MGT 11a 2

Rocky Industries received its telephone bill in the amount of $300 and immediately paid it. Rocky's journal entry to record this transaction will include a: Multiple Choice A. Debit to Telephone Expense for $300. B. Credit to Accounts Payable for $300. C. Debit to Cash for $300. D. Credit to Telephone Expense for $300. E. Debit to Accounts Payable for $300.

A. Debit to Telephone Expense for $300.

A $15 credit to Sales was posted as a $150 credit. By what amount is Sales in error? Multiple Choice A. $150 understated B. $135 overstated C. $150 overstated D. $15 understated E. $1 35 understated

B. $135 overstated

A sales invoice: Multiple Choice A. Is a type of use document. B. Is a source document. C. Is not needed by buyers. D. Gives rise to an entry in the accounting process. E. Is not necessary in accounting.

B. Is a source document.

Source documents include all of the following except: Multiple Choice A. Sales tickets B. Ledgers C. Checks D. Purchase orders E. Bank statements

B. Ledgers

The debt ratio is used: Multiple Choice A. To measure the amount of equity relative to the expenses. B. To reflect the risk associated with a company's debts. C. Only by banks when a business applies for a loan. D. To determine how much debt a firm should pay off. E. To determine who a company owes.

B. To reflect the risk associated with a company's debts.

A company failed to post a $50 debit to the Office Supplies account. The effect of this error will be that the: Multiple Choice A. Office Supplies account balance will be overstated. B. Trial balance will not balance. C. Error will overstate the debits listed in the journal. D. Total debits in the trial balance will be larger than the total credits. E. Trial balance will be in balance.

B. Trial balance will not balance.

Wisconsin Rentals purchased office supplies on credit. The journal entry made by Wisconsin Rentals to record this transaction will include a: Multiple Choice A. Debit to Accounts Payable. B. Debit to Accounts Receivable. C. Credit to Cash. D. Credit to Accounts Payable. E. Credit to Retained Earnings.

D. Credit to Accounts Payable.

If the Debit and Credit column totals of a trial balance are equal, then: Multiple Choice A. All transactions have been recorded correctly. B. All entries from the journal have been posted to the ledger correctly. C. All ledger account balances are correct. D. The total debit entries and total credit entries are equal. E. The balance sheet would be correct.

D. The total debit entries and total credit entries are equal.

Which of the following is a TRUE statement concerning a company's financial statements? Multiple Choice A. Balance sheet and income statement data combined contain the complete financial picture of a given company. B. A trial balance is another name for a balance sheet. C. Another name for the income statement is the earnings statement. D. Dividends paid to a company's shareholders are shown on the income statement. E. The balance sheet shows the financial position of a company for a period of time.

C. Another name for the income statement is the earnings statement.

Which financial statements are prepared for a period of time? Multiple Choice A. Income statement, statement of retained earnings, balance sheet and statement of cash flows. B. Balance sheet. C. Income statement, statement of retained earnings, and statement of cash flows. D. Income statement and balance sheet. E. Statement of retained earnings and statement of cash flows.

C. Income statement, statement of retained earnings, and statement of cash flows.

According to IFRS, comparative information on financial statements is: Multiple Choice A. Not required. B. Required for publicly traded companies only. C. Required for the preceding period only. D. Required for the last five years. E. Not required, but considered a hallmark for companies of excellence.

C. Required for the preceding period only.

Stride Rite has total assets of $425 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio. Multiple Choice A. 38.6% B. 13.4% C. 34.9% D. 25.9% E. 14.9%

D. 25.9%

Management Services, Inc. provides services to clients. On May 1, a client prepaid Management Services $60,000 for a six-month contract in advance. Management Services' journal entry to record this transaction will include a: Multiple Choice A. Debit to Unearned Management Fees for $60,000. B. Credit to Management Fees Earned for $60,000. C. Credit to Cash for $60,000. D.Credit to Unearned Management Fees for $60,000. E. Debit to Management Fees Earned for $60,000.

D.Credit to Unearned Management Fees for $60,000.