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Exam 2: Analyzing and Recording Transactions

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Question 61

True/False

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A company's chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

A) True
B) False

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Question 62

Multiple Choice

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A credit entry:

A) Increases asset and expense accounts,and decreases liability,owner's capital,and revenue accounts.
B) Is always a decrease in an account.
C) Decreases asset and expense accounts,and increases liability,owner's capital,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 B)
G) C) and E)

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Question 63

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The second step in the analyzing and recording process is to record the transactions and events in the book of original entry,called the ______________.

Identify the correct formula below used to calculate the debt ratio.

A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n) :

When a company provides services for which cash will not be received until some future date,the company should record the amount charged as accounts receivable.

A ____________ gives a complete record of each transaction in one place,and shows debits and credits for each transaction.

A company's list of accounts and the identification numbers assigned to each account is called a:

Transactions are recorded first in the ledger and then transferred to the journal.

A general journal gives a complete record of each transaction in one place,and shows the debits and credits for each transaction.

For each of the accounts in the following table (1)identify the type of account as an asset,liability,equity,revenue,or expense,and (2)identify the normal balance of the account.

A report that lists a business's accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n) :

A credit is used to record an increase in all of the following accounts except:

A general journal is:

The balance column in a ledger account is:

Identify the statement below that is true.

After preparing an (unadjusted)trial balance at year-end,R.Chang of Chang Window Company discovered the following errors: 1.Cash payment of the $225 telephone bill for December was recorded twice. 2.Cash payment of a note payable was recorded as a debit to Cash and a debit to Notes Payable for $1,000. 3.A $900 cash withdrawal by the owner was recorded to the correct accounts as $90. 4.An additional investment of $5,000 cash by the owner was recorded as a debit to R,Chang,Capital and a credit to Cash. 5.A credit purchase of office equipment for $1,800 was recorded as a debit to the Office Equipment account with no offsetting credit entry. Using the form below,indicate whether the error would cause the trial balance to be out of balance by placing an X in either the yes or no column.Would the error cause the trial balance to be out of balance? Would the error cause the trial balance to be out of balance?

A customer's promise to pay on credit is classified as an account payable by the seller.

Rowdy Bolton began Bolton Office Services in October and during that month completed these transactions: a.Invested $10,000 cash,and $15,000 of computer equipment. b.Paid $500 cash for an insurance premium covering the next 12 months. c.Completed a word processing assignment for a customer and collected $1,000 cash. d.Paid $200 cash for office supplies. e.Paid $2,000 for October's rent. Prepare journal entries to record the above transactions.Explanations are unnecessary.

Identify the statement below that is incorrect.