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Exam 2: Analyzing and Recording Transactions

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Question 71

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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.

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Question 72

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Jackson Consulting had the following accounts and balances at December 31: Using the information in the table,calculate Jackson Consulting's reported net income for the period.

A) $16,800
B) $15,800.
C) $15,300
D) $10,300.
E) $32,000

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

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Question 73

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A transaction that credits an asset account and credits a liability account must also affect one or more other accounts.

The debt ratio is calculated by dividing total assets by total liabilities.

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

The debt ratio is used:

Jarrod Automotive,owned and operated by Jarrod Johnson,began business in September of the current year.Jarrod,a mechanic,had no experience with recording business transactions.As a result,Jarrod entered all of September's transactions directly into the ledger accounts.When he tried to locate a particular entry he found it confusing and time consuming.He has hired you to improve his accounting procedures.The accounts in his General Ledger follow: Prepare the general journal entries,in chronological order (a)through (e),from the T-account entries shown.Include a brief description of the probable nature of each transaction.

Mary Martin,the owner of Martin Consulting,started the business by investing $40,000 cash.Identify the general journal entry below that Martin Consulting will make to record the transaction.

A debit entry is always an increase in the account.

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.

The heading on every financial statement lists the three W's-Who (the name of the business);What (the name of the statement);and Where (the organization's address).

Ralph Pine Consulting received its telephone bill in the amount of $300,and immediately paid it.Pine's general journal entry to record this transaction will include a

A transaction that decreases a liability and increases an asset must also affect one or more other accounts.

___________________ are promises of payment from customers to sellers.

A business's record of the increases and decreases in a specific asset,liability,equity,revenue,or expense is known as a(n) :

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

Happiness Catering has total assets of $385 million.Its total liabilities are $100 million and its equity is $285 million.Calculate its debt ratio.

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

A business uses a credit to record:

Unearned revenue is classified as a(an)_______________ on a business's balance sheet.