Question 1

For each of the accounts in the following table (1)identify the type of account as an asset,liability,equity,revenue,or expense,and (2)identify the normal balance of the account.

Accepted Answer

The answer of For each of the accounts in the...

Question 2

The income statement,statement of retained earnings,and statement of cash flows report financial performance over a period of time.

Accepted Answer

A) True 
 B)False

Question 3

At the beginning of January of the current year,Little Mikey's Catering ledger reflected a normal balance of $52,000 for accounts receivable.During January,the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500.Additionally,during January one customer paid Mikey $5,000 for services to be provided in the future.At the end of January,the balance in the accounts receivable account should be:

Accepted Answer

A)  $54,700.
B)  $49,700.
C)  $2,300.
D)  $54,300.
E)  $49,300.F) A) and D)
G) All of the above B

Question 4

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) C) and E)

Question 5

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Accepted Answer

A) True 
 B)False

Question 6

To increase an asset account,we would ________ it and to increase a liability account,we would ________ it.

Accepted Answer

The answer of To increase an asset account,we would ________...

Question 7

Explain debits and credits and their role in the accounting system of a business.

Accepted Answer

Debit refers to the left side of an acco...

Question 8

Posting is the transfer of journal entry information to the ledger.

Accepted Answer

A) True 
 B)False  True

Question 9

Dividends always decrease equity.

Accepted Answer

A) True 
 B)False

Question 10

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 goods or services are delivered.
D)  Recorded as an asset in the accounting records.
E)  Increases to common stock.F) A) and B)
G) A) and C)

Question 11

Lu Lu's Catering has a debt ratio equal to .3 and its competitor,Able's Bakery,has a debt ratio equal to .7.Determine the statement below that is correct.

Accepted Answer

A)  Able's Bakery has a smaller percentage of its assets financed with liabilities as compared to Lu Lu's.
B)  Able's Bakery's financial leverage is less than Lu Lu's.
C)  Able's Bakery's financial leverage is greater than Lu Lu's.
D)  Lu Lu's has a higher risk from its financial leverage.
E)  Higher financial leverage involves lower risk.F) B) and D)
G) A) and D)

Question 12

Andrea Apple opened Apple Photography on January 1 of the current year.During January,the following transactions occurred and were recorded in the company's books: 1.Andrea invested $13,500 cash in the business in exchange for common stock.
2.Andrea contributed $20,000 of photography equipment to the business.
3.The company paid $2,100 cash for an insurance policy covering the next 24 months.
4.The company received $5,700 cash for services provided during January.
5.The company purchased $6,200 of office equipment on credit.
6.The company provided $2,750 of services to customers on account.
7.The company paid cash of $1,500 for monthly rent.
8.The company paid $3,100 on the office equipment purchased in transaction #5 above.
9.Paid $275 cash for January utilities.
Based on this information,the balance in the cash account at the end of January would be:

Accepted Answer

A)  $41,450.
B)  $12,225.
C)  $18,700.
D)  $15,250.
E)  $13,500.F) A) and E)
G) All of the above

Question 13

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

Accepted Answer

A)  Liabilities and expenses.
B)  Assets and revenues.
C)  Revenues and expenses.
D)  Revenues and liabilities.
E)  Dividends and liabilities.F) None of the above
G) D) and E)

Question 14

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0.Based on this information,an investor can conclude:

Accepted Answer

A)  Billy's Catering finances a relatively lower portion of its assets with liabilities than Jackson's Shoes.
B)  Billy's Catering has a lower risk from its financial leverage.
C)  Jackson's Shoes has a higher risk from its financial leverage.
D)  Billy's Catering has the exact same dollar amount of total liabilities and total assets.
E)  Jackson's Shoes has less equity per dollar of assets than Billy's Catering.F) A) and D)
G) B) and E)

Question 15

Credits always increase account balances.

Accepted Answer

A) True 
 B)False

Question 16

Willow Rentals purchased $800 of office supplies on credit.Which of the following general journal entries will Willow Rentals make to record this transaction?

Accepted Answer

A)  Debit Accounts Payable,$800; credit Office Supplies,$800.
B)  Debit Accounts Receivable,$800; credit Office Supplies,$800.
C)  Debit Office Supplies,$800; credit Accounts Receivable,$800.
D)  Debit Office Supplies,$800; credit Accounts Payable,$800.
E)  Debit Cash,$800; credit Office Supplies,$800.F) A) and D)
G) B) and E)

Question 17

A record containing all the separate accounts for a company as well as all of their balances is called the ________.

Accepted Answer

The answer of A record containing all the separate accounts...

Question 18

An unclassified balance sheet broadly groups accounts into assets,liabilities,and equity

Accepted Answer

A) True 
 B)False

Question 19

If Taylor Willow,the sole stockholder of Willow Hardware,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 Salary Expense 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) A) and E)
G) A) and D)

Question 20

Funky Music purchased $25,000 of equipment for cash.The Equipment asset account is ________ for $25,000 and the Cash account is ________ for $25,000.

Accepted Answer

debited; credited

Exam 2: Financial Statements and the Accounting System

For each of the accounts in the following table (1)identify the type of account as an asset,liability,equity,revenue,or expense,and (2)identify the normal balance of the account.

Correct Answer
verified

The income statement,statement of retained earnings,and statement of cash flows report financial performance over a period of time.

Correct Answer
verified

Correct Answer
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B

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

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Correct Answer
verified

To increase an asset account,we would it and to increase a liability account,we would it.

Correct Answer
verified

Explain debits and credits and their role in the accounting system of a business.

Correct Answer
verified
Debit refers to the left side of an acco...
View Answer

Posting is the transfer of journal entry information to the ledger.

Correct Answer
verified
True

Dividends always decrease equity.

Correct Answer
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Unearned revenues are generally:

Correct Answer
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Lu Lu's Catering has a debt ratio equal to .3 and its competitor,Able's Bakery,has a debt ratio equal to .7.Determine the statement below that is correct.

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

Correct Answer
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The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0.Based on this information,an investor can conclude:

Correct Answer
verified

Credits always increase account balances.

Correct Answer
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Willow Rentals purchased $800 of office supplies on credit.Which of the following general journal entries will Willow Rentals make to record this transaction?

Correct Answer
verified

A record containing all the separate accounts for a company as well as all of their balances is called the ________.

Correct Answer
verified

An unclassified balance sheet broadly groups accounts into assets,liabilities,and equity

Correct Answer
verified

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

Correct Answer
verified

Funky Music purchased $25,000 of equipment for cash.The Equipment asset account is for $25,000 and the Cash account is for $25,000.

Correct Answer
verified
debited; credited

Exam 2: Financial Statements and the Accounting System

For each of the accounts in the following table (1)identify the type of account as an asset,liability,equity,revenue,or expense,and (2)identify the normal balance of the account.

Correct AnswerverifiedShow Answer

The income statement,statement of retained earnings,and statement of cash flows report financial performance over a period of time.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

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

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Correct AnswerverifiedShow Answer

To increase an asset account,we would ________ it and to increase a liability account,we would ________ it.

Correct AnswerverifiedShow Answer

Explain debits and credits and their role in the accounting system of a business.

Correct AnswerverifiedDebit refers to the left side of an acco...View AnswerShow Answer

Posting is the transfer of journal entry information to the ledger.

Correct AnswerverifiedTrue

Dividends always decrease equity.

Correct AnswerverifiedShow Answer

Unearned revenues are generally:

Correct AnswerverifiedShow Answer

Lu Lu's Catering has a debt ratio equal to .3 and its competitor,Able's Bakery,has a debt ratio equal to .7.Determine the statement below that is correct.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0.Based on this information,an investor can conclude:

Correct AnswerverifiedShow Answer

Credits always increase account balances.

Correct AnswerverifiedShow Answer

Willow Rentals purchased $800 of office supplies on credit.Which of the following general journal entries will Willow Rentals make to record this transaction?

Correct AnswerverifiedShow Answer

A record containing all the separate accounts for a company as well as all of their balances is called the ________.

Correct AnswerverifiedShow Answer

An unclassified balance sheet broadly groups accounts into assets,liabilities,and equity

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Funky Music purchased $25,000 of equipment for cash.The Equipment asset account is ________ for $25,000 and the Cash account is ________ for $25,000.

Correct Answerverifieddebited; credited

Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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To increase an asset account,we would it and to increase a liability account,we would it.

Correct Answer
verified

Correct Answer
verified
Debit refers to the left side of an acco...
View Answer

Correct Answer
verified
True

Correct Answer
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Correct Answer
verified

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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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Funky Music purchased $25,000 of equipment for cash.The Equipment asset account is for $25,000 and the Cash account is for $25,000.

Correct Answer
verified
debited; credited