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Exam 2: Analyzing and Recording Transactions

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Question 71

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List the steps in recording transactions.

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1.Analyze each transaction and event fro...

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Question 72

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_____________________________ requires that each transaction affect,and be recorded in,at least two accounts.It also means that total amounts debited must equal total amounts credited for each transaction.

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Question 73

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Unearned revenues are liabilities.

A company sends a $1,500 bill to a customer for delivery services rendered.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

The difference between total debits and total credits for an account,including any beginning balance is the ________________________.

On January 1 of the current year,Bob's Lawn Care Service reported owner's capital totaling $122,500.During the current year,total revenues were $96,000 while total expenses were $85,500.Also,during the current year Bob withdrew $20,000 from the company.No other changes in equity occurred during the year.If,on December 31 of the current year,total assets are $196,000,the change in owner's capital during the year was:

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.

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

A ___________________ is a record containing all accounts for a company along with their balances.

Which of the following statements describing the debt ratio is false?

Hamilton Industries has liabilities of $105 million and total assets of $350 million.Its debt ratio is 40.0%.

An account is a record of increases and decreases in a specific asset,liability,equity,revenue,or expense item.

Prepaid expenses are:

The following accounts appear on either the Income Statement (IS)or Balance Sheet (BS).In the space provided next to each account write the letters,IS or BS,that identify the statement on which the account appears. ____ 1.Office Equipment ____ 2.Rent Expense ____ 3.Unearned Fees Revenues ____ 4.Rent Expense ____ 5.Accounts Payable ____ 6.Owner,Capital ____ 7.Fees Revenue ____ 8.Cash ____ 9.Notes Receivable ____ 10.Wages Payable

Krenz Car Care,owned and operated by Karl Krenz,began business in September of the current year.Karl,a master mechanic,had no experience with keeping a set of books.As a result,Karl entered all of September's transactions directly to the ledger accounts.When he tried to locate a particular entry he found it confusing and time consuming.He has hired you to improve his accounting procedures.The accounts in his General Ledger follow: Prepare the general journal entries,in chronological order (a)through (e),from the T-account entries shown.Include a brief description of the probable nature of each transaction.

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?

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

A trial balance that is in balance is proof that no errors were made in journalizing the transactions,posting to the ledger,and preparing the trial balance.

Stride Along has total assets of $425 million.Its total liabilities are $110 million.Its equity is $315 million.Calculate the debt ratio.

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