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Exam 3: The Double-Entry Accounting System

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Question 71

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Hough Company recorded a business event in these T-accounts: Which of the following choices accurately reflects how this event would affect the company's financial statements?

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Question 72

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Posting is the process of determining the balance in an account by subtracting debits and credits.

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Question 73

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Indicate whether each of the following statements is true or false. _____ a)In an accrual accounting system,a debit entry to Cash is never accompanied by a credit entry to Revenue. _____ b)The adjustment for accrued salaries would involve a debit to Salaries Expense and a credit to Salaries Payable. _____ c)Adjusting entries will always include either a debit to an expense account or a credit to a revenue account. _____ d)The closing entry for an expense involves a debit to Retained Earnings and a credit to the expense. _____ e)The closing entry for a revenue involves a debit to the revenue and a credit to Retained Earnings.

The Wagner Company issued common stock for $500,000 cash.Which of the following shows the proper entry using T-accounts?

Which is one effect of the following journal entry?

Double entry accounting requires that every entry must include at least one debit and at least one credit.

The Baker Company purchased $1,000 of supplies on account.After this transaction has been recorded in T-accounts,the $1,000 would appear

Adjusting entries are made at the end of the period because of the need to

What is financial leverage? What financial ratio can be increased by using financial leverage?

On October 1,2016,Sengal Company recorded a journal entry debiting prepaid rent and crediting cash for $1,200 in payment for one year of office rent.At December 31,2016,the financial statements should report:

At the end of its fiscal year,a company must adjust its accounting records for unrecorded accruals and deferrals before it can prepare financial statements.

Use the following information to answer questions At the end of 2016 the following information is available for Grumpy,Happy,and Doc Companies. -Which company has the highest level of debt risk?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -A transaction recorded as a debit to Cash and a credit to Accounts Receivable.

The difference between the debit and credit side of a T-account is known as the

Use the following information to answer questions -Select the true statement (note: an answer may be true even if it does not identify all accounts that appear on that particular financial statement) .

The right side of a T-account is known as the

Explain how the following general journal entry affects the accounting equation.

Calculating the debt to assets ratio measures how efficiently a company is using its assets in the normal scope of business.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -A transaction recorded as a debit to Dividends and a credit to Cash.

Levitt Company reports the following trial balance: Required: a)Draw T-accounts for Retained Earnings and all accounts to be closed.Post the account balances before closing and then the closing entries to the T-accounts. b)Prepare a post closing Trial Balance after the closing entries.