MC Qu. 143 Compute net income for May based on the...
Compute net income for May based on the following transactions:
| $10,200 | |
| → | $5,300 |
 | $8,700 |
| $13,900 | |
| $7,000 |
$5,200 + $1,500 + $2,000 - $2,200 - $1,200 = $5,300
Bill Co. performed $5,200 in consulting services on account.
a. Bennett started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock.
b. Purchased $70 of office supplies on credit.
c. Paid $1,200 cash for the receptionist's salary.
d. Sold a painting for an artist and collected a $4,500 cash commission on the sale.
e. Completed an art appraisal and billed the client $200.
What was the balance of the cash account after these transactions were posted?
MC Qu. 144 What would be the appropriate entry for the...
What would be the appropriate entry for the following transaction?Bill Co. performed $5,200 in consulting services on account.
| Credit to Cash, debit to Accounts Receivable. | |
| Debit to Service Revenue, debit to Cash. | |
| Debit to Accounts Receivable, credit to Cash. | |
| Debit to Service Revenue, credit to Cash. | |
 | Debit to Accounts Receivable, credit to Service Revenue. |
MC Qu. 79 A simple account form widely used in...
A simple account form widely used in accounting to illustrate how debits and credits work is called a:| Dividend account | |
| Common stock account | |
| Drawing account | |
| T-account |
| Balance column sheet |
MC Qu. 62 For what reason do most sellers require...
For what reason do most sellers require customers to have their receipts in order to exchange or return purchased items? | The receipt contains coded information that the seller needs to prepare and analyze the trial balance. |
| → | Sellers wish to ensure that the sale in question was rung up on the register in the first place. |
| This is a legal requirement mandated by a federal law. | |
| The receipt is serving as a promissory note. | |
| To create an environment in which customers do not want to return items. |
MC Qu. 113 A general journal is:
A general journal is:| A ledger in which amounts are posted from a balance column account. | |
| Not required if T-accounts are used. | |
| A complete record of each transaction in the place from which transaction amounts are posted to the ledger accounts. |
| Not necessary in electronic accounting systems. | |
| A book of final entry because financial statements are prepared from it. |
MC Qu. 95 Which of the following statements is false...
Which of the following statements is false with regard to the debt ratio?| It is of use to both internal and external users of accounting information. | |
| A relatively high ratio is always desirable. |
| The dividing line for a high and low ratio varies from industry to industry. | |
| Many factors such as the company's age, stability, profitability, and cash flow influence the determination of what would be interpreted as a high versus a low ratio. | |
| The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt. |
MC Qu. 90 The debt ratio is used:
The debt ratio is used:| To measure the amount of equity relative to the expenses. | |
| To reflect the risk associated with a company's debts. |
| Only by banks when a business applies for a loan. | |
| To determine how much debt a firm should pay off. | |
| To determine who a company owes. |
MC Qu. 89 These transactions were completed by the art...
These transactions were completed by the art gallery opened by Zed Bennett.a. Bennett started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock.
b. Purchased $70 of office supplies on credit.
c. Paid $1,200 cash for the receptionist's salary.
d. Sold a painting for an artist and collected a $4,500 cash commission on the sale.
e. Completed an art appraisal and billed the client $200.
What was the balance of the cash account after these transactions were posted?
| $12,230 | |
| $12,430 | |
| $43,300 |
| $43,430 | |
| $61,430 |
$40,000 - $1,200 + $4,500 = $43,300
MC Qu. 110 The record in which business transactions...
The record in which business transactions are first recorded is the:| Account balance | |
| Ledger | |
| → | General journal |
| Trial balance |
| Cash account |
MC Qu. 57 The accounting process begins with:
The accounting process begins with: | Analysis of business transactions and events. |
| Preparation of financial statements and other reports. | |
| Summarizing the recorded effects of business transactions. | |
| Presentation of financial information to decision-makers. | |
| Preparation of the trial balance. |
