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Exam 2: Analyzing and Recording Transactions

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Question 61

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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 62

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During the month of February,Hoffer Company had cash receipts of $7,500 and cash disbursements of $8,600.The February 28 cash balance was $1,800.What was the January 31 beginning cash balance?

A) $700
B) $1,100
C) $2,900
D) $0
E) $4,300

F) C) and E)
G) A) and D)

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Question 63

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The general ledger of a business

Match the following definitions and terms by placing the number that identifies the best definition in the blank space next to the term. -     An accounting system where the impact of each transaction is recorded in at least two accounts; the sum of the debits for each entry must equal its credits 

Match term to its definition

The balances for the accounts of Lance's Consulting Firm,Inc.for the year ended December 31 are shown below.Each account shown had a normal balance. $\begin{array} { l r l r } \text { Accounts payable } & \$ 6,400 & \text { Wages expense } & \$ 35,000 \\\text { Accounts receivable } & 7,000 & \text { Rent expense } & 5,000 \\\text { Cash } & 10,000 & \text { Retained Earnings } & 68,700 \\\text { Office Supplies } & 1,000 & \text { Land } & 53,000 \\\text { Building } & 99,000 & \text { Unearned Revenue } & 7,000 \\\text { Supplies expense } & 15,000 & \text { Dividends } & 20,000 \\\text { Consulting Revenue } & 150,000 & \text { Common Stock } & 12,900\end{array}$ Calculate Net Income.

IFRS requires that companies report four financial statements with explanatory notes: Balance Sheet; Income Statement; Statement of Changes in Equity and Statement of Cash Flows.

Posting is the transfer of the information from each journal entry to the ledger.

The third step in the analyzing and recording process is to post the information to _________________________.

Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.

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

If a company is highly leveraged,this means that it has relatively low risk of not being able to repay its debt.

The balances for the accounts of Lance's Consulting Firm,Inc.for the year ended December 31 are shown below.Each account shown had a normal balance. $\begin{array} { l r l r } \text { Accounts payable } & \$ 6,400 & \text { Wages expense } & \$ 35,000 \\\text { Accounts receivable } & 7,000 & \text { Rent expense } & 5,000 \\\text { Cash } & 10,000 & \text { Retained Earnings } & 68,700 \\\text { Office Supplies } & 1,000 & \text { Land } & 53,000 \\\text { Building } & 99,000 & \text { Unearned Revenue } & 7,000 \\\text { Supplies expense } & 15,000 & \text { Dividends } & 20,000 \\\text { Consulting Revenue } & 150,000 & \text { Common Stock } & 12,900\end{array}$ Calculate Total Assets.

At year-end,Harris Cleaning Service noted the following errors in its trial balance: It understated the total debits to the Cash account by $500 when computing the account balance. 1.A credit sale for $311 was recorded as a credit to the revenue account,but the offsetting debit was not posted. 2.A cash payment to a creditor for $2,600 was never recorded. 3.The $680 balance of the Prepaid Insurance account was listed in the credit column of the trial balance. 4.A $24,900 truck purchase for cash was recorded as a $24,090 debit to Vehicles and a $24,090 credit to Notes Payable. 5.A purchase of office supplies for $150 was recorded as a debit to Office Equipment.The offsetting credit entry was correct. 6.An additional investment of $4,000 by Del Harris was recorded as a debit to Common Stock and as a credit to Cash. 7.The cash payment of the $510 utility bill for December was recorded (but not paid)twice. 8.A revenue account balance of $79,817 was listed on the trial balance as $97,817. 9.A $1,000 cash dividend was recorded as a $100 debit to Dividends and $100 credit to cash. Using the form below,indicate whether each error would cause the trial balance to be out of balance,the amount of any imbalance and whether a correcting journal entry is required.

Match the following definitions and terms by placing the number that identifies the best definition in the blank space next to the term. -     The sources of accounting information. 

On February 5,Textron Stores purchased a van that had a cost of $35,000.The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance.Show the general journal entry to record this transaction.

The accounting process begins with:

Explain the recording and posting processes.

Which of the following statements is correct?

Which of the following statements are true?