Question 1

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

Question 2

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 3

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

Accepted Answer

The answer of A ____________ gives a complete record of...

Question 4

A company had total assets of $350,000, total liabilities of $101,500 and total equity of $248,500. Calculate the company's debt ratio.

Accepted Answer

Debt Ratio = Total L...

Question 5

A _______________ is a list of all the accounts used by a company and their identification codes but does not contain the balances.

Accepted Answer

The answer of A _______________ is a list of all...

Question 6

A debit entry is always an increase in the account.

Accepted Answer

A) True 
 B)False

Question 7

At a given point in time, a business's trial balance is a list of all of its general ledger accounts and their balances.

Accepted Answer

A) True 
 B)False

Question 8

Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately. Which of the following general journal entries will Wiley Consulting make to record this transaction?

Accepted Answer

A)    Accounts Payable 7,000 Supplies 7,000\begin{array} { | l | r | r | } \hline 	ext { Accounts Payable } & 7,000 & \\hline 	ext { Supplies } & & 7,000 \\hline \hline\end{array} Accounts Payable  Supplies ​7,000​7,000​​ 
B)    Cash 7,000 Supplies 7,000\begin{array} { | l | r | r | } \hline 	ext { Cash } & 7,000 & \\hline 	ext { Supplies } & & 7,000 \\hline\end{array} Cash  Supplies ​7,000​7,000​​ 
C)    Supplies 7,000 Cash 7,000\begin{array} { | c | r | r | } \hline 	ext { Supplies } & 7,000 & \\hline 	ext { Cash } & & 7,000 \\hline\end{array} Supplies  Cash ​7,000​7,000​​ 
D)    Supplies 7,000 Accounts Payable 7,000\begin{array} { | l | r | r | } \hline 	ext { Supplies } & 7,000 & \\hline 	ext { Accounts Payable } & & 7,000 \\hline \hline\end{array} Supplies  Accounts Payable ​7,000​7,000​​ 
E)    Supplies Expense 7,000 Accounts Payable 7,000\begin{array} { | l | r | r | } \hline 	ext { Supplies Expense } & 7,000 & \\hline 	ext { Accounts Payable } & & 7,000 \\hline\end{array} Supplies Expense  Accounts Payable ​7,000​7,000​​F) B) and C)
G) A) and B)

Question 9

Asset accounts are normally decreased by debits.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Jackson Advertising Co. had assets of $475,000; liabilities of $275,500; and equity of $199,500. Calculate its debt ratio.

Accepted Answer

Debt Ratio = Total L...

Question 12

Source documents provide evidence of business transactions and are the basis for accounting entries.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  It is 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) A) and B)
G) None of the above

Question 14

A debit is used to record an increase in all of the following accounts except:

Accepted Answer

A)  Supplies
B)  Cash
C)  Accounts Payable
D)  Dividends
E)  Prepaid InsuranceF) B) and D)
G) A) and D)

Question 15

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

Accepted Answer

A)  Cash
B)  Accounts Payable
C)  Salaries Expense
D)  Common Stock
E)  EquipmentF) B) and C)
G) A) and B)

Question 16

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 17

Identify the account below that is classified as a liability in a company's chart of accounts:

Accepted Answer

A)  Cash
B)  Unearned Revenue
C)  Salaries Expense
D)  Accounts Receivable
E)  SuppliesF) A) and D)
G) A) and C)

Question 18

Unearned revenues are classified as liabilities.

Accepted Answer

A) True 
 B)False

Question 19

Identify the item below that would cause the trial balance to not balance.

Accepted Answer

A)  A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash.
B)  The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable.
C)  A $50 cash receipt for the performance of a service was not recorded at all.
D)  The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200.
E)  The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750.F) C) and E)
G) B) and C)

Question 20

All of the following are asset accounts except:

Accepted Answer

A)  Accounts Receivable.
B)  Buildings.
C)  Supplies expense.
D)  Equipment.
E)  Prepaid insurance.F) A) and B)
G) C) and D)

Exam 2: Accounting for Business Transactions

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

Correct AnswerverifiedShow Answer

Source documents provide evidence of business transactions and are the basis for accounting entries.

Correct AnswerverifiedShow Answer

A debit is used to record an increase in all of the following accounts except:

Correct AnswerverifiedShow Answer

Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately. Which of the following general journal entries will Wiley Consulting make to record this transaction?

Correct AnswerverifiedShow Answer

Identify the item below that would cause the trial balance to not balance.

Correct AnswerverifiedShow Answer

Select the account below that normally has a credit balance.

Correct AnswerverifiedShow Answer

Unearned revenues are classified as liabilities.

Correct AnswerverifiedShow Answer

A debit entry is always an increase in the account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

All of the following are asset accounts except:

Correct AnswerverifiedShow Answer

Asset accounts are normally decreased by debits.

Correct AnswerverifiedShow Answer

A company had total assets of $350,000, total liabilities of $101,500 and total equity of $248,500. Calculate the company's debt ratio.

Correct AnswerverifiedDebt Ratio = Total L...View AnswerShow 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

Identify the account below that is classified as a liability in a company's chart of accounts:

Correct AnswerverifiedShow Answer

At a given point in time, a business's trial balance is a list of all of its general ledger accounts and their balances.

Correct AnswerverifiedShow Answer

A _______________ is a list of all the accounts used by a company and their identification codes but does not contain the balances.

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

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

Jackson Advertising Co. had assets of $475,000; liabilities of $275,500; and equity of $199,500. Calculate its debt ratio.

Correct AnswerverifiedDebt Ratio = Total L...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Debt Ratio = Total L...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Debt Ratio = Total L...
View Answer