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Questions
Q:
The balance sheet provides a link between beginning and ending income statements.
Q:
If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100.
Q:
A trial balance that is in balance is proof that no errors were made in journalizing the transactions, posting to the ledger, and preparing the trial balance.
Q:
The trial balance can serve as a replacement for the balance sheet, since debits must balance with credits.
Q:
Generally, the ordering of accounts in a trial balance typically follows their identification number from the chart of accounts: assets, liabilities, equity, revenues, and expenses.
Q:
IFRS requires that companies report four financial statements with explanatory notes: balance sheet; income statement; statement of changes in equity, and statement of cash flows.
Q:
A trial balance that balances is not proof of complete accuracy in recording transactions.
Q:
The journal is known as the book of final entry because financial statements are prepared from it.
Q:
A journal gives a complete record of each transaction in one place and shows the debits and credits for each transaction.
Q:
Transactions are first recorded in the ledger.
Q:
Posting is the transfer of the information from each journal entry to the ledger.
Q:
A compound journal entry affects no more than two accounts.
Q:
Hamilton Industries has total liabilities of $105 million and total assets of $350 million. Its debt ratio is 333.3%.
Q:
If a company is highly leveraged, this means that it has relatively low risk of not being able to repay its debt.
Q:
A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.
Q:
The debt ratio is calculated by dividing total assets by total liabilities.
Q:
The higher the debt ratio, the higher risk of a company not being able to meet its obligations.
Q:
The debt ratio reflects the risk of a company to both its owners and creditors.
Q:
When a company bills a customer for $600 for services rendered, the journal entry to record this transaction will include a $600 debit to Services Revenue.
Q:
If a company provides services to a customer on credit, the service provider company should credit Accounts Receivable.
Q:
If a company pays cash to purchase land, the journal entry to record this transaction will include a debit to Cash.
Q:
The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.
Q:
If insurance coverage for the next three years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.
Q:
A transaction that increases an asset and decreases a liability must also affect one or more other accounts.
Q:
A transaction that decreases an asset account and increases a liability account must also affect one or more other accounts.
Q:
A debit entry is always favorable.
Q:
Common Stock normally has a debit balance.
Q:
Asset accounts normally have credit balances and expense accounts normally have debit balances.
Q:
The dividends account normally has a credit balance since it is an equity account.
Q:
Accounts are normally decreased by debits.
Q:
Double-entry accounting requires that the impact of each transaction be recorded in at least two accounts.
Q:
Debits increase both asset and expense accounts.
Q:
In a double-entry accounting system, the total amount debited must always equal the-total amount credited.
Q:
Debit means the right-hand side of any account.
Q:
An account balance is the difference between the debits and credits for an account including any beginning balance.
Q:
The chart of accounts is a list of all the accounts used by a company and a corresponding identification number.
Q:
When a company provides services for which cash will not be received until some future date, the company should record unearned revenue for the amount charged to the customer.
Q:
Cash dividends should be treated as an expense to the business.
Q:
It is not necessary to keep separate accounts for all items of importance for business decisions.
Q:
Land and buildings are generally recorded in the same ledger account.
Q:
As prepaid expenses are used up, the costs of these assets become expenses.
Q:
Dividends are a type of business expense.
Q:
According to the seller, a customer's promise to pay is called an account payable.
Q:
An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.
Q:
Items such as sales slips, invoices, checks, and purchase orders are source documents.
Q:
Preparation of a trial balance is the first step in the analyzing and recording process.
Q:
The first step in the analyzing and recording process is to analyze each transaction and event from source documents.
Q:
An account format that is similar to a T-account in that it has columns for debits and credits but that is different in that it has columns for transaction date, explanation, and the account balance is the ___________________________________.
Q:
A ___________________________ gives a complete record of each transaction in one place and shows debits and credits for each transaction.
Q:
_______________ is the process of transferring journal entry information to the ledger.
Q:
Stride Rite had total liabilities of $130 million and total assets of $375 million. Its debt ratio was _______________.
Q:
FastForward purchased $25,000 of equipment for cash. The Equipment asset account is _______________ for $25,000 and the cash account is _______________ for $25,000.
Q:
Increases in assets are _______________, while increases in liabilities are _______________.
Q:
The difference between total debits and total credits for an account, including any beginning balance, is the ________________________.
Q:
_____________________________ 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.
Q:
A ___________________ is a record containing all accounts for a company along with their balances.
Q:
A _______________ is a list of all the accounts used by a company and their identification codes.
Q:
Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.
Q:
___________________ is a promise of payment from customers to sellers.
Q:
The three general categories of accounts in a general ledger are __________________, _________________ and __________________________.
Q:
The _______________________ is a record containing all accounts (with balances) used by a company.
Q:
_________________ identify and describe transactions and events and provide objective evidence and amounts for recording.
Q:
The third step in the analyzing and recording process is to post the information to _________________________.
Q:
The second step in the analyzing and recording process is to record the transactions and events in the _____________________________.
Q:
Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of retained earnings and a balance sheet. Sal made no additional investments in the company during the year. SALS BEAUTY SHOP Trial Balance December 31 Cash
$ 6,500 Accounts receivable
475 Beauty supplies
2,500 Beauty shop equipment
17,000 Accounts payable $ 745 Common stock 10,000 Retained earnings 11,155 Dividends
36,000 Revenue earned 72,000 Beauty supplies expense
3,425 Rent expense
6,000 Wages expense
22,000 Totals
$93,900
$93,900
Q:
Slotting fees are often referred to as which of the following in Europe?
a. placement
b. intermediary
c. listing
d. shelving
e. promotional
Q:
A payment that is made by an international marketer in order to secure shelf space in a store is referred to as which of the following?
a. bill-back fee
b. shelving fee
c. promotional fee
d. slotting fee
e. placement fee
Q:
Large international beverage marketers including Pepsi and Coca-Cola utilize which kind of allowance for retailers that perform important marketing functions?
a. off invoice
b. bill back
c. display
d. slotting
e. market-based promotions
Q:
Which type of allowance takes the form of a monetary allowance presented to a retailer or intermediary at the end of a promotional period?
a. off invoice
b. bill back
c. display
d. slotting
e. market-based promotions
Q:
When Samsung offers a price break to wholesalers who distribute a certain volume of products, it is which form of promotion?
a. off invoice
b. bill back
c. display
d. slotting
e. market-based promotions
Q:
What term describes a price reduction or other consideration paid to an intermediary as an incentive to promote a specific product?
a. trade coupon
b. trade allowance
c. bill-back allowance
d. slotting fee
e. market-based promotions
Q:
The most direct interaction with potential customers takes place with this promotion: ______.
a. trade contests
b. channel discounts
c. slotting fees
d. trade shows
e. display allowances
Q:
When two organizations pay for a commercial because it mentions both products, it is ______.
a. a consumer promotion
b. a trade show
c. creative advertising
d. cooperative advertising
e. a multimedia advertising program
Q:
Which of the following is NOT a major form of international trade promotion?
a. trade shows
b. trade allowances
c. cooperative advertising
d. couponing
e. point-of-purchase materials
Q:
Which type of consumer purchases only a favored brand and does not look for, nor do they often buy, substitutes?
a. promotion prone
b. price sensitive
c. brand loyal
d. preferred brand
e. deal prone
Q:
Which type of consumer uses price as the only purchase criterion?
a. promotion prone
b. price sensitive
c. brand loyal
d. preferred brand
e. deal prone
Q:
Which type of consumer takes advantage of coupons, price-off programs, and premiums?
a. promotion prone
b. price sensitive
c. brand loyal
d. preferred brand
e. deal prone
Q:
Which of the following types of promotional tools signals to a consumer that a company is adapting to the changing times?
a. couponing
b. contests and sweepstakes
c. social media
d. push promotions
e. pull promotions
Q:
What type of manager now plays an important role in international marketing sales promotions?
a. search engine optimization
b. search engine operator
c. search engine mediator
d. search engine facilitation
e. search engine moderator
Q:
Which does sampling encourage?
a. testing a product
b. repeat purchases
c. referrals to peers
d. entries into contests
e. recall of the brand name