Question 1

An owner's withdrawal account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 2

Owner's withdrawals are not reported on a business's income statement.

Accepted Answer

A) True 
 B)False

Question 3

Unearned revenues refer to a(n) :

Accepted Answer

A)   Expense incurred because a customer has paid in advance.
B)   Increase in revenues as a result of delivering products or services to a customer.
C)   Liability that is settled in the future when a company delivers its products or services.
D)   Decrease in an asset.
E)   Asset that will be used over time.F) A) and B)
G) All of the above

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)   28.5%.
B)   26.0%.
C)   58.8%.
D)   38.5%.
E)   35.1%.F) None of the above
G) B) and D)

Question 5

If an owner's capital account had a $10,000 credit balance at the beginning of the period, and during the period, the owner invests an additional $5,000, the balance in the capital account listed on the trial balance will be equal to a debit balance of $5,000.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)   Journal.
B)   Trial balance.
C)   Ledger.
D)   Account balance.
E)   Cash account.F) None of the above
G) A) and E)

Question 7

J. Smith withdrew $100 from Jay's Limo Services for personal use. Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Accepted Answer

A)     J. Smith, Capital 100 J. Smith, Withdrawals 100\begin{array} { | l | r | r | } \hline 	ext { J. Smith, Capital } & 100 & \\hline 	ext { J. Smith, Withdrawals } & & 100 \\hline\end{array} J. Smith, Capital  J. Smith, Withdrawals ​100​100​​ 
B)     J. Smith, Withdrawals 100 J. Smith, Capital 100\begin{array} { | l | r | r | } \hline 	ext { J. Smith, Withdrawals } & 100 & \\hline 	ext { J. Smith, Capital } & & 100 \\hline\end{array} J. Smith, Withdrawals  J. Smith, Capital ​100​100​​ 
C)     Cash 100 J. Smith. Withdrawals 100\begin{array} { | l | r | r | } \hline 	ext { Cash } & 100 & \\hline 	ext { J. Smith. Withdrawals } & & 100 \\hline\end{array} Cash  J. Smith. Withdrawals ​100​100​​ 
D)     Cash 100 J. Smith, Capital 100\begin{array} { | l | r | r | } \hline 	ext { Cash } & 100 & \\hline 	ext { J. Smith, Capital } & & 100 \\hline\end{array} Cash  J. Smith, Capital ​100​100​​ 
E)     J. Smith. Withdrawals 100 Cash 100\begin{array} { | l | r | r | } \hline 	ext { J. Smith. Withdrawals } & 100 & \\hline 	ext { Cash } & & 100 \\hline\end{array} J. Smith. Withdrawals  Cash ​100​100​​F) A) and B)
G) All of the above

Question 8

Source documents identify and describe transactions and events entering the accounting process.

Accepted Answer

A) True 
 B)False

Question 9

Expenses always decrease equity.

Accepted Answer

A) True 
 B)False

Question 10

A company's formal promise to pay (in the form of a promissory note)  a future amount is a(n) :

Accepted Answer

A)   Account receivable.
B)   Unearned revenue.
C)   Note payable.
D)   Prepaid expense.
E)   Credit account.F) B) and E)
G) A) and B)

Question 11

Using the following list of accounts and identification letters A through J for Homer's Management Co., enter the type of account and its normal balance into the table below. The first item is filled in as an example:
A. Homer, Capital F. Prepaid Rent
B. Interest Payable G. Advertising Expense
C. Land H. Unearned Rent Revenue
D. Homer, Withdrawals I. Commissions Earned
E. Fees Earned J. Notes Receivable

Accepted Answer

The answer of Using the following list of accounts and...

Question 12

A law firm collected $1,800 for work to be performed in the following month. Which of the following general journal entries will the firm make to record this transaction?

Accepted Answer

A)   Debit Cash, $1,800; credit Accounts Receivable, $1,800.
B)   Debit Accounts Receivable, $1,800; credit Legal Fees Revenue, $1,800.
C)   Debit Accounts Receivable, $1,800; credit Unearned Legal Fees Revenue, $1,800.
D)   Debit Cash, $1,800; credit Unearned Legal Fees Revenue, $1,800.
E)   Debit Legal Fees Revenue, $1,800; credit Accounts Receivable, $1,800.F) A) and B)
G) None of the above

Question 13

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

Accepted Answer

A) True 
 B)False

Question 14

Owner withdrawals always decrease equity.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Identify by marking an X in the appropriate column, whether each of the following items would likely serve as a source document. The first one is done as an example.
 $$\begin{array} { | l | l | l | l | } 
\hline & & \text { Yes } & \text { No } \
\hline \text { Ex. } & \text { Credit card } & & \text { X } \
\hline \text { a. } & \text { Credit card receipt } & & \
\hline \text { b. } & \text { Purchase order } & & \
\hline \text { c. } & \text { Invoice } & & \
\hline \text { d. } & \text { Balance sheet } & & \
\hline \text { e. } & \text { Bank statement } & & \
\hline \text { f. } & \text { Journal entry } & & \
\hline \text { g. } & \text { Telephone bill } & & \
\hline \text { h. } & \text { Employee earnings record } & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | l | l | }
\...

Question 17

The process of transferring general journal entry information to the ledger is called:

Accepted Answer

A)   Journalizing.
B)   Double-entry accounting.
C)   Balancing.
D)   Posting.
E)   Balancing an account.F) B) and E)
G) A) and B)

Question 18

Joe Jackson opened Jackson's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books: Jackson invested $25,000 cash in the business.

Jackson contributed $100,000 of equipment to the business.
The company paid $2,000 cash to rent office space for the month of March. The company received $16,000 cash for repair services provided during March. The company paid $6,200 for salaries for the month of March.
The company provided $3,000 of services to customers on account. The company paid cash of $500 for utilities for the month of March.
  The company received $3,100 cash in advance from a customer for repair services to be provided in April.
Jackson withdrew $5,000 for his personal use from the company.
Based on this information, net income for March would be:

Accepted Answer

A)   $8,400.
B)   $13,500.
C)   $5,300.
D)   $13,400.
E)   $10,300.F) C) and D)
G) A) and E)

Question 19

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 20

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...

Exam 2: Analyzing and Recording Transactions

Correct Answer
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View Answer

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

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

Expenses always decrease equity.

Correct Answer
verified

An owner's withdrawal account normally has a debit balance.

Correct Answer
verified

Correct Answer
verified

Owner withdrawals always decrease equity.

Correct Answer
verified

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

J. Smith withdrew $100 from Jay's Limo Services for personal use. Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Correct Answer
verified

If an owner's capital account had a $10,000 credit balance at the beginning of the period, and during the period, the owner invests an additional $5,000, the balance in the capital account listed on the trial balance will be equal to a debit balance of $5,000.

Correct Answer
verified

A company's formal promise to pay (in the form of a promissory note) a future amount is a(n) :

Correct Answer
verified

Owner's withdrawals are not reported on a business's income statement.

Correct Answer
verified

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

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

Correct Answer
verified

Unearned revenues refer to a(n) :

Correct Answer
verified

A law firm collected $1,800 for work to be performed in the following month. Which of the following general journal entries will the firm make to record this transaction?

Correct Answer
verified

Source documents identify and describe transactions and events entering the accounting process.

Correct Answer
verified

The process of transferring general journal entry information to the ledger is called:

Correct Answer
verified

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

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

Exam 2: Analyzing and Recording Transactions

Correct Answerverified\[\begin{array} { | l | l | l | l | } \...View AnswerShow 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

Expenses always decrease equity.

Correct AnswerverifiedShow Answer

An owner's withdrawal account normally has a debit balance.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Owner withdrawals always decrease equity.

Correct AnswerverifiedShow Answer

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

J. Smith withdrew $100 from Jay's Limo Services for personal use. Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Correct AnswerverifiedShow Answer

If an owner's capital account had a $10,000 credit balance at the beginning of the period, and during the period, the owner invests an additional $5,000, the balance in the capital account listed on the trial balance will be equal to a debit balance of $5,000.

Correct AnswerverifiedShow Answer

A company's formal promise to pay (in the form of a promissory note) a future amount is a(n) :

Correct AnswerverifiedShow Answer

Owner's withdrawals are not reported on a business's income statement.

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

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

Correct AnswerverifiedShow Answer

Unearned revenues refer to a(n) :

Correct AnswerverifiedShow Answer

A law firm collected $1,800 for work to be performed in the following month. Which of the following general journal entries will the firm make to record this transaction?

Correct AnswerverifiedShow Answer

Source documents identify and describe transactions and events entering the accounting process.

Correct AnswerverifiedShow Answer

The process of transferring general journal entry information to the ledger is called:

Correct AnswerverifiedShow Answer

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

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

Correct Answer
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Debt Ratio = Total L...
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Debit refers to the left side of an acco...
View Answer

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

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