Question 1

A balance column ledger account is:

Accepted Answer

A)  An account entered on the balance sheet.
B)  An account with debit and credit columns for posting entries and another column for showing the balance of the account after each entry is posted.
C)  Another name for the withdrawals account.
D)  An account used to record the transfers of assets from a business to its owner.
E)  A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.

Question 2

A simple account form widely used in accounting as a tool to understand how debits and credits affect an account balance is called a:

Accepted Answer

A)  Withdrawals account.
B)  Capital account.
C)  Drawing account.
D)  T-account.
E)  Balance column sheet.

Question 3

A credit is used to record:

Accepted Answer

A)  An increase in an expense account.
B)  A decrease in an asset account.
C)  A decrease in an unearned revenue account.
D)  A decrease in a revenue account.
E)  A decrease in a capital account.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Withdrawals by the owner are a business expense.

Accepted Answer

A) True 
 B)False

Question 6

If Tim Jones,the owner of Jones Hardware proprietorship,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 Tim Jones, Salary and credit Cash.
C)  Debit Cash and credit Tim Jones, Withdrawals.
D)  Debit Tim Jones, Withdrawals and credit Cash.
E)  Debit Automobiles and credit Cash.

Question 7

List the steps in processing transactions.

Accepted Answer

Business transactions and events are the...

Question 8

A customer's promise to pay is called an account payable to the seller.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is incorrect?

Accepted Answer

A)  Higher financial leverage involves higher risk.
B)  Risk is higher if a company has more liabilities.
C)  Risk is higher if a company has higher assets.
D)  The debt ratio is one measure of financial risk.
E)  Lower financial leverage involves lower risk.

Question 10

Which of the following statements is incorrect?

Accepted Answer

A)  The normal balance of accounts receivable is a debit.
B)  The normal balance of owner's withdrawals is a debit.
C)  The normal balance of unearned revenues is a credit.
D)  The normal balance of an expense account is a credit.
E)  The normal balance of the owner's capital account is a credit.

Question 11

At the beginning of the current year,Taunton Company's total assets were $248,000 and its total liabilities were $175,000.During the year,the company reported total revenues of $93,000,total expenses of $76,000 and owner withdrawals of $5,000.There were no other changes in owner's capital during the year and total assets at the end of the year were $260,000.Taunton Company's debt ratio at the end of the current year is:

Accepted Answer

A)  70.6%.
B)  67.3%.
C)  32.7%.
D)  48.6%.
E)  Cannot be determined from the information provided.

Question 12

An account balance is:

Accepted Answer

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)  Assets = liabilities + equity.
E)  Always a credit.

Question 13

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

Accepted Answer

A)  Income statement.
B)  Balance sheet.
C)  Statement of owner's equity.
D)  Cash flow statement.
E)  Trial balance.

Question 14

A report that lists accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n) :

Accepted Answer

A)  Account balance.
B)  Trial balance.
C)  Ledger.
D)  Chart of accounts.
E)  General Journal.

Question 15

Flora Accounting Services completed these transactions in February:
a.Purchased office supplies on account,$300.
b.Completed work for a client on credit,$500.
c.Paid cash for the office supplies purchased in (a).
d.Completed work for a client and received $800 cash.
e.Received $500 cash for the work described in (b).
f.Received $1,000 from a client for accounting services to be performed in March.
Prepare journal entries to record the above transactions.Explanations are not necessary.

Accepted Answer

The answer of Flora Accounting Services completed these transactions in...

Question 16

Both U.S.GAAP and IFRS prepare the same four basic financial statements.

Accepted Answer

A) True 
 B)False

Question 17

The balances for the accounts of Mike's Maintenance Co.for the year ended December 31 are shown below.Each account shown had a normal balance.
  Calculate the correct balance for Cash and prepare a trial balance.

Accepted Answer

The answer of The balances for the accounts of Mike's...

Question 18

James Haley owned a sailboat and was tired of his current job.He decided to open a business that provides day sails to tourists in his hometown.Prepare journal entries to record the following transactions.

Accepted Answer

The answer of James Haley owned a sailboat and was...

Question 19

Describe source documents and their purpose.

Accepted Answer

Source documents are the sources of info...

Question 20

A company had the following accounts and balances year-end:
 If all of the accounts have normal balances,what are the totals for the trial balance?

Accepted Answer

A)  $ 45,200.
B)  $ 67,000.
C)  $104,800.
D)  $209,600.
E)  $186,600.

Exam 2: Analyzing and Recording Transactions

List the steps in processing transactions.

Correct Answer
verified
Business transactions and events are the...
View Answer

A credit is used to record:

Correct Answer
verified

A report that lists accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n) :

Correct Answer
verified

A simple account form widely used in accounting as a tool to understand how debits and credits affect an account balance is called a:

Correct Answer
verified

A company had the following accounts and balances year-end: If all of the accounts have normal balances,what are the totals for the trial balance?

Correct Answer
verified

Correct Answer
verified

An account balance is:

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements is incorrect?

Correct Answer
verified

The balances for the accounts of Mike's Maintenance Co.for the year ended December 31 are shown below.Each account shown had a normal balance. Calculate the correct balance for Cash and prepare a trial balance.

Correct Answer
verified

Which of the following statements is incorrect?

Correct Answer
verified

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

Correct Answer
verified

Describe source documents and their purpose.

Correct Answer
verified
Source documents are the sources of info...
View Answer

Withdrawals by the owner are a business expense.

Correct Answer
verified

If Tim Jones,the owner of Jones Hardware proprietorship,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

Both U.S.GAAP and IFRS prepare the same four basic financial statements.

Correct Answer
verified

James Haley owned a sailboat and was tired of his current job.He decided to open a business that provides day sails to tourists in his hometown.Prepare journal entries to record the following transactions.

Correct Answer
verified

A balance column ledger account is:

Correct Answer
verified

A customer's promise to pay is called an account payable to the seller.

Correct Answer
verified

Exam 2: Analyzing and Recording Transactions

List the steps in processing transactions.

Correct AnswerverifiedBusiness transactions and events are the...View AnswerShow Answer

A credit is used to record:

Correct AnswerverifiedShow Answer

A report that lists accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n) :

Correct AnswerverifiedShow Answer

A simple account form widely used in accounting as a tool to understand how debits and credits affect an account balance is called a:

Correct AnswerverifiedShow Answer

A company had the following accounts and balances year-end: If all of the accounts have normal balances,what are the totals for the trial balance?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An account balance is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

The balances for the accounts of Mike's Maintenance Co.for the year ended December 31 are shown below.Each account shown had a normal balance. Calculate the correct balance for Cash and prepare a trial balance.

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Describe source documents and their purpose.

Correct AnswerverifiedSource documents are the sources of info...View AnswerShow Answer

Withdrawals by the owner are a business expense.

Correct AnswerverifiedShow Answer

If Tim Jones,the owner of Jones Hardware proprietorship,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

Both U.S.GAAP and IFRS prepare the same four basic financial statements.

Correct AnswerverifiedShow Answer

James Haley owned a sailboat and was tired of his current job.He decided to open a business that provides day sails to tourists in his hometown.Prepare journal entries to record the following transactions.

Correct AnswerverifiedShow Answer

A balance column ledger account is:

Correct AnswerverifiedShow Answer

A customer's promise to pay is called an account payable to the seller.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Business transactions and events are the...
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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Source documents are the sources of info...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified