Question 1

The _______________________ is a record containing all accounts used by a company.

Accepted Answer

General le...

Question 2

Credits always increase account balances.

Accepted Answer

A) True 
 B)False

Question 3

An income statement reports the revenues earned less expenses incurred by a business over a period of time.

Accepted Answer

A) True 
 B)False

Question 4

_________________ identify and describe transactions and events and provide objective evidence and amounts for recording.

Accepted Answer

The answer of _________________ identify and describe transactions and events...

Question 5

In a double-entry accounting system, the total amount debited must always equal the total amount credited.

Accepted Answer

A) True 
 B)False

Question 6

Items such as sales tickets, bank statements, checks, and purchase orders are source documents.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is incorrect?

Accepted Answer

A)   Higher financial leverage involves higher risk.
B)   Risk is higher if a company has more liabilities.
C)   Risk is higher if a company has higher assets.
D)   The debt ratio is one measure of financial risk.
E)   Lower financial leverage involves lower risk.F) C) and E)
G) A) and E)

Question 8

The 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 E)
G) B) and D)

Question 9

An account balance is the difference between the debits and credits for an account including any beginning balance.

Accepted Answer

A) True 
 B)False

Question 10

The debt ratio is calculated by dividing total assets by total liabilities.

Accepted Answer

A) True 
 B)False

Question 11

Increases in assets are _______________ to asset accounts, increases in liabilities are _______________ to liability accounts.

Accepted Answer

The answer of Increases in assets are _______________ to asset...

Question 12

___________________ are promises of payment from customers to sellers.

Accepted Answer

The answer of ___________________ are promises of payment from customers...

Question 13

Debits increase asset and expense accounts.

Accepted Answer

A) True 
 B)False

Question 14

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 15

When a company bills a customer for $600 for services rendered, the journal entry to record this transaction will include a $600 debit to Services Revenue.

Accepted Answer

A) True 
 B)False

Question 16

A list of all accounts and the identification number assigned to each account used by a company is called a:

Accepted Answer

A)   Source document.
B)   Journal.
C)   Trial balance.
D)   Chart of accounts.
E)   General Journal.F) B) and C)
G) A) and E)

Question 17

Explain how accounts are used in recording information about transactions.

Accepted Answer

Accounts are classified into three gener...

Question 18

____________________________ and _____________________ are the starting points for the analyzing and recording process.

Accepted Answer

Business t...

Question 19

A 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 with their debit balances at a point in time.
E)   A record containing all accounts and their balances used by a company.F) A) and E)
G) B) and E)

Question 20

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

Accepted Answer

The debt ratio is calculated by dividing...

Exam 2: Analyzing and Recording Transactions

_________________ identify and describe transactions and events and provide objective evidence and amounts for recording.

Correct AnswerverifiedShow Answer

Explain how accounts are used in recording information about transactions.

Correct AnswerverifiedAccounts are classified into three gener...View AnswerShow Answer

An income statement reports the revenues earned less expenses incurred by a business over a period of time.

Correct AnswerverifiedShow Answer

____________________________ and _____________________ are the starting points for the analyzing and recording process.

Correct AnswerverifiedBusiness t...View AnswerShow Answer

A ledger is:

Correct AnswerverifiedShow Answer

In a double-entry accounting system, the total amount debited must always equal the total amount credited.

Correct AnswerverifiedShow Answer

___________________ are promises of payment from customers to sellers.

Correct AnswerverifiedShow Answer

The debt ratio is calculated by dividing total assets by total liabilities.

Correct AnswerverifiedShow Answer

Credits always increase account balances.

Correct AnswerverifiedShow Answer

Debits increase asset and expense accounts.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe debt ratio is calculated by dividing...View AnswerShow Answer

When a company bills a customer for $600 for services rendered, the journal entry to record this transaction will include a $600 debit to Services Revenue.

Correct AnswerverifiedShow Answer

The _______________________ is a record containing all accounts used by a company.

Correct AnswerverifiedGeneral le...View AnswerShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

A list of all accounts and the identification number assigned to each account used by a company is called a:

Correct AnswerverifiedShow Answer

Items such as sales tickets, bank statements, checks, and purchase orders are source documents.

Correct AnswerverifiedShow Answer

The general journal provides a place for recording all of the following except:

Correct AnswerverifiedShow Answer

An account balance is the difference between the debits and credits for an account including any beginning balance.

Correct AnswerverifiedShow Answer

Increases in assets are _______________ to asset accounts, increases in liabilities are _______________ to liability accounts.

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

Correct Answer
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Accounts are classified into three gener...
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________ and _ are the starting points for the analyzing and recording process.

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Business t...
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The debt ratio is calculated by dividing...
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General le...
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Increases in assets are _ to asset accounts, increases in liabilities are _ to liability accounts.

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Correct Answer
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