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Exam 2: Accounting for Transactions

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Question 91

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A revenue account normally has a debit balance.

A) True
B) False

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Question 92

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

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Question 93

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For what reason do most sellers require customers to have their receipts in order to exchange or return purchased items?

It is not necessary to keep separate accounts for all items of importance for business decisions.

identify the account on which the statement appears.

In a double-entry accounting system, the total amount debited must always equal the-total amount credited.

A company has total liabilities of $550 million and total equity of $300 million. Calculate this company's debt ratio.

Which of the following statements about the Cash account are true?

_____________________________ requires that the impact of each transaction be recorded in at least two accounts. It also means that total amounts debited must equal total amounts credited for each transaction.

Debits increase both asset and expense accounts.

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?

Cash dividends should be treated as an expense to the business.

Accounting records are also referred to as the books.

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: $\begin{array}{|l|r|r|}\hline & \text { Assets } & \text { Liabilities } \\\hline \text { Beginning of the year } & \$ 114,000 & \$ 68,000 \\\hline \text { End of the year } & 135,000 & 73,000 \\\hline\end{array}$ If the owners made no investments in the business and no dividends were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year?

The balances for the accounts of Mike's Maintenance, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance. $\begin{array}{|l|r|l|r|}\hline\text { Accounts payable } & \$ 6,500 & \text { Wages expense } & \$ 36,000 \\\hline \text { Accounts receivable } & 7,000 & \text { Rent expense } & 6,000 \\\hline \text { Cash } & ? & \text { Retained earnings } & 68,700 \\\hline \text { Maintenance supplies } & 1,200 & & \\\hline \text { Building } & 125,000 & \text { Land } & 50,000 \\\hline \text { Supplies expense } & 21,500 & \text { Unearned maintenance fees } & 4,000 \\\hline \text { Common stock } & 50,000 & & \\\hline \text { Maintenance revenue } & 175,000 & \text { Dividends } & 48,000\\\hline\end{array}$ Calculate the correct balance for Cash and prepare a trial balance.

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

What are the total assets shown on the trial balance below? Common stock……$120,000 Accounts payable…...$25,000 Cash……………….$116,640 Accounts receivable.. $22,450 Supplies………… $ 1,500 Office equipment…...$23,300 Prepaid rent…….... $ 3,200 Unearned revenue…. $ 4,152 Service revenue..... $ 20,000 Utilities expense….... $ 422 Retained earnings... $ 30,000 Shaving equipment… $31,640

On November 30, a company had an Accounts Receivable balance of $5,100. During the month of December, total credits to Accounts Receivable were $76,000 from customer payments. The December 31 Accounts Receivable balance was $43,000. What was the amount of credit sales during December?

Revenues and expenses are two categories of ____________________ accounts.