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The journal is known as a book of original entry.

A) True
B) False

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


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

F) C) and D)
G) A) and D)

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At the beginning of the current year,Trenton Company's total assets were $248,000 and its total liabilities were $175,000.During the year,the company reported total revenues of $93,000,total expenses of $76,000 and dividends of $5,000.There were no other changes in equity during the year and total assets at the end of the year were $260,000.Trenton Company's debt ratio at the end of the current year is:


A) 70.6%.
B) 67.3%.
C) 32.7%.
D) 48.6%.
E) 1.42%.

F) A) and D)
G) A) and C)

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B

Smiles Entertainment had the following accounts and balances at December 31: AccountDebitCredit Cash $10,000 Accounts Receivable 2,000 Prepaid Insurance 2,400 Supplies 1,000 Accounts Payable $5,000 Common Stock 4,000 Retained Earnings 900 Service Revenue 7,000 Salaries Expense 500 Utilities Expense 1,000 Totals $16,900$16,900\begin{array}{lrr}\text {Account}&\text {Debit}&\text {Credit}\\\text { Cash } & \$ 10,000 \\\text { Accounts Receivable } & 2,000 \\\text { Prepaid Insurance } & 2,400 \\\text { Supplies } & 1,000\\\text { Accounts Payable } & & \$ 5,000 \\\text { Common Stock } & & 4,000 \\\text { Retained Earnings } & & 900 \\\text { Service Revenue } & & 7,000 \\\text { Salaries Expense } & 500 & \\\text { Utilities Expense } & 1,000 & \\\text { Totals } & \$ 16,900 & \$ 16,900\end{array} Using the information in the table,calculate the company's reported net income for the period.


A) $1,100.
B) $4,000.
C) $8,500
D) $10,400.
E) $5,500.

F) D) and E)
G) None of the above

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Richard Redden,the sole stockholder,contributed $70,000 in cash and land worth $130,000 in exchange for common stock to open a new business,RR Consulting.Which of the following general journal entries will RR Consulting make to record this transaction?


A) Debit Assets $200,000; credit Common Stock, $200,000.
B) Debit Cash and Land, $200,000; credit Common Stock, $200,000.
C) Debit Cash $70,000; debit Land $130,000; credit Common Stock, $200,000.
D) Debit Common Stock, $200,000; credit Cash $70,000, credit Land, $130,000.
E) Debit Common Stock, $200,000; credit Assets, $200,000.

F) C) and D)
G) B) and D)

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C

A business's source documents may include all of the following except:


A) Sales tickets.
B) Ledgers.
C) Checks.
D) Purchase orders.
E) Bank statements.

F) A) and B)
G) B) and D)

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The record of all accounts and their balances used by a business is called a:


A) Journal.
B) Book of original entry.
C) General Journal.
D) Balance column journal.
E) Ledger (or General Ledger) .

F) All of the above
G) B) and C)

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


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

F) D) and E)
G) None of the above

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A $130 credit to Supplies was credited to Fees Earned by mistake.By what amounts are the accounts under- or overstated as a result of this error?


A) Supplies, understated $130; Fees Earned, overstated $130.
B) Supplies, understated $260; Fees Earned, overstated $130.
C) Supplies, overstated $130; Fees Earned, overstated $130.
D) Supplies, overstated $130; Fees Earned, understated $130.
E) Supplies, overstated $260; Fees Earned, understated $130.

F) A) and B)
G) All of the above

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

A) True
B) False

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


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

F) A) and E)
G) C) and E)

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

A) True
B) False

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The right side of an account is called the debit side.

A) True
B) False

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Match the following terms with the appropriate definition. -Chart of accounts


A) A record containing all accounts of a company and their balances.
B) A written promise to pay a definite sum of money on a specified future date.
C) The difference between total debits and total credits for an account including the beginning balance.
D) An increase in an asset, dividend, and expense account, and a decrease in a liability, common stock, and revenue account; recorded on the left side of a T-account.
E) A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances.
F) An account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
G) The ratio of total liabilities to total assets; used to reflect the risk associated with the company's debts.
H) A list of all accounts used by a company and the identification number assigned to each account.
I) A decrease in an asset, dividend, and expense account, and an increase in a liability, common stock, and revenue account; recorded on the right side of a T-account.
J) A chronological record of each transaction in one place that shows debits and credits for each transaction.

K) A) and D)
L) G) and H)

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Match the following terms with the appropriate definition. -Debt ratio


A) A record containing all accounts of a company and their balances.
B) A written promise to pay a definite sum of money on a specified future date.
C) The difference between total debits and total credits for an account including the beginning balance.
D) An increase in an asset, dividend, and expense account, and a decrease in a liability, common stock, and revenue account; recorded on the left side of a T-account.
E) A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances.
F) An account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
G) The ratio of total liabilities to total assets; used to reflect the risk associated with the company's debts.
H) A list of all accounts used by a company and the identification number assigned to each account.
I) A decrease in an asset, dividend, and expense account, and an increase in a liability, common stock, and revenue account; recorded on the right side of a T-account.
J) A chronological record of each transaction in one place that shows debits and credits for each transaction.

K) A) and F)
L) F) and J)

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Identify the statement below that is true.


A) If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions.
B) The trial balance is a book of original entry.
C) Another name for the trial balance is the chart of accounts.
D) The trial balance is a list of all accounts from the ledger with their balances at a point in time.
E) The trial balance is another name for the balance sheet as long as debits balance with credits.

F) A) and C)
G) C) and D)

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Crediting an expense account decreases it.

A) True
B) False

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An asset created by prepayment of an insurance premium is:


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) All of the above
G) D) and E)

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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.(Omit explanations.) 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.(Omit explanations.)

Correct Answer

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11ea84bb_ea5a_2b58_bd15_1fd60ccbe158_TB6946_00

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

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