Question 1

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of On December 3, the ABBJ Company paid...

Question 2

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) A) and B)
G) B) and E) D

Question 3

Describe what source documents are and the purpose they serve in a business.

Accepted Answer

Source documents are the proof that tran...

Question 4

The four categories of equity accounts are ________________, __________________, ______________________, and ______________________.

Accepted Answer

contributed capital;...

Question 5

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 stockholders.
E)   A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.F) A) and B)
G) B) and E)

Question 6

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

Accepted Answer

The debt ratio is calculated by dividing...

Question 7

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 8

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

Accepted Answer

A)   Assets and expenses.
B)   Assets and revenues.
C)   Revenues and expenses.
D)   Liabilities and expenses.
E)   Liabilities and dividends.F) C) and D)
G) A) and B)

Question 9

Identify the account below that is classified as an asset account:

Accepted Answer

A)   Unearned Revenue
B)   Accounts Payable
C)   Supplies
D)   Common Stock
E)   Service RevenueF) A) and C)
G) A) and D)

Question 10

Increases in liability accounts are recorded as debits.

Accepted Answer

A) True 
 B)False

Question 11

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

Accepted Answer

A)   A debit to an unearned revenue account.
B)   A debit to a prepaid expense account.
C)   A credit to an unearned revenue account.
D)   A credit to a prepaid expense account.
E)   No entry is required at the time of collection.F) None of the above
G) C) and D)

Question 12

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

Accepted Answer

ledger accounts

Question 13

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment 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.F) A) and E)
G) B) and D)

Question 14

If insurance coverage for the next two years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

Accepted Answer

A) True 
 B)False

Question 15

Unearned revenues are generally:

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 stockholders equity.F) A) and B)
G) C) and E)

Question 16

If a company purchases equipment paying cash, the journal entry to record this transaction will include a debit to Cash.

Accepted Answer

A) True 
 B)False

Question 17

If Taylor Willow, the owner of Willow Hardware Inc., 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 Automobiles and credit Cash
B)   Debit Cash and credit Salary Expense.
C)   Debit Cash and credit Dividends.
D)   Debit Dividends and credit Cash.
E)   Debit Automobiles and credit Cash.F) D) and E)
G) A) and E) D

Question 18

A company's chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

Accepted Answer

A) True 
 B)False

Question 19

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%.F) None of the above
G) All of the above

Question 20

Select the account below that normally has a credit balance.

Accepted Answer

A)   Cash.
B)   Office Equipment.
C)   Wages Payable.
D)   Dividends.
E)   Sales Salaries Expense.F) C) and D)
G) A) and D)

Exam 2: Analyzing for Business Transactions

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

Correct AnswerverifiedShow Answer

Prepaid expenses are generally:

Correct AnswerverifiedD

Describe what source documents are and the purpose they serve in a business.

Correct AnswerverifiedSource documents are the proof that tran...View AnswerShow Answer

The four categories of equity accounts are ________________, __________________, ______________________, and ______________________.

Correct Answerverifiedcontributed capital;...View AnswerShow Answer

The balance column in a ledger account is:

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

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

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

Correct AnswerverifiedShow Answer

Identify the account below that is classified as an asset account:

Correct AnswerverifiedShow Answer

Increases in liability accounts are recorded as debits.

Correct AnswerverifiedShow Answer

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

Correct AnswerverifiedShow Answer

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

Correct Answerverifiedledger accounts

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

Correct AnswerverifiedShow Answer

If insurance coverage for the next two years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

Correct AnswerverifiedShow Answer

Unearned revenues are generally:

Correct AnswerverifiedShow Answer

If a company purchases equipment paying cash, the journal entry to record this transaction will include a debit to Cash.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedD

A company's chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Select the account below that normally has a credit balance.

Correct AnswerverifiedShow Answer

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D

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Source documents are the proof that tran...
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The four categories of equity accounts are , , , and ______.

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contributed capital;...
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The debt ratio is calculated by dividing...
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ledger accounts

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D

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