Question 1

The chronological record of each complete transaction that has occurred in a business is called the:

Accepted Answer

A)   Account balance.
B)   Ledger.
C)   Journal.
D)   Trial balance.
E)   Cash account.F) A) and E)
G) C) and D)

Question 2

Which of the following is not a step in the accounting process?

Accepted Answer

A)   Record relevant transactions and events in a journal.
B)   Post journal information to the ledger accounts.
C)   Prepare and analyze the trial balance.
D)   Analyze each transaction.
E)   Verify that revenues and expenses are equal.F) B) and E)
G) A) and B)

Question 3

Booth Industries has liabilities of $105 million and total assets of $350 million.Its debt ratio is 40.0%.

Accepted Answer

A) True 
 B)False

Question 4

Transactions are recorded first in the ledger and then transferred to the journal.

Accepted Answer

A) True 
 B)False

Question 5

A customer's promise to pay on credit is classified as an account payable by the seller.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

answers c...

Question 7

Match the following terms with the appropriate definition.
-Posting

Accepted Answer

A)  Verifiable evidence that transactions have occurred used to record accounting information.
B)  Decrease in an asset, dividend and expense account, and increase in a liability, common stock and revenue account; recorded on the right side of a T-account.
C)  An increase in an asset and expense account, and decrease in a liability, common stock,and revenue account; recorded on the left side of a T-account.
D)  A company's chronological record of each transaction in one place that shows debits and credits for each transaction.
E)  An accounting system where each transaction affects and is recorded in at least twoaccounts; the sum of the debits for each entry must equal the sum of its credits.F) The process of transferring journal entry information to the ledger accounts.G) A record of the increases and decreases in a specific asset, liability, equity, revenue, orexpense item.H) A record containing all the accounts of a company and their balances.I) A list of accounts and their balances at a point in time.J) A representation of a ledger account used to understand the effects of transactions.K) C) and I)
L) E) and F)

Question 8

Increases in liability accounts are recorded as debits.

Accepted Answer

A) True 
 B)False

Question 9

Credits always increase account balances.

Accepted Answer

A) True 
 B)False

Question 10

Match the following terms with the appropriate definition.
-Trial balance

Accepted Answer

A)  Verifiable evidence that transactions have occurred used to record accounting information.
B)  Decrease in an asset, dividend and expense account, and increase in a liability, common stock and revenue account; recorded on the right side of a T-account.
C)  An increase in an asset and expense account, and decrease in a liability, common stock,and revenue account; recorded on the left side of a T-account.
D)  A company's chronological record of each transaction in one place that shows debits and credits for each transaction.
E)  An accounting system where each transaction affects and is recorded in at least twoaccounts; the sum of the debits for each entry must equal the sum of its credits.F) The process of transferring journal entry information to the ledger accounts.G) A record of the increases and decreases in a specific asset, liability, equity, revenue, orexpense item.H) A record containing all the accounts of a company and their balances.I) A list of accounts and their balances at a point in time.J) A representation of a ledger account used to understand the effects of transactions.K) A) and E)
L) B) and C)

Question 11

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

Question 12

The amount of net income is added on the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 13

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) B) and E)
G) A) and C)

Question 14

On January 1 of the current year,Jimmy's Sandwich Company reported stockholders' equity totaling $122,500.During the current year,total revenues were $96,000 while total expenses were $85,500.Also,during the current year paid $20,000 in cash dividends.No other changes in equity occurred during the year.If,on December 31 of the current year,total assets are $196,000,the change in total stockholders' equity during the year was:

Accepted Answer

A)   A decrease of $9,500.
B)   An increase of $9,500.
C)   An increase of $30,500.
D)   A decrease of $30,500.
E)   An increase of $73,500.F) A) and D)
G) B) and D)

Question 15

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) .
-Dividends

Accepted Answer

A)  L
B)  SE
C)  R
D)  E
E)  A  F) A) and C)
G) A) and E)

Question 16

A credit entry:

Accepted Answer

A)   Increases asset and expense accounts, and decreases liability, common stock, and revenue accounts.
B)   Is always a decrease in an account.
C)   Decreases asset and expense accounts, and increases liability, common stock, and revenue accounts.
D)   Is recorded on the left side of a T-account.
E)   Is always an increase in an account.F) A) and C)
G) C) and D)

Question 17

After preparing an (unadjusted)trial balance at year-end,R.Chang of Chang Window Company discovered the following errors:
1.Cash payment of the $225 telephone bill for December was recorded twice.
2.Cash payment of a note payable was recorded as a debit to Cash and a debit to Notes Payable for $1,000.
3.A $900 cash withdrawal by the owner was recorded to the correct accounts as $90.
4.An additional investment of $5,000 cash by the stockholder was recorded as a debit to Common Stock and a credit to Cash.
5.A credit purchase of office equipment for $1,800 was recorded as a debit to the Office Equipment account with no offsetting credit entry.
Using the form below,indicate whether the error would cause the trial balance to be out of balance by placing an X in either the yes or no column.Would the errors cause the trial balance to be out of balance?
 $$\begin{array} { l l l } 
\text { Error } & \text { Yes } & \text { No } \
1 . &\underline{\quad\quad}&\underline{\quad\quad} \
2 . &\underline{\quad\quad}&\underline{\quad\quad} \
3. &\underline{\quad\quad}&\underline{\quad\quad} \
4 . & \underline{\quad\quad}&\underline{\quad\quad}\
5 . &\underline{\quad\quad}&\underline{\quad\quad}
\end{array}$$ 
Would the errors cause the trial balance to be out of balance?

Accepted Answer

\[\begin{array} { l l l }
\text { Error...

Question 18

A general journal is:

Accepted Answer

A)   A ledger in which amounts are posted from a balance column account.
B)   Not required if T-accounts are used.
C)   A complete record of all transactions in chronological order from which transaction amounts are posted to the ledger accounts.
D)   Not necessary in electronic accounting systems.
E)   A book of final entry because financial statements are prepared from it.F) A) and B)
G) D) and E)

Question 19

The purchase of land and buildings will generally be recorded in the same ledger account.

Accepted Answer

A) True 
 B)False

Question 20

Jarrod Automotive,owned and operated by Jarrod Johnson,began business in September of the current year.Jarrod,a mechanic,had no experience with recording business transactions.As a result,Jarrod entered all of September's transactions directly into the ledger accounts.When he tried to locate a particular entry he found it confusing and time consuming.He has hired you to improve his accounting procedures.The accounts in his General Ledger follow:  
Prepare the general journal entries,in chronological order (a)through (e),from the T-account entries shown.Include a brief description of the probable nature of each transaction.

Accepted Answer

None...

Exam 2: Analyzing for Business Transactions

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

Correct Answer
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A credit entry:

Correct Answer
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Correct Answer
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Which of the following is not a step in the accounting process?

Correct Answer
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The posting process is the link between the and the .

Correct Answer
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answers c...
View Answer

Credits always increase account balances.

Correct Answer
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Correct Answer
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\text { Error...
View Answer

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) . -Dividends

Correct Answer
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The chronological record of each complete transaction that has occurred in a business is called the:

Correct Answer
verified

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 Answer
verified

Match the following terms with the appropriate definition. -Posting

Correct Answer
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A general journal is:

Correct Answer
verified

Correct Answer
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None...
View Answer

Match the following terms with the appropriate definition. -Trial balance

Correct Answer
verified

Transactions are recorded first in the ledger and then transferred to the journal.

Correct Answer
verified

Booth Industries has liabilities of $105 million and total assets of $350 million.Its debt ratio is 40.0%.

Correct Answer
verified

The amount of net income is added on the statement of retained earnings.

Correct Answer
verified

The purchase of land and buildings will generally be recorded in the same ledger account.

Correct Answer
verified

A customer's promise to pay on credit is classified as an account payable by the seller.

Correct Answer
verified

Increases in liability accounts are recorded as debits.

Correct Answer
verified

Exam 2: Analyzing for Business Transactions

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

Correct AnswerverifiedShow Answer

A credit entry:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a step in the accounting process?

Correct AnswerverifiedShow Answer

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

Correct Answerverified answers c...View AnswerShow Answer

Credits always increase account balances.

Correct AnswerverifiedShow Answer

Correct Answerverified\[\begin{array} { l l l } \text { Error...View AnswerShow Answer

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) . -Dividends

Correct AnswerverifiedShow Answer

The chronological record of each complete transaction that has occurred in a business is called the:

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

Match the following terms with the appropriate definition. -Posting

Correct AnswerverifiedShow Answer

A general journal is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNone...View AnswerShow Answer

Match the following terms with the appropriate definition. -Trial balance

Correct AnswerverifiedShow Answer

Transactions are recorded first in the ledger and then transferred to the journal.

Correct AnswerverifiedShow Answer

Booth Industries has liabilities of $105 million and total assets of $350 million.Its debt ratio is 40.0%.

Correct AnswerverifiedShow Answer

The amount of net income is added on the statement of retained earnings.

Correct AnswerverifiedShow Answer

The purchase of land and buildings will generally be recorded in the same ledger account.

Correct AnswerverifiedShow Answer

A customer's promise to pay on credit is classified as an account payable by the seller.

Correct AnswerverifiedShow Answer

Increases in liability accounts are recorded as debits.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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The posting process is the link between the and the .

Correct Answer
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answers c...
View Answer

Correct Answer
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Correct Answer
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\text { Error...
View Answer

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None...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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