Question 1

Musical Instruments,Inc.sells musical instruments.On December 31,2019,after its first month of business,Musical Instruments,Inc.had the following balances in its accounts,listed alphabetically.
  
Determine the balance in the cash account and prepare the trial balance.

Accepted Answer

The cash balance is the differ...

Question 2

For each transaction,identify which account is debited and which account is credited.Use proper account titles.

Accepted Answer

The answer of For each transaction,identify which account is debited...

Question 3

Which of the following accounts decreases with a debit?

Accepted Answer

A)  Accounts Receivable
B)  Notes Payable
C)  Cash
D)  Rent Expense

Question 4

An account that normally has a debit balance may occasionally have a credit balance.

Accepted Answer

A) True 
 B)False

Question 5

A compound journal entry has more than two accounts,but the total dollar value of the debits still must equal the total dollar value of the credits.

Accepted Answer

A) True 
 B)False

Question 6

The debt ratio shows the proportion of assets financed with debt.

Accepted Answer

A) True 
 B)False

Question 7

Both the chart of accounts and the ledger ________.

Accepted Answer

A)  provide the balance of each account at a specific point in time
B)  list the account names and numbers of the business
C)  fulfill the task of showing all of the increases and decreases in each account
D)  All of the statements are correct.

Question 8

Baytown Paper Company has a debt ratio of 25%,which means that 75% of the assets are financed by creditors.

Accepted Answer

A) True 
 B)False

Question 9

Which one of the following account groups normally has a credit balance?

Accepted Answer

A)  assets and liabilities
B)  equity and assets
C)  liabilities and revenues
D)  assets and expenses

Question 10

An account is a detailed record of all increases and decreases that have occurred in an individual asset,liability,or equity during a specific period.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following journal entries would be recorded if a business purchased $800 of office supplies on account?

Accepted Answer

A)  
B)  
C)  
D)

Question 12

The account title used for recording a written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is ________.

Accepted Answer

A)  Prepaid Note
B)  Notes Payable
C)  Notes Receivable
D)  Accounts Receivable

Question 13

Explain the difference between Accounts Receivable and Accounts Payable.

Accepted Answer

Accounts Receivable is an asset account ...

Question 14

Common Stock is a separate account in the ________ category of the accounting equation.

Accepted Answer

A)  equity
B)  asset
C)  liability
D)  revenue

Question 15

Explain the difference between Prepaid Rent and Unearned Revenue.

Accepted Answer

Prepaid Rent is an asset account that re...

Question 16

In a trial balance,total debits must always equal total credits.

Accepted Answer

A) True 
 B)False

Question 17

The following are the current month's balances for ABC Financial Services,Inc.before preparing the trial balance.

What amount should be shown for Common Stock on the trial balance?

Accepted Answer

A)  $50,000
B)  $26,000
C)  $13,500
D)  $27,000

Question 18

Journalizing a transaction involves ________.

Accepted Answer

A)  calculating the balance in an account using journal entries
B)  posting the account balances in the chart of accounts
C)  preparing a summary of account balances
D)  recording the data only in the journal

Question 19

Unearned Revenue is a liability account.

Accepted Answer

A) True 
 B)False

Question 20

Prepaid Rent is a(n) ________ account and has a normal ________ balance.

Accepted Answer

A)  asset;debit
B)  liability;credit
C)  liability;debit
D)  asset;credit

Exam 2: Recording Business Transactions

Musical Instruments,Inc.sells musical instruments.On December 31,2019,after its first month of business,Musical Instruments,Inc.had the following balances in its accounts,listed alphabetically. Determine the balance in the cash account and prepare the trial balance.

Correct AnswerverifiedThe cash balance is the differ...View AnswerShow Answer

The debt ratio shows the proportion of assets financed with debt.

Correct AnswerverifiedShow Answer

An account that normally has a debit balance may occasionally have a credit balance.

Correct AnswerverifiedShow Answer

Journalizing a transaction involves ________.

Correct AnswerverifiedShow Answer

The account title used for recording a written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is ________.

Correct AnswerverifiedShow Answer

An account is a detailed record of all increases and decreases that have occurred in an individual asset,liability,or equity during a specific period.

Correct AnswerverifiedShow Answer

For each transaction,identify which account is debited and which account is credited.Use proper account titles.

Correct AnswerverifiedShow Answer

Which of the following journal entries would be recorded if a business purchased $800 of office supplies on account?

Correct AnswerverifiedShow Answer

Baytown Paper Company has a debt ratio of 25%,which means that 75% of the assets are financed by creditors.

Correct AnswerverifiedShow Answer

A compound journal entry has more than two accounts,but the total dollar value of the debits still must equal the total dollar value of the credits.

Correct AnswerverifiedShow Answer

Prepaid Rent is a(n) ________ account and has a normal ________ balance.

Correct AnswerverifiedShow Answer

Both the chart of accounts and the ledger ________.

Correct AnswerverifiedShow Answer

Unearned Revenue is a liability account.

Correct AnswerverifiedShow Answer

Which of the following accounts decreases with a debit?

Correct AnswerverifiedShow Answer

Explain the difference between Accounts Receivable and Accounts Payable.

Correct AnswerverifiedAccounts Receivable is an asset account ...View AnswerShow Answer

In a trial balance,total debits must always equal total credits.

Correct AnswerverifiedShow Answer

Which one of the following account groups normally has a credit balance?

Correct AnswerverifiedShow Answer

Common Stock is a separate account in the ________ category of the accounting equation.

Correct AnswerverifiedShow Answer

Explain the difference between Prepaid Rent and Unearned Revenue.

Correct AnswerverifiedPrepaid Rent is an asset account that re...View AnswerShow Answer

The following are the current month's balances for ABC Financial Services,Inc.before preparing the trial balance. What amount should be shown for Common Stock on the trial balance?

Correct AnswerverifiedShow Answer

Correct Answer
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The cash balance is the differ...
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Prepaid Rent is a(n) account and has a normal balance.

Correct Answer
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Accounts Receivable is an asset account ...
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Correct Answer
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Prepaid Rent is an asset account that re...
View Answer

Correct Answer
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