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Exam 2: Financial Statements and the Accounting System

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Question 41

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________ and ________ are the starting points for the analyzing and recording process.

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Question 42

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The ________ is a record containing all accounts used by a company as well as the transactions and ending balances of each of the accounts.

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Question 43

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Revenues and expenses are two categories of ________ accounts.

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

Based on the following trial balance for Sally's Salon,prepare an income statement,statement of retained earnings,and a balance sheet.Sally Crawford,the sole stockholder,made no additional investments in the company during the year.

Larry Matt completed these transactions during December of the current year: Prepare general journal entries to record these transactions.

Identify the account below that impacts the Equity of a business:

Identify the statement below that is correct.

Identify the account used by businesses to record the transfer of assets from a business to its stockholders:

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

During the month of March,Harley's Computer Services made purchases on account totaling $43,500.Also during the month of March,Harley was paid $8,000 by a customer for services to be provided in the future and paid $36,900 of cash on its accounts payable balance.If the balance in the accounts payable account at the beginning of March was $77,300,what is the balance in accounts payable at the end of March?

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.)

The second step in the analyzing and recording process is to record the transactions and events in the book of original entry,called the ________.

Benjamin Stone opened Stone's Repairs on March 1 of the current year.During March,the following transactions occurred and were recorded in the company's books: 1.Benjamin,the sole stockholder,invested $25,000 cash in the business in exchange for common stock. 2.Benjamin contributed $100,000 of equipment to the business in exchange for common stock. 3.The company paid $2,000 cash to rent office space for the month of March. 4.The company received $16,000 cash for repair services provided during March. 5.The company paid $6,200 for salaries for the month of March. 6.The company provided $3,000 of services to customers on account. 7.The company paid cash of $500 for utilities for the month of March. 8.The company received $3,100 cash in advance from a customer for repair services to be provided in April. 9.The company paid Benjamin $5,000 cash as a dividend. Based on this information,total stockholder's equity reported on the balance sheet at the end of March would be:

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

If cash is received from customers in payment for products or services that have not yet been delivered to the customers,the business would record the cash receipt as:

The higher a company's debt ratio,the lower the risk of a company not being able to meet its obligations.

The financial statement that summarizes the changes in the retained earnings account is called the balance sheet.

J.Smith,the sole stockholder,received a $100 dividend from Jay's Limo Services.Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Larry Bar opened a frame shop and completed these transactions: 1.Larry started the shop by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock. 2.Purchased $70 of office supplies on credit. 3.Paid $1,200 cash for the receptionist's salary. 4.Sold a custom frame service and collected $1,500 cash on the sale. 5.Completed framing services and billed the client $200. What was the balance of the cash account after these transactions were posted?