Question 1

ABC Company made a $2,500 payment on account, to satisfy a previously recorded account payable. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of ABC Company made a $2,500 payment on...

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) A) and E)

Question 3

Larry Bar opened a frame shop and completed these transactions: 1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock.
2)  Purchased $70 of office supplies on credit.
3)  Paid $1,200 cash for the receptionist's salary.
4)  Sold a custom frame service and collected $1,500 cash on the sale.
5)  Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

Accepted Answer

A)   $300.
B)   $41,500.
C)   $40,300.
D)   $38,500.
E)   $38,700.F) A) and E)
G) B) and C)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Indicate whether a debit or credit entry would be required to record the following changes in each account.
a. To decrease Cash
b. To increase Common Stock
c. To decrease Accounts Payable.
d. To increase Salaries Expense.
e. To decrease Supplies.
f. To increase Revenue.
g. To decrease Accounts Receivable.
h. To increase Dividends.

Accepted Answer

a. Credit, b. Credit...

Question 6

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 7

List the steps in processing transactions.

Accepted Answer

Business transactions and events are the...

Question 8

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).

Accepted Answer

A) True 
 B)False

Question 9

Gi Gi's Dance Studio provided $150 of dance instruction and rented out its dance studio to the same client for another $100. The client paid immediately. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Accepted Answer

A)     Rental Revenue 100 Instruction Revenue 150 Cash 250\begin{array}{|l|r|r|}\hline 	ext { Rental Revenue } & 100 & \\hline 	ext { Instruction Revenue } & 150 & \\hline 	ext { Cash } & & 250 \\hline\end{array} Rental Revenue  Instruction Revenue  Cash ​100150​250​​ 
B)     Accounts Payable 250 Rental Revenue 100 Instruction Revenue 150\begin{array}{|l|r|r|}\hline 	ext { Accounts Payable } & 250 & \\hline 	ext { Rental Revenue } & & 100 \\hline 	ext { Instruction Revenue } & & 150 \\hline\end{array} Accounts Payable  Rental Revenue  Instruction Revenue ​250​100150​​ 
C)     Cash 250 Rental Revenue 100 Instruction Revenue 150\begin{array}{|l|l|l|}\hline 	ext { Cash } & 250 & \\hline 	ext { Rental Revenue } & & 100 \\hline 	ext { Instruction Revenue } & & 150\end{array} Cash  Rental Revenue  Instruction Revenue ​250​100150​​ 
D)     Accounts Receivable 250 Rental Revenue 100 Instruction Revenue 150\begin{array} { | l | r | r | } \hline 	ext { Accounts Receivable } & 250 & \\hline 	ext { Rental Revenue } & & 100 \\hline 	ext { Instruction Revenue } & & 150 \\hline\end{array} Accounts Receivable  Rental Revenue  Instruction Revenue ​250​100150​​ 
E)     Unearned Revenue 250 Rental Revenue 100 Instruction Revenue 150\begin{array} { | l | r | r | } \hline 	ext { Unearned Revenue } & 250 & \\hline 	ext { Rental Revenue } & & 100 \\hline 	ext { Instruction Revenue } & & 150 \\hline\end{array} Unearned Revenue  Rental Revenue  Instruction Revenue ​250​100150​​F) C) and D)
G) B) and D)

Question 10

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 11

On a trial balance, if the Debit and Credit column totals are equal, then:

Accepted Answer

A)   All transactions have been recorded correctly.
B)   All entries from the journal have been posted to the ledger correctly.
C)   All ledger account balances are correct.
D)   Equal debits and credits have been recorded for transactions.
E)   The balance sheet would be correct.F) A) and B)
G) None of the above

Question 12

Prepaid accounts (also called prepaid expenses)  are generally:

Accepted Answer

A)   Payments made for products and services that never expire.
B)   Classified as liabilities on the balance sheet.
C)   Decreases in equity.
D)   Assets that represent prepayments of future expenses.
E)   Promises of payments by customers.F) B) and E)
G) A) and B)

Question 13

To increase an asset account, we would ________ it and to increase a liability account, we would________ it.

Accepted Answer

The answer of To increase an asset account, we would...

Question 14

Dividends paid to stockholders are a business expense.

Accepted Answer

A) True 
 B)False

Question 15

Lu Lu's Catering has a debt ratio equal to .3 and its competitor, Able's Bakery, has a debt ratio equal to .7. Determine the statement below that is correct.

Accepted Answer

A)   Able's Bakery has a smaller percentage of its assets financed with liabilities as compared to Lu Lu's.
B)   Able's Bakery's financial leverage is less than Lu Lu's.
C)   Able's Bakery's financial leverage is greater than Lu Lu's.
D)   Lu Lu's has a higher risk from its financial leverage.
E)   Higher financial leverage involves lower risk.F) D) and E)
G) C) and D)

Question 16

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Accepted Answer

A) True 
 B)False

Question 17

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

Accepted Answer

A)   A debit to an unearned revenue account.
B)   A debit to a prepaid expense account.
C)   A credit to an unearned revenue account.
D)   A credit to a prepaid expense account.
E)   No entry is required at the time of collection.F) A) and B)
G) B) and C)

Question 18

Golddigger Services, Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a:

Accepted Answer

A)   Debit to Unearned Management Fees for $60,000.
B)   Credit to Management Fees Earned for $60,000.
C)   Credit to Cash for $60,000.
D)   Credit to Unearned Management Fees for $60,000.
E)   Debit to Management Fees Earned for $60,000.F) None of the above
G) A) and B)

Question 19

Items such as sales tickets, bank statements, checks, and purchase orders are examples of a business's source documents.

Accepted Answer

A) True 
 B)False

Question 20

Crediting an expense account decreases it.

Accepted Answer

A) True 
 B)False

Exam 15: Analyzing for Business Transactions

Items such as sales tickets, bank statements, checks, and purchase orders are examples of a business's source documents.

Correct Answer
verified

Lu Lu's Catering has a debt ratio equal to .3 and its competitor, Able's Bakery, has a debt ratio equal to .7. Determine the statement below that is correct.

Correct Answer
verified

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

Correct Answer
verified

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 Answer
verified

Crediting an expense account decreases it.

Correct Answer
verified

Correct Answer
verified
a. Credit, b. Credit...
View Answer

Correct Answer
verified

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).

Correct Answer
verified

To increase an asset account, we would it and to increase a liability account, we would it.

Correct Answer
verified

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Correct Answer
verified

ABC Company made a $2,500 payment on account, to satisfy a previously recorded account payable. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct Answer
verified

A credit entry:

Correct Answer
verified

List the steps in processing transactions.

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

Gi Gi's Dance Studio provided $150 of dance instruction and rented out its dance studio to the same client for another $100. The client paid immediately. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Correct Answer
verified

Dividends paid to stockholders are a business expense.

Correct Answer
verified

Prepaid accounts (also called prepaid expenses) are generally:

Correct Answer
verified

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

Correct Answer
verified

Golddigger Services, Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a:

Correct Answer
verified

On a trial balance, if the Debit and Credit column totals are equal, then:

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

Exam 15: Analyzing for Business Transactions

Items such as sales tickets, bank statements, checks, and purchase orders are examples of a business's source documents.

Correct AnswerverifiedShow Answer

Lu Lu's Catering has a debt ratio equal to .3 and its competitor, Able's Bakery, has a debt ratio equal to .7. Determine the statement below that is correct.

Correct AnswerverifiedShow Answer

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

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

Crediting an expense account decreases it.

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Credit, b. Credit...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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).

Correct AnswerverifiedShow Answer

To increase an asset account, we would ________ it and to increase a liability account, we would________ it.

Correct AnswerverifiedShow Answer

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Correct AnswerverifiedShow Answer

ABC Company made a $2,500 payment on account, to satisfy a previously recorded account payable. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct AnswerverifiedShow Answer

A credit entry:

Correct AnswerverifiedShow Answer

List the steps in processing transactions.

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

Gi Gi's Dance Studio provided $150 of dance instruction and rented out its dance studio to the same client for another $100. The client paid immediately. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Correct AnswerverifiedShow Answer

Dividends paid to stockholders are a business expense.

Correct AnswerverifiedShow Answer

Prepaid accounts (also called prepaid expenses) are generally:

Correct AnswerverifiedShow Answer

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

Correct AnswerverifiedShow Answer

Golddigger Services, Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a:

Correct AnswerverifiedShow Answer

On a trial balance, if the Debit and Credit column totals are equal, then:

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

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
a. Credit, b. Credit...
View Answer

Correct Answer
verified

Correct Answer
verified

To increase an asset account, we would it and to increase a liability account, we would it.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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
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Correct Answer
verified

Correct Answer
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