hill opened Hill's Repairs on March 1 of the current year.During March,the following transactions occurred and were recorded in the company's books: 1.Wiley invested $25,000 cash in the business.
2) Wiley contributed $100,000 of equipment to the business.
3) The company paid $2,000 cash to rent office space for the month.
4) The company received $16,000 cash for repair services provided during March.
5) The company paid $6,200 for salaries for the month.
6) The company provided $3,000 of services to customers on account.
7) The company paid cash of $500 for monthly utilities.
8) The company received $3,100 cash in advance of providing repair services to a customer.
9) Wiley withdrew $5,000 for his personal use from the company.
Based on this information,the balance in Wiley Hill,Capital reported on the Statement of Owner's Equity at the end of March would be:

Accepted Answer

A)  $133,400.
B)  $130,300.
C)  $125,300.
D)  $8,400.
E)  $13,500.F) B) and E)
G) B) and D)

Question 6

George Butler owned a tugboat and was tired of his current job.He decided to open a business that provides day tugboat tours to tourists along the Mississippi River near his hometown.Prepare journal entries to record the following transactions.

Accepted Answer

The answer of George Butler owned a tugboat and was...

Question 7

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.F) D) and E)
G) A) and C)

Question 8

When a company bills a customer for $700 for services rendered,the journal entry to record this transaction will include a $700 debit to Services Revenue.

Accepted Answer

A) True 
 B)False

Question 9

A business's general journal provides a place for recording all of the following except:

Accepted Answer

A)  The transaction date.
B)  The names of the accounts involved.
C)  The amount of each debit and credit.
D)  An explanation of the transaction.
E)  The balance in each account.F) A) and E)
G) C) and D)

Question 10

A business's source documents:

Accepted Answer

A)  include the ledger.
B)  Provide objective evidence that a transaction has taken place.
C)  must be in electronic form.
D)  are prepared internally to ensure accuracy.
E)  include the chart of accounts.F) B) and E)
G) A) and E)

Question 11

The four categories of equity accounts are ________________,__________________,______________________,and ______________________.
Answers can appear in any order.

Accepted Answer

owner,capi...

Question 12

Given the following errors,identify the one by itself that will cause the trial balance to be out of balance.

Accepted Answer

A)  A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense.
B)  A $100 cash receipt from a customer in payment of her account posted as a $100 debit to Cash and a $10 credit to Accounts Receivable.
C)  A $75 cash receipt from a customer in payment of her account posted as a $75 debit to Cash and a $75 credit to Cash.
D)  A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash.
E)  An $800 prepayment from a customer for services to be rendered in the future was posted as an $800 debit to Unearned Revenue and an $800 credit to Cash.F) A) and D)
G) B) and C)

Question 13

Identify the account below that is classified as a liability account:

Accepted Answer

A)  Cash
B)  Accounts Payable
C)  Salaries Expense
D)  J.Jackson,Capital
E)  EquipmentF) All of the above
G) A) and E)

Question 14

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Accepted Answer

A) True 
 B)False

Question 15

Credits always increase account balances.

Accepted Answer

A) True 
 B)False

Question 16

You decrease the Accounts Payable account on the ___________ side of its account.

Accepted Answer

The answer of You decrease the Accounts Payable account on...

Question 17

Prepaid expenses are generally:

Accepted Answer

A)  Payments made for products and services that do not ever expire.
B)  Classified as liabilities on the balance sheet.
C)  Decreases in equity.
D)  Assets that represent prepayments of future expenses.
E)  Promises of payments by customers.F) D) and E)
G) B) and E)

Question 18

Identify the account below that impacts the Equity of a business:

Accepted Answer

A)  Utilities Expense
B)  Accounts Payable
C)  Accounts Receivable
D)  Cash
E)  Unearned RevenueF) A) and C)
G) C) and D)

Question 19

Pippa's Paralegal Services completed these transactions in February:
a.Purchased office supplies on account,$300.
b.Completed work for a client on credit,$500.
c.Paid cash for the office supplies purchased in (a).
d.Completed work for a client and received $800 cash.
e.Received $500 cash for the work described in (b).
f.Received $1,000 from a client for paralegal services to be performed in March.
Prepare journal entries to record the above transactions.Explanations are not necessary.

Accepted Answer

The answer of Pippa's Paralegal Services completed these transactions in...

Question 20

_________________ 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...

Exam 2: Analyzing and Recording Transactions

Lu Lu's Catering has a debt ratio equal to .3 and its competitor,Able's Bakery,has a debt ratio equal to .7.Determine the statement below that is correct.

Correct Answer
verified

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

Correct Answer
verified

The four categories of equity accounts are ,,,and ______. Answers can appear in any order.

Correct Answer
verified
owner,capi...
View Answer

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

Correct Answer
verified

The right side of a T-account is a(n) :

Correct Answer
verified

Prepaid expenses are generally:

Correct Answer
verified

You decrease the Accounts Payable account on the ___________ side of its account.

Correct Answer
verified

The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpful to both its owners and creditors.

Correct Answer
verified

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Correct Answer
verified

Correct Answer
verified

Identify the account below that impacts the Equity of a business:

Correct Answer
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Given the following errors,identify the one by itself that will cause the trial balance to be out of balance.

Correct Answer
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A business's source documents:

Correct Answer
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Identify the account below that is classified as a liability account:

Correct Answer
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When a company bills a customer for $700 for services rendered,the journal entry to record this transaction will include a $700 debit to Services Revenue.

Correct Answer
verified

George Butler owned a tugboat and was tired of his current job.He decided to open a business that provides day tugboat tours to tourists along the Mississippi River near his hometown.Prepare journal entries to record the following transactions.

Correct Answer
verified

Credits always increase account balances.

Correct Answer
verified

Correct Answer
verified

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct Answer
verified

A business's general journal provides a place for recording all of the following except:

Correct Answer
verified

Exam 2: Analyzing and Recording Transactions

Lu Lu's Catering has a debt ratio equal to .3 and its competitor,Able's Bakery,has a debt ratio equal to .7.Determine the statement below that is correct.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The four categories of equity accounts are ________________,__________________,______________________,and ______________________. Answers can appear in any order.

Correct Answerverifiedowner,capi...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The right side of a T-account is a(n) :

Correct AnswerverifiedShow Answer

Prepaid expenses are generally:

Correct AnswerverifiedShow Answer

You decrease the Accounts Payable account on the ___________ side of its account.

Correct AnswerverifiedShow Answer

The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpful to both its owners and creditors.

Correct AnswerverifiedShow Answer

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Identify the account below that impacts the Equity of a business:

Correct AnswerverifiedShow Answer

Given the following errors,identify the one by itself that will cause the trial balance to be out of balance.

Correct AnswerverifiedShow Answer

A business's source documents:

Correct AnswerverifiedShow Answer

Identify the account below that is classified as a liability account:

Correct AnswerverifiedShow Answer

When a company bills a customer for $700 for services rendered,the journal entry to record this transaction will include a $700 debit to Services Revenue.

Correct AnswerverifiedShow Answer

George Butler owned a tugboat and was tired of his current job.He decided to open a business that provides day tugboat tours to tourists along the Mississippi River near his hometown.Prepare journal entries to record the following transactions.

Correct AnswerverifiedShow Answer

Credits always increase account balances.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct AnswerverifiedShow Answer

A business's general journal provides a place for recording all of the following except:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

The four categories of equity accounts are ,,,and ______. Answers can appear in any order.

Correct Answer
verified
owner,capi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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