13. value: 4 points What would be the appropriate entry for the following transaction? Bill Co. performed $5,200 in consulting services on account 1.Credit to Cash, Debit to Accounts Receivable 2.Debit to Revenue, Debit to Cash 3.Debit to Accounts Receivable, Credit to Cash 4.Debit to Revenue, Credit to Cash 5.Debit to Accounts Receivable, Credit to Revenue 14. value: 4 points Which of the following is the appropriate journal entry if a company performs a service and then bills the customer? 1.Debit to Cash, Debit to Revenue 2.Debit to Cash, Credit to Revenue 3.Debit to Accounts Receivable, Credit to Cash 4.Debit to Revenue, Credit to Accounts Receivable 5.Debit to Accounts Receivable, Credit to Revenue 15. value: 4 points Of the following accounts, the one that normally has a credit balance is: 1.Cash 2.Office Equipment 3.Sales Salaries Payable 4.Dividends 5.Sales Salaries Expense 16. value: 4 points 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 which 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 customer's do not want to return items. 17. value: 4 points A ledger is: A record containing increases and decreases in a specific asset, liability, equity, revenue or expense item A journal in which transactions are first recorded A collection of documents that describe transactions and events during the accounting process A list of all accounts with their debit balances at a point in time A list of all accounts a company uses and includes an identification number assigned to each account 18. value: 4 points Stride Rite has total assets of $425 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio. 38.6% 13.4% 34.9% 25.9% 14.9% 19. value: 4 points 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 20. value: 4 points Which of the following statements is correct? When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense Promises of future payment are called accounts payable Increases and decreases in cash are always recorded in the retained earnings account An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business Accrued liabilities include accounts receivable 21. value: 4 points The adjusted trial balance contains information pertaining to: Asset accounts only Balance sheet accounts only Income statement accounts only All general ledger accounts Revenue accounts only 22. value: 4 points A classified balance sheet: Measures a company's ability to pay its bills on time Organizes assets and liabilities into important subgroups Presents revenues, expenses and net income Reports operating, investing and financing activities Reports the effect of profit and dividends on retained earnings 23. value: 4 points If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include: A debit to Cash and a credit to Salaries Payable A debit to Cash and a credit to Prepaid Salaries A debit to Salaries Payable and a credit to Cash A debit to Salaries Payable and a credit to Salaries Expense No entry would be necessary on January 5 24. value: 4 points If a company records prepayment of expenses in an asset account, the adjusting entry would: Result in a debit to an expense and a credit to an asset account Cause an adjustment to prior expense to be overstated and assets to be understated Cause an accrued liability account to exist Result in a debit to a liability and a credit to an asset account Decrease cash