Question 1

All of the following statements accurately describe the debt ratio except.

Accepted Answer

A)  It is use to both internal and external users of accounting information.
B)  A relatively high ratio is always desirable.
C)  The dividing line for a high and low ratio varies from industry to industry.
D)  Many factors such as a company's age, stability, profitability and cash flow influence the determination of what would be interpreted as a high versus a low ratio.
E)  The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt.F) C) and D)
G) A) and D)

Question 2

A general journal gives a complete record of each transaction in one place, and shows the debits and credits for each transaction.

Accepted Answer

A) True 
 B)False

Question 3

Identify the account below that is classified as a liability in a company's chart of accounts:

Accepted Answer

A)  Cash
B)  Unearned Revenue
C)  Salaries Expense
D)  Accounts Receivable
E)  SuppliesF) None of the above
G) B) and E)

Question 4

Select the account below that normally has a credit balance.

Accepted Answer

A)  Cash.
B)  Office Equipment.
C)  Wages Payable.
D)  Dividends.
E)  Sales Salaries Expense.F) A) and B)
G) A) and C)

Question 5

A _______________ is a list of all the accounts used by a company and their identification codes but does not contain the balances.

Accepted Answer

The answer of A _______________ is a list of all...

Question 6

Identify the item below that would cause the trial balance to not balance.

Accepted Answer

A)  A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash.
B)  The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable.
C)  A $50 cash receipt for the performance of a service was not recorded at all.
D)  The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200.
E)  The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750.F) A) and B)
G) A) and C)

Question 7

A company's chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

Accepted Answer

A) True 
 B)False

Question 8

At a given point in time, a business's trial balance is a list of all of its general ledger accounts and their balances.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Unearned revenues are classified as liabilities.

Accepted Answer

A) True 
 B)False

Question 11

A debit entry is always an increase in the account.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)  Cash
B)  Accounts Payable
C)  Salaries Expense
D)  Common Stock
E)  EquipmentF) A) and B)
G) A) and C)

Question 13

Asset accounts are normally decreased by debits.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are asset accounts except:

Accepted Answer

A)  Accounts Receivable.
B)  Buildings.
C)  Supplies expense.
D)  Equipment.
E)  Prepaid insurance.F) B) and E)
G) A) and C)

Question 15

Source documents provide evidence of business transactions and are the basis for accounting entries.

Accepted Answer

A) True 
 B)False

Question 16

Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately. Which of the following general journal entries will Wiley Consulting make to record this transaction?

Accepted Answer

A)    Accounts Payable 7,000 Supplies 7,000\begin{array} { | l | r | r | } \hline 	ext { Accounts Payable } & 7,000 & \\hline 	ext { Supplies } & & 7,000 \\hline \hline\end{array} Accounts Payable  Supplies ​7,000​7,000​​ 
B)    Cash 7,000 Supplies 7,000\begin{array} { | l | r | r | } \hline 	ext { Cash } & 7,000 & \\hline 	ext { Supplies } & & 7,000 \\hline\end{array} Cash  Supplies ​7,000​7,000​​ 
C)    Supplies 7,000 Cash 7,000\begin{array} { | c | r | r | } \hline 	ext { Supplies } & 7,000 & \\hline 	ext { Cash } & & 7,000 \\hline\end{array} Supplies  Cash ​7,000​7,000​​ 
D)    Supplies 7,000 Accounts Payable 7,000\begin{array} { | l | r | r | } \hline 	ext { Supplies } & 7,000 & \\hline 	ext { Accounts Payable } & & 7,000 \\hline \hline\end{array} Supplies  Accounts Payable ​7,000​7,000​​ 
E)    Supplies Expense 7,000 Accounts Payable 7,000\begin{array} { | l | r | r | } \hline 	ext { Supplies Expense } & 7,000 & \\hline 	ext { Accounts Payable } & & 7,000 \\hline\end{array} Supplies Expense  Accounts Payable ​7,000​7,000​​F) A) and D)
G) D) and E)

Question 17

A ____________ gives a complete record of each transaction in one place, and shows debits and credits for each transaction.

Accepted Answer

The answer of A ____________ gives a complete record of...

Question 18

A debit is used to record an increase in all of the following accounts except:

Accepted Answer

A)  Supplies
B)  Cash
C)  Accounts Payable
D)  Dividends
E)  Prepaid InsuranceF) D) and E)
G) A) and E)

Question 19

When a company bills a customer for $700 for services rendered, the journal entry to record this transaction will include a $700 debit to Services Revenue.

Accepted Answer

A) True 
 B)False

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: Accounting for Business Transactions

Source documents provide evidence of business transactions and are the basis for accounting entries.

Correct AnswerverifiedShow Answer

When a company bills a customer for $700 for services rendered, the journal entry to record this transaction will include a $700 debit to Services Revenue.

Correct AnswerverifiedShow Answer

A company's chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Identify the item below that would cause the trial balance to not balance.

Correct AnswerverifiedShow Answer

A debit entry is always an increase in the account.

Correct AnswerverifiedShow Answer

A _______________ is a list of all the accounts used by a company and their identification codes but does not contain the balances.

Correct AnswerverifiedShow Answer

At a given point in time, a business's trial balance is a list of all of its general ledger accounts and their balances.

Correct AnswerverifiedShow Answer

All of the following are asset accounts except:

Correct AnswerverifiedShow Answer

All of the following statements accurately describe the debt ratio except.

Correct AnswerverifiedShow Answer

A debit is used to record an increase in all of the following accounts except:

Correct AnswerverifiedShow Answer

Identify the account below that is classified as a liability in a company's chart of accounts:

Correct AnswerverifiedShow Answer

Unearned revenues are classified as liabilities.

Correct AnswerverifiedShow Answer

A general journal gives a complete record of each transaction in one place, and shows the debits and credits for each transaction.

Correct AnswerverifiedShow Answer

A ____________ gives a complete record of each transaction in one place, and shows debits and credits for each transaction.

Correct AnswerverifiedShow Answer

Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately. Which of the following general journal entries will Wiley Consulting make to record this transaction?

Correct AnswerverifiedShow Answer

Select the account below that normally has a credit balance.

Correct AnswerverifiedShow Answer

Asset accounts are normally decreased by debits.

Correct AnswerverifiedShow 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

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

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

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