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Exam 15: Basic Accounting for Transactions

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Question 91

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The general ledger of a business

A) Is a collection of all accounts used in a company's information system.
B) Must be kept in a computer file.
C) Is also called the book of original entry.
D) Is not affected by a company's size and diversity.
E) Is one of the four financial statements.

F) A) and B)
G) C) and D)

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Question 92

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Explain the debt ratio and its use in analyzing a company's financial condition.

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The debt ratio is calculated by dividing...

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Question 93

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An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

A collection of all accounts (with account balances) used by a business is called a:

A company failed to post a $50 debit to the Office Supplies account.The effect of this error will be that:

David Roberts is a real estate appraiser.Shown below are (a)several accounts in his ledger with each account preceded by an identification number and (b)several transactions completed by Roberts.Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.

If the Debit and Credit column totals of a trial balance are equal, then:

If a company pays cash to purchase land, the journal entry to record this transaction will include a debit to Cash.

Wisconsin Rentals purchased office supplies on credit.The journal entry made by Wisconsin Rentals to record this transaction will include a:

What is another name for the general journal?

Dividends are a type of business expense.

A credit entry:

On October 1, 2011, Smith invested $20,000 cash, office equipment costing $15,000, and drafting equipment costing $12,000 into the company in exchange for common stock.Show the general journal entry to record this transaction.

If a company provides services to a customer on credit, the service provider company should credit Accounts Receivable.

On November 30, a company had an Accounts Receivable balance of $5,100.During the month of December, total credits to Accounts Receivable were $76,000 from customer payments.The December 31 Accounts Receivable balance was $43,000.What was the amount of credit sales during December?

On December 3, the Matador Company paid $5,400 cash in salaries to office personnel.Prepare the general journal entry to record this transaction.

Robert Haddon contributed $70,000 in cash and some land worth $130,000 to open a new business, RH Consulting.Which of the following general journal entries will RH Consulting make to record this transaction?

A trial balance that is in balance is proof that no errors were made in journalizing the transactions, posting to the ledger, and preparing the trial balance.

___________________ is a promise of payment from customers to sellers.

A trial balance that balances is not proof of complete accuracy in recording transactions.