QUIZ 2

•             Question 1
5 out of 5 points
               
                Which of the following is not a step in the accounting process?                                  
                Selected Answer:             Verify that revenues and expenses are equal.
                                               
•             Question 2
5 out of 5 points
               
                All of the following statements accurately describe the debt ratio except.                                             
                Selected Answer:             A relatively high ratio is always desirable.
                                               
•             Question 3
5 out of 5 points
               
                The process of transferring general journal entry information to the ledger is called:                                         
                Selected Answer:             Posting.
                                               
•             Question 4
0 out of 5 points
               
                At the end of its first month of operations, Michael’s Consulting Services reported net income of $25,000. They also had account balances of: Cash, $18,000; Office Supplies, $2,000 and Accounts Receivable $10,000. The sole stockholder’s total investment in exchange for common stock for this first month was $5,000. There were no dividends in the first month.

Calculate the amount of total equity to be reported on the balance sheet at the end of the month.                                           
                Selected Answer:             $5,000
                                               
•             Question 5
5 out of 5 points
               
                Happiness Catering has total assets of $385 million. Its total liabilities are $100 million and its equity is $285 million. Calculate its debt ratio.                                 
                Selected Answer:             26.0%.
                                               
•             Question 6
5 out of 5 points
               
                Identify the account below that impacts the Equity of a business:                                             
                Selected Answer:             Utilities Expense
                                               
•             Question 7
5 out of 5 points
               
                Identify the account below that is classified as an asset in a company's chart of accounts:                                              
                Selected Answer:             Accounts Receivable
                                               
•             Question 8
0 out of 5 points
               
                Identify the correct formula below used to calculate the debt ratio.                                          
                Selected Answer:             Total Liabilities/Total Equity.
                                               
•             Question 9
5 out of 5 points
               
                At the beginning of January of the current year, Little Mikey's Catering ledger reflected a normal balance of $52,000 for accounts receivable. During January, the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500. Additionally, during January one customer paid Mikey $5,000 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:                                   
                Selected Answer:             $49,700.
                                               
•             Question 10
0 out of 5 points
               
                A bookkeeper has debited an asset account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction:                                   
                Selected Answer:             Credit another asset account for $1,500.
                                               
•             Question 11
5 out of 5 points
               
                Asset accounts are decreased by debits.                               
                Selected Answer:             False
                                               
•             Question 12
5 out of 5 points
               
                The debt ratio is used:                                  
                Selected Answer:             To assess the risk associated with a company's use of liabilities.
                                               
•             Question 13
5 out of 5 points
               
                A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:                               
                Selected Answer:             T-account.
                                               
•             Question 14
5 out of 5 points
               
                If cash was incorrectly debited for $100 instead of correctly crediting it for $100, the cash account's balance will be overstated (too high).                                     
                Selected Answer:             True
                                               
•             Question 15
5 out of 5 points
               
                Paul’s Landscaping paid $500 on account for supplies purchased in the prior month. Which of the following general journal entries will Paul’s Landscaping make to record this transaction?                                 
                Selected Answer:             Debit Accounts payable, $500; credit Cash, $500.
                                               
•             Question 16
5 out of 5 points
               
                 An income statement is also called an earnings statement, a statement of operations or a profit and loss statement.                                         
                Selected Answer:             True
                                               
•             Question 17
5 out of 5 points
               
                Identify the account used by businesses to record the transfer of assets from a business to its stockholders:                                               
                Selected Answer:             The dividends account.
                                               
•             Question 18
5 out of 5 points
               
                The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?                                         
                Selected Answer:             The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400.
                                               
•             Question 19
5 out of 5 points
               
                Credits always increase account balances.                                            
                Selected Answer:             False
                                               
•             Question 20
5 out of 5 points
               
                Identify the statement below that is correct.                                       
                Selected Answer:             Promises of future payment by the customer are called accounts receivable.

                                                

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