Question 1

Crediting an expense account decreases it.

Accepted Answer

A) True 
 B)False

Question 2

A credit entry:

Accepted Answer

A)  Increases asset and expense accounts,and decreases liability,common stock,and revenue accounts.
B)  Is always a decrease in an account.
C)  Decreases asset and expense accounts,and increases liability,common stock,and revenue accounts.
D)  Is recorded on the left side of a T-account.
E)  Is always an increase in an account.F) A) and D)
G) C) and E)

Question 3

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

Accepted Answer

The answer of Based on the following trial balance for...

Question 4

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

Accepted Answer

A)  Journal.
B)  Posting.
C)  Trial balance.
D)  Account.
E)  Chart of accounts.F) B) and E)
G) B) and D)

Question 5

When a company provides services for which cash will not be received until some future date,the company should record the amount billed as accounts receivable.

Accepted Answer

A) True 
 B)False

Question 6

A debit is used to record which of the following:

Accepted Answer

A)  A decrease in an asset account.
B)  A decrease in an expense account.
C)  An increase in a revenue account.
D)  An increase in the common stock account.
E)  An increase in the dividends account.F) C) and E)
G) A) and E)

Question 7

Jeremy Consulting received $3,000 from a customer for services provided.Jeremy's general journal entry to record this transaction will be:

Accepted Answer

A)  Debit Services Revenue,credit Accounts Receivable.
B)  Debit Cash,credit Accounts Payable.
C)  Debit Cash,credit Accounts Receivable.
D)  Debit Cash,credit Services Revenue.
E)  Debit Accounts Payable,credit Services Revenue.F) A) and D)
G) None of the above

Question 8

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.

Accepted Answer

A)  $16,800.
B)  $15,800.
C)  $15,300.
D)  $10,300.
E)  $23,200.F) A) and E)
G) B) and D)

Question 9

The detail of individual revenue and expense accounts is reported on the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 10

At the beginning of the current year,Trenton 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 dividends of $5,000.There were no other changes in equity during the year and total assets at the end of the year were $260,000.Trenton 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)  1.42%.F) A) and B)
G) A) and D)

Question 11

A business paid $100 cash to Charles Nice (the sole stockholder)for his personal use.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of A business paid $100 cash to Charles...

Question 12

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 13

A revenue account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)  $1,100.
B)  $4,000.
C)  $8,500
D)  $10,400.
E)  $5,500.F) All of the above
G) B) and E)

Question 15

Aaliyah Turner opened Turner Photography on January 1 of the current year.During January,the following transactions occurred and were recorded in the company's books: 1.Aaliyah invested $13,500 cash in the business in exchange for common stock.
2.Aaliyah contributed $20,000 of photography equipment to the business in exchange for common stock.
3.The company paid $2,100 cash for an insurance policy covering the next 24 months.
4.The company received $5,700 cash for services provided during January.
5.The company purchased $6,200 of office equipment on credit.
6.The company provided $2,750 of services to customers on account.
7.The company paid cash of $1,500 for monthly rent.
8.The company paid $3,100 on the office equipment purchased in transaction #5 above.
9.Paid $275 cash for January utilities.
Based on this information,the amount of total stockholders' equity reported on the Balance Sheet at the end of the month would be:

Accepted Answer

A)  $31,400.
B)  $39,200.
C)  $31,150.
D)  $40,175.
E)  $30,875.F) All of the above
G) C) and D)

Question 16

The same four basic financial statements are prepared by both U.S.GAAP and IFRS.

Accepted Answer

A) True 
 B)False

Question 17

A company's ledger is:

Accepted Answer

A)  A record containing increases and decreases in a specific asset,liability,equity,revenue,or expense item.
B)  A journal in which transactions are first recorded.
C)  A collection of documents that describe transactions and events entering the accounting process.
D)  A list of all accounts a company uses with an assigned identification number.
E)  A record containing all accounts and their balances used by the company.F) B) and C)
G) D) and E)

Question 18

In a seller's accounting records,________ are promises of payment waiting to be received from customers.

Accepted Answer

The answer of In a seller's accounting records,________ are promises...

Question 19

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

Accepted Answer

A)  Accounts Payable; Cash; Supplies.
B)  Unearned Revenue; Accounts Payable; Dividends.
C)  Building; Prepaid Insurance; Supplies Expense.
D)  Cash; Prepaid Insurance; Equipment.
E)  Notes Payable; Cash; Dividends.F) None of the above
G) A) and B)

Question 20

A business's general journal provides a place for recording all of the following except:

Accepted Answer

A)  The transaction date.
B)  The names of the accounts involved.
C)  The amount of each debit and credit.
D)  An explanation of the transaction.
E)  The balance in each account.F) A) and B)
G) B) and E)

Exam 2: Financial Statements and the Accounting System

Crediting an expense account decreases it.

Correct Answer
verified

When a company provides services for which cash will not be received until some future date,the company should record the amount billed as accounts receivable.

Correct Answer
verified

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

Correct Answer
verified

A revenue account normally has a debit balance.

Correct Answer
verified

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.

Correct Answer
verified

The same four basic financial statements are prepared by both U.S.GAAP and IFRS.

Correct Answer
verified

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

Correct Answer
verified

A company's ledger is:

Correct Answer
verified

In a seller's accounting records,________ are promises of payment waiting to be received from customers.

Correct Answer
verified

Correct Answer
verified

Jeremy Consulting received $3,000 from a customer for services provided.Jeremy's general journal entry to record this transaction will be:

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

A business's general journal provides a place for recording all of the following except:

Correct Answer
verified

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 Answer
verified

A debit is used to record which of the following:

Correct Answer
verified

The detail of individual revenue and expense accounts is reported on the statement of retained earnings.

Correct Answer
verified

A credit entry:

Correct Answer
verified

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

Correct Answer
verified

A business paid $100 cash to Charles Nice (the sole stockholder)for his personal use.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct Answer
verified

Exam 2: Financial Statements and the Accounting System

Crediting an expense account decreases it.

Correct AnswerverifiedShow Answer

When a company provides services for which cash will not be received until some future date,the company should record the amount billed as accounts receivable.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A revenue account normally has a debit balance.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The same four basic financial statements are prepared by both U.S.GAAP and IFRS.

Correct AnswerverifiedShow Answer

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

Correct AnswerverifiedShow Answer

A company's ledger is:

Correct AnswerverifiedShow Answer

In a seller's accounting records,________ are promises of payment waiting to be received from customers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Jeremy Consulting received $3,000 from a customer for services provided.Jeremy's general journal entry to record this transaction will be:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A business's general journal provides a place for recording all of the following except:

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

A debit is used to record which of the following:

Correct AnswerverifiedShow Answer

The detail of individual revenue and expense accounts is reported on the statement of retained earnings.

Correct AnswerverifiedShow Answer

A credit entry:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A business paid $100 cash to Charles Nice (the sole stockholder)for his personal use.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct AnswerverifiedShow Answer

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