Question 1

A debit:

Accepted Answer

A)  Always increases an account.
B)  Is the right-hand side of a T-account.
C)  Always decreases an account.
D)  Is the left-hand side of a T-account.
E)  Is not needed to record a transaction.F) A) and C)
G) All of the above

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

An asset created by prepayment of an insurance premium is:

Accepted Answer

A)  Recorded as a debit to Unearned Revenue.
B)  Recorded as a debit to Prepaid Insurance.
C)  Recorded as a credit to Unearned Revenue.
D)  Recorded as a credit to Prepaid Insurance.
E)  Not recorded in the accounting records until the insurance period expires.F) B) and C)
G) C) and D)

Question 4

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.F) B) and C)
G) A) and C)

Question 5

Identify the correct formula below used to calculate the debt ratio.

Accepted Answer

A)  Total Equity/Total Liabilities.
B)  Total Liabilities/Total Equity.
C)  Total Liabilities/Total Assets.
D)  Total Assets/Total Liabilities.
E)  Total Equity/Total Assets.F) A) and D)
G) B) and C)

Question 6

If the common stock account had a $10,000 credit balance at the beginning of the period,and during the period,stockholders invest an additional $5,000,the balance in the common stock account listed on the trial balance will be equal to a debit balance of $5,000.

Accepted Answer

A) True 
 B)False

Question 7

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

Accepted Answer

A)  Account balance column.
B)  Debit column.
C)  Posting reference column.
D)  Credit column.
E)  Description column.F) A) and B)
G) C) and D)

Question 8

All of the following statements accurately describe the debt ratio except.

Accepted Answer

A)  It is of use to both internal and external users of accounting information.
B)  A relatively high ratio is always desirable.
C)  The dividing line for a high and low ratio varies from industry to industry.
D)  Many factors such as a company's age,stability,profitability and cash flow influence the determination of what would be interpreted as a high versus a low ratio.
E)  The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt.F) C) and D)
G) B) and D)

Question 9

Explain the difference between a general ledger and a chart of accounts.

Accepted Answer

A ledger is a record containing all of t...

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

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

Accepted Answer

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

Question 12

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 E)
G) A) and C)

Question 13

The balance column in a ledger account is:

Accepted Answer

A)  An account entered on the balance sheet.
B)  A column for showing the balance of the account after each entry is posted.
C)  Another name for the dividends account.
D)  An account used to record the transfers of assets from a business to its owner(s) .
E)  A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.F) None of the above
G) All of the above

Question 14

A.Egert Consulting immediately paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that A.Egert Consulting will make to record this transaction.

Accepted Answer

A)     Utilities Expense 500 Cash 500\begin{array}{|l|r|r|}\hline 	ext { Utilities Expense } & 500 & \\hline 	ext { Cash } & & 500 \\hline\end{array} Utilities Expense  Cash ​500​500​​ 
B)     Cash 500 Utilities Expense 500\begin{array}{|l|r|r|}\hline 	ext { Cash } & 500 & \\hline 	ext { Utilities Expense } & & 500 \\hline\end{array} Cash  Utilities Expense ​500​500​​ 
C)     Cash 500 Accounts Payable 500\begin{array}{|l|r|r|}\hline 	ext { Cash } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Cash  Accounts Payable ​500​500​​ 
D)     Utilities Expense 500 Accounts Payable 500\begin{array}{|l|r|r|}\hline 	ext { Utilities Expense } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Utilities Expense  Accounts Payable ​500​500​​ 
E)     Prepaid Utilities 500 Accounts Payable 500\begin{array}{|l|r|r|}\hline 	ext { Prepaid Utilities } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Prepaid Utilities  Accounts Payable ​500​500​​F) B) and D)
G) A) and E)

Question 15

Annie's Catering provided $1,000 of catering services and billed its client for the amount owed.Given the choices below,determine the general journal entry that Annie's Catering will make to record this transaction.

Accepted Answer

A)     Unearned Catering Revenue 1,000 Catering Revenue 1,000\begin{array}{|l|r|r|}\hline 	ext { Unearned Catering Revenue } & 1,000 & \\hline 	ext { Catering Revenue } & & 1,000 \\hline\end{array} Unearned Catering Revenue  Catering Revenue ​1,000​1,000​​ 
B)     Catering Revenue 1,000 Accounts Receivable 1,000\begin{array}{|l|r|r|}\hline 	ext { Catering Revenue } & 1,000 & \\hline 	ext { Accounts Receivable } & & 1,000 \\hline\end{array} Catering Revenue  Accounts Receivable ​1,000​1,000​​ 
C)     Accounts Receivable 1,000 Unearned Catering Revenue 1,000\begin{array}{|l|r|r|}\hline 	ext { Accounts Receivable } & 1,000 & \\hline 	ext { Unearned Catering Revenue } & & 1,000 \\hline\end{array} Accounts Receivable  Unearned Catering Revenue ​1,000​1,000​​ 
D)     Accounts Receivable 1,000 Catering Revenue 1,000\begin{array}{|l|r|r|}\hline 	ext { Accounts Receivable } & 1,000 & \\hline 	ext { Catering Revenue } & & 1,000 \\hline\end{array} Accounts Receivable  Catering Revenue ​1,000​1,000​​ 
E)     Cash 1,000 Catering Revenue 1,000\begin{array}{|l|r|r|}\hline 	ext { Cash } & 1,000 & \\hline 	ext { Catering Revenue } & & 1,000 \\hline\end{array} Cash  Catering Revenue ​1,000​1,000​​F) C) and E)
G) All of the above

Question 16

The third step in the analyzing and recording process is to post the information to the ________.

Accepted Answer

The answer of The third step in the analyzing and...

Question 17

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

Accepted Answer

A)  Dividends account.
B)  Common stock account.
C)  Revenue account.
D)  Expense account.
E)  Liability account.F) B) and E)
G) A) and E)

Question 18

The balance sheet reports the financial position of a company at a point in time.

Accepted Answer

A) True 
 B)False

Question 19

The first step in the processing of a transaction is to analyze the transaction and source documents.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following does not affect the equity of a business?

Accepted Answer

A)  Unearned Revenue
B)  Common Stock
C)  Services Revenue
D)  Wages Expense
E)  DividendsF) None of the above
G) All of the above

Exam 2: Financial Statements and the Accounting System

An asset created by prepayment of an insurance premium is:

Correct AnswerverifiedShow Answer

The third step in the analyzing and recording process is to post the information to the ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

All of the following statements accurately describe the debt ratio except.

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The debt ratio is used:

Correct AnswerverifiedShow Answer

The first step in the processing of a transaction is to analyze the transaction and source documents.

Correct AnswerverifiedShow Answer

A.Egert Consulting immediately paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that A.Egert Consulting will make to record this transaction.

Correct AnswerverifiedShow Answer

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe debt ratio is calculated by dividing...View AnswerShow Answer

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

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If the common stock account had a $10,000 credit balance at the beginning of the period,and during the period,stockholders invest an additional $5,000,the balance in the common stock account listed on the trial balance will be equal to a debit balance of $5,000.

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The balance sheet reports the financial position of a company at a point in time.

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The balance column in a ledger account is:

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

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Annie's Catering provided $1,000 of catering services and billed its client for the amount owed.Given the choices below,determine the general journal entry that Annie's Catering will make to record this transaction.

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Which of the following does not affect the equity of a business?

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A debit:

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Identify the correct formula below used to calculate the debt ratio.

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

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Explain the difference between a general ledger and a chart of accounts.

Correct AnswerverifiedA ledger is a record containing all of t...View AnswerShow Answer

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The debt ratio is calculated by dividing...
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The posting process is the link between the and the .

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A ledger is a record containing all of t...
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