FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 2: Analyzing and Recording Transactions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

True/False

Review LaterAdd Note

Review Later

If an owner's capital account had a $10,000 credit balance at the beginning of the period, and during the period, the owner invests an additional $5,000, the balance in the capital account listed on the trial balance will be equal to a debit balance of $5,000.

A) True
B) False

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

A law firm collected $1,800 for work to be performed in the following month. Which of the following general journal entries will the firm make to record this transaction?

A) Debit Cash, $1,800; credit Accounts Receivable, $1,800.
B) Debit Accounts Receivable, $1,800; credit Legal Fees Revenue, $1,800.
C) Debit Accounts Receivable, $1,800; credit Unearned Legal Fees Revenue, $1,800.
D) Debit Cash, $1,800; credit Unearned Legal Fees Revenue, $1,800.
E) Debit Legal Fees Revenue, $1,800; credit Accounts Receivable, $1,800.

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

Correct Answer

verified

Show Answer

Question 53

Multiple Choice

Review LaterAdd Note

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

A company's formal promise to pay (in the form of a promissory note) a future amount is a(n) :

Source documents identify and describe transactions and events entering the accounting process.

Owner withdrawals always decrease equity.

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. $\begin{array} { | l | l | l | l | } \hline & & \text { Yes } & \text { No } \\\hline \text { Ex. } & \text { Credit card } & & \text { X } \\\hline \text { a. } & \text { Credit card receipt } & & \\\hline \text { b. } & \text { Purchase order } & & \\\hline \text { c. } & \text { Invoice } & & \\\hline \text { d. } & \text { Balance sheet } & & \\\hline \text { e. } & \text { Bank statement } & & \\\hline \text { f. } & \text { Journal entry } & & \\\hline \text { g. } & \text { Telephone bill } & & \\\hline \text { h. } & \text { Employee earnings record } & & \\\hline\end{array}$

Unearned revenues refer to a(n) :

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

The process of transferring general journal entry information to the ledger is called:

J. Smith withdrew $100 from Jay's Limo Services for personal use. Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Expenses always decrease equity.

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.

Explain debits and credits and their role in the accounting system of a business.

Using the following list of accounts and identification letters A through J for Homer's Management Co., enter the type of account and its normal balance into the table below. The first item is filled in as an example: A. Homer, Capital F. Prepaid Rent B. Interest Payable G. Advertising Expense C. Land H. Unearned Rent Revenue D. Homer, Withdrawals I. Commissions Earned E. Fees Earned J. Notes Receivable

Owner's withdrawals are not reported on a business's income statement.

Joe Jackson opened Jackson's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books: Jackson invested $25,000 cash in the business. Jackson contributed $100,000 of equipment to the business. The company paid $2,000 cash to rent office space for the month of March. The company received $16,000 cash for repair services provided during March. The company paid $6,200 for salaries for the month of March. The company provided $3,000 of services to customers on account. The company paid cash of $500 for utilities for the month of March. The company received $3,100 cash in advance from a customer for repair services to be provided in April. Jackson withdrew $5,000 for his personal use from the company. Based on this information, net income for March would be:

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

An owner's withdrawal account normally has a debit balance.

Jackson Advertising Co. had assets of $475,000; liabilities of $275,500; and equity of $199,500. Calculate its debt ratio.