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When cash is received from a stockholder in exchange for common stock, the transaction is recorded by debiting Cash and crediting a(n) :


A) Asset account.
B) Equity account.
C) Revenue account.
D) Expense account.
E) Liability account.

F) C) and E)
G) C) and D)

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A bookkeeper has debited an asset account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction:


A) Credit another asset account for $1,500.
B) Credit another liability account for $1,500.
C) Credit a revenue account for $1,500.
D) Credit the common stock account for $1,500.
E) Debit another asset account for $1,500.

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

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A company paid $100 in cash dividends. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts. A company paid $100 in cash dividends. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

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


A) Debit Accounts Payable $200,000; Credit Common Stock, $200,000.
B) Credit 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) A) and E)
G) A) and D)

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Describe the link between a business's income statement, the statement of \]retained earnings, and the balance sheet.

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The income statement shows the amount of...

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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.

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Debt Ratio = Total L...

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An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

A) True
B) False

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An account balance is:


A) The total of the credit side of the account.
B) The total of the debit side of the account.
C) The difference between the total debits and total credits for an account including the beginning balance.
D) Used to identify source documents.
E) Always a credit.

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

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The ________ is a collection of all accounts and their balances.

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general ledger (or l...

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A revenue account normally has a debit balance.

A) True
B) False

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Adriana Graphic Design receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Adriana Graphic Design make to record this transaction?


A)  Cash 1,500 Accounts Receivable 1,500\begin{array}{|l|r|r|}\hline \text { Cash } & 1,500 & \\\hline \text { Accounts Receivable } & & 1,500 \\\hline\end{array}
B)  Cash 1,500 Unearned Design Revenue 1,500\begin{array}{|l|r|r|}\hline \text { Cash } & 1,500 & \\\hline \text { Unearned Design Revenue } & & 1,500 \\\hline\end{array}
C)  Accounts Receivable 1,500 Unearned Desion Revenue 1,500\begin{array}{|l|l|l|}\hline \text { Accounts Receivable } & 1,500 & \\\hline \text { Unearned Desion Revenue } & & 1,500 \\\hline\end{array}
D)  Accounts Payable 1,500 Design Revenue 1,500\begin{array}{|l|r|r|}\hline \text { Accounts Payable } & 1,500 & \\\hline \text { Design Revenue } & & 1,500 \\\hline\end{array}
E)  Accounts Receivable 1,500 Cash 1,500\begin{array}{|l|r|r|}\hline \text { Accounts Receivable } & 1,500 & \\\hline \text { Cash } & & 1,500 \\\hline\end{array}

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

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Explain the difference between a general ledger and a chart of accounts.

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A ledger is a record containing all of t...

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Which financial statement reports an organization's financial position at a single point in time?


A) Income statement.
B) Balance sheet.
C) Statement of retained earnings.
D) Cash flow statement.
E) Trial balance.

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

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Sally's Salon began operations on January 1 of the current year with an investment by Sally of $21,155 in exchange for common stock. Based on the following trial balance prepare an income statement, statement of retained earnings, and a balance sheet. There were no additional common stock issuances during the year. Sally's Salon began operations on January 1 of the current year with an investment by Sally of $21,155 in exchange for common stock. Based on the following trial balance prepare an income statement, statement of retained earnings, and a balance sheet. There were no additional common stock issuances during the year.

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blured image blured image Sally's ...

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During the month of February, Rubio Services had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the February 1 beginning cash balance?


A) $700.
B) $1,100.
C) $2,900.
D) $0.
E) $4,300.

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

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________ is the process of transferring journal entry information from the journal to the ledger.

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Debits increase asset and expense accounts.

A) True
B) False

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A company's list of accounts and the identification numbers assigned to each account is called a:


A) Source document.
B) Journal.
C) Trial balance.
D) Chart of accounts.
E) General Journal.

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

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Using the following list of accounts and identification letters A through J, enter the type of account and its normal balance into the table below. The first item is filled in as an example: Using the following list of accounts and identification letters A through J, enter the type of account and its normal balance into the table below. The first item is filled in as an example:

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On February 5, Kirkland Co. purchased equipment that cost $35,000. The firm paid $5,000 cash and signed a long-term note payable for $30,000. Show the general journal entry to record this transaction.

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