Accounting 101 Smartbooks

During its first year of operations, Mario Lupo formed Lupo Company as a corporation and personally invested $15,000 in the business in exchange for common stock. Lupo Company also paid dividends of $2,000. The company earned $35,000 of revenues and incurred $23,000 of expenses. At the end of the year, the company's equity totaled:

25,000

If equity is $30,000 and liabilities are $19,000, then assets must equal:

49,000

Which of the following are the ways that a company can finance the purchase of assets?

A company may finance growth by issuing additional shares of stock, called equity financing or through borrowing, called debt financing.

Which of the following is a true statement about debits and credits?

A credit is on the right side of an account and a debit is on the left side of an account. A debit will increase assets, expenses and dividend accounts. A credit will increase liabilities, revenue and common stock accounts.

Why is accounting important? multiple choice Accounting information impacts all of us. Accounting information impacts businesses only .Accounting is important only to those who are majoring in accounting.

Accounting information impacts all of us.

Classify the following list of accounts into the correct account type using the drop-down list.

Accounts receivable is an asset. Unearned revenue and Accounts payable are liabilities.

Assume that the Accumulated Depreciation account has an unadjusted normal balance of $120,000. The company's list of adjusting entries includes one that debits Depreciation Expense and credits the Accumulated Depreciation account for $20,000. The adjusted balance in the Accumulated Depreciation account is a:

Accumulated Depreciation, which is a contra asset account, has a normal credit balance. The unadjusted credit balance of $120,000 plus the credit of $20,000 from the related adjusted entry will result in an adjusted credit balance of $140,000.

An adjusted trial balance includes which of the following accounts:

All accounts and their balances which will appear in the financial statements.

A record of the increases and decreases in a specific account is a(n)

An account is a record of the increase and decreases in a specific asset, liability, equity, revenue or expense.

An unclassified balance sheet:

An unclassified balance sheet broadly groups accounts into assets, liabilities, and equity. A classified balance sheet organizes assets and liabilities into subgroups, such as "current" and "long-term".

Annual reporting periods can cover:

Annual reporting periods may cover a calendar year, a 52-week period, or 12 consecutive months.

Which of the following accounts is an asset?

Assets include cash, accounts receivable, supplies (not supplies expense), prepaid items including prepaid insurance and prepaid advertising, equipment, and land.

Before the adjusting entry for a deferral of an expense, the expenses will be _____ and the assets will be _____.

Before an adjusting entry related to the deferral of expenses, the expenses are understated which will result in an overstatement of net income. Also, the assets will be overstated, so total assets on the balance sheet will be overstated.

Accounting certifications include: IFRS CPA GAAP SEC

CPA

The company's unclassified balance sheet reported the assets listed in the above table. The total current assets that would be reported on a classified balance sheet prepared for the company are:

Cash $12,000 + Merchandise inventory $6,000 + Short-term notes receivable $1,000 + Prepaid insurance $1,500 + Short-term investments $10,000 + Supplies $250 = Current assets of $30,750.

Alex invested $30,000 in cash in his business. How will this entry be posted in the ledger accounts?

Cash is an asset account and Common Stock is an equity account. Since the Common Stock investment in the business increases the cash balance, we post $30,000 in the debit column of the Cash account and post $30,000 in the credit column of the Common Stock.

Which of the following statements are true about the chart of accounts? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

Companies have complete flexibility in how they establish the account titles they use as long as they are sufficient to allow accurate recording of business transactions.The chart of accounts as well as the general ledger should follow the sequence in the financial statements. This allows a much more efficient means of accessing and reviewing the account information. It is also important to have accounts grouped by type so that financial data can be summarized as appropriate.

Classify the following accounts into the correct financial statement using the drop-down list.

Consulting revenue is a revenue which belongs on the Income Statement. Rent expense is an expense which belongs on the Income Statement. Dividends, are classified as withdrawals which belongs on the Statement of Retained Earnings.

Carlin Company has current assets of $100,000, total assets of $1,000,000, current liabilities of $50,000, total liabilities of $250,000 and total equity of $750,000. What is the current ratio (rounded to the nearest decimal point)?

Current Ratio = Current Assets / Current LiabilitiesCurrent Ratio = $100,000 / $50,000 = 2.0

With double-entry accounting, each transaction requires

Each transaction will affect at least two accounts with one (or more) accounts being a debit and one (or more) accounts being a credit. The total debits will always equal the total credits for each transaction.

Which of the following accounts is an equity?

Equity includes common stock, dividends, revenues and expenses.

The organization that is primarily responsible for developing GAAP for use by all U.S. companies is the: multiple choice SEC IASB FASB IFRS

IASB

Which of the following is a proper reflection of the sequence of steps when deciding on the preferred course of action in making an ethical decision? Identify ethical concerns; Make ethical decision; Analyze options. Analyze options; Identify ethical concerns; Make ethical decision. Identify ethical concerns; Analyze options; Make ethical decision. Analyze options; Make ethical decision; Identify ethical concerns.

Identify ethical concerns; Analyze options; Make ethical decision.

Analyze the following transaction and select the best answer. Tyler invests $2,000 cash in exchange for common stock, to begin a new company, Tyler's Tayloring. This transaction will:

Increase equity by $2,000.

Interim financial statements:

Interim financial statements cover less than one year, usually spanning one-, three-, or six-month periods.

Indicate how to increase each of the accounts listed below.

Item #1:Cash is an asset and is increased with a debit and decreased with a credit. Item #2:Accounts Payable is a liability and is increased with a credit. Item #3:Supplies is an asset and increased with a debit. Item #4:Accounts Receivable is an asset and increased with a debit.

Indicate how to increase each of the accounts listed below.

Item #1:Common stock is an equity account and is increased with a credit. Item #2:Professional Fees Revenue is an equity account and is increased with a credit .Item #3:Dividends is an equity account and decreases equity, so it is increased with a debit .Item #4:Salaries Expense is an expense and is increased with a debit.

Select the correct term for the following types of users:

Item #1:Customers are classified as external information users. Item #2:A purchasing manager is an internal information user. Item #3:A marketing manager is an internal information user. Item #4:A supplier is an external information user. Item #5:Labor unions are external information users.

Classify the following business activities using the drop-down list.

Item #1:Events are happenings that affect the accounting equation and are reliably measured. They include business events such as changes in the market value of certain assets and liabilities and natural events such as fires that destroy assets and create losses. Item #2:External transactions are exchanges of value between two entities, which yield changes in the accounting equation. Item #3:Internal transactions are exchanges within an entity, which may or may not affect the accounting equation.

Identify the type of activity by choosing the best answer for each question.Select each item listed below as being an identifying, recording, or a communicating activity.

Item #1:Preparing and entering a listing of checks issued is categorized as a Recording activity.Item #2:Using a cash register to enter sales is categorized as a Recording activity. Item #3:Entering a list of the sales invoices for the company's recordkeeper is an Identifying activity. Item #4:Interpreting information from financial reports is a Communicating activity. Item #5:Preparing financial statements is a Communicating activity.

Identify the correct principle for each of the following activities using the drop-down list.

Item #1:Recording expenses falls under the expense recognition principle. Item #2:Recording revenue earned falls under the revenue recognition principle. Item #3:Reporting the details behind the financial statements falls under the full-disclosure principle. Item #4:Recording accounting information based on cost falls under the measurement principle.

Indicate the order the financial statements are prepared.

Item #1:The Statement of Retained Earnings is prepared after the Income Statement, so it is second in order of preparation. Item #2:The Balance Sheet is prepared after the Statement of Retained Earnings, so it is third in the order of preparation. Item #3:The Income Statement is the first financial statement prepared.

Select the correct reporting time period for each financial statement.

Item #1:The income statement is prepared over a period of time. Item #2:The balance sheet is prepared as of a period of time. Item #3:The statement of retained earnings is prepared over a period of time. Item #4:The statement of cash flows is prepared over a period of time.

Which of the following accounts is a liability?

Liabilities include accounts payable, income tax payable, salaries payable, and unearned revenue.

_____ includes opportunities in general accounting, cost accounting and internal auditing. Accounting-related Financial accounting Managerial accounting Taxation

Managerial Accounting

Assume that an adjusting entry was made on November 30 for earned, but unpaid employee salaries of $260 which represented 2 days of salaries earned for November 29-30.On December 5, the employees are paid for five days. Record the journal entry on December 5 assuming that reversing entries ARE used by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

On December 5, since a reversing entry was made on November 30, the journal entry will debit Salaries Expense and credit Cash for $650.On November 30, the adjusting entry included a debit to Salaries Payable for $260 and a credit to Salaries Expense for $260.

Identify the accounts that would appear on the post-closing trial balance.

Only permanent accounts will appear on a post-closing trial balance which includes assets, liabilities, and equity accounts.

In the fraud triangle, when a person feels an incentive to commit fraud, this is referred to as _______. Opportunity Pressure Rationalization Attitude

Pressure

The majority of accounting opportunities are in _____ accounting. private public government not-for-profit

Private

If a company's net income increased while its net sales remained constant, the company's profit margin would:

Profit Margin = Net Income / Net SalesAn increase in net income while net sales remain constant would increase the company's profit margin since more net income would be generated per dollar of sales.

Roselawn Company reported net sales of $90,000 and net income of $18,000 for the previous year ended December 31. The company reported net sales of $100,000 and net income of $20,000 for the current year ended December 31. Total assets amounted to $200,000 at December 31 of the previous year and $246,000 at December 31 of the current year. The company's profit margin for the current year ended December 31 (rounded to the nearest decimal point) is:

Profit Margin = Net Income / Net SalesProfit Margin = $20,000 / $100,000 = 0.200 = 20.0%

Rosalind Company reported revenues of $111,500, expenses of $92,545, and net income of $18,955 for the year. Assets totaled $200,000 at the beginning of the year and $246,000 at the end of the year. The company's return on assets for the year (round the percent to one decimal) is:

Return on Assets = Net Income / Average Total AssetsReturn on Assets = $18,955 / [($200,000 + $246,000) / 2] = 0.085 = 8.5%

Return on assets measures a company's ability to generate an adequate return on its investment in:

Return on Assets measures a company's ability to generate an adequate return on its investment in assets.

A reversing entry is

Reversing entries are optional and are used to simplify a company's recordkeeping process.

Which of the following statements is true when comparing the results of using reversing entries with not using reversing entries.

Reversing entries are optional and are used to simplify a company's recordkeeping process. As such, the expense and payable account balances will be the same regardless of if a reversing entry is used or not.

Assume that an adjusting entry was made on November 30, 2021 for earned, but unpaid employee salaries of $260 which represented 2 days of salaries earned for November 29-30.On December 5, the employees are paid for five days. Record the journal entry on December 5 assuming that reversing entries ARE NOT used by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

Salaries Payable will be reduced by $260 which is the amount that was credited on 11/30 to accrue salaries for 2 days. Salaries Expense is debited for 3 days' of salaries which equals $260 / 2 days = $130 per day. $130 × 3 days = $390. Cash is credited for 5 days, or $650 which equals $130 × 5 days.

From the following list, identify those that are likely to serve as source documents. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)Select all that apply.

Source documents can include a telephone bill, a sales receipt, an invoice from a supplier, and a bank statement.

Place the steps in the four-step closing process in the correct order:

Step 1: Close the revenue accounts. Step 2: Close the expense accounts. Step 3: Close the income summary account. Step 4: Close the dividends account.

Place the steps in the three-step adjusting process in the correct order:

Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record an adjusting entry to get from step 1 to step 2.

On December 31, the company paid a $200 invoice that they received in November for electricity.Complete the necessary journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

The Accounts Payable account is a liability and is reduced because the company is paying the amount they owed from last month's utilities expense. The Cash account is also reduced and is an asset, so the Cash account is credited

On December 31, the company provides services and receives cash of $5,000.Complete the necessary journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

The Cash account is an asset and, therefore, is increased with a debit. The Services Revenue account is a part of equity and is increased with a credit.

On December 31, the company purchases equipment for $10,000 and pays for the purchase in cash.Complete the necessary journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

The Equipment accounts is an asset and increased with a debit. The Cash account is also an asset and is decreased with a credit.

On December 31, the company purchases supplies for $1,000 on credit.Complete the necessary journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

The Supplies is an asset and increased with a debit. Accounts Payable is a liability and is increased with a credit. Both accounts are increased.

The primary difference between the accrual basis and the cash basis of accounting is:

The accrual basis records revenues when services or products are delivered and records expenses when incurred and the cash basis records revenues when cash is received and records expenses when cash is paid.

The retained earnings adjusted balance is entered in:

The adjusted retained earnings balance will be transferred to the Balance Sheet Credit column. The total debits and credits in the Balance Sheet will then be equal.

Identify which items belong on the balance sheet.

The balance sheet consists of assets (cash, accounts receivable), liabilities (accounts payable) and equity (ending retained earnings balance plus common stock).

On January 31, Jean Consulting Company receives a bill for that month's utilities in the amount of $500. Jean sets it aside because she does not plan to pay the bill until its due date of February 15. What effect, if any, does this event have on the company's accounting equation as of January 31?

The business must record this event, which would increase liabilities and decrease equity on January 31.

Place the steps in completing a work sheet in the correct order:

The correct order is: Step 1: List the titles of all accounts and their account number and their balances. Step 2: Enter the adjustments in the adjustments columns. Step 3: Prepare the adjusted trial balance by combining the adjustments with the unadjusted balances for each account.

The accounting cycle consists of 10 steps. Identify the order in which the first five steps will be performed by selecting from the drop down items.

The correct order of the first five steps in the accounting cycle is:Step 1: Analyze transactions Step 2: Journalize Step 3: Post Step 4: Prepare unadjusted trial balance Step 5: Adjust accounts

The current ratio is computed as:

The current ratio helps assess a company's ability to pay its debts in the near future and is computed by dividing current assets by current liabilities.

The difference between the Debit and the Credit columns in the Income Statement section of the work sheet equals:

The difference between the total of the debits and credits in the Income Statement columns of a work sheet will equal the net income (or net loss) for the period. This number is also transferred to the Credit side of the Balance Sheet column.

Aurora Corporation operated without insurance coverage for the first month of operations. Then, on February 1, the company paid the $4,800 premium on a two-year insurance policy with benefits beginning on that date. The company uses the accrual basis. How much insurance expense will be reported on the company's income statement for their first year ended December 31?

The expense recognized is the amount of insurance that was used during the year. The premium payment of $4,800 divided by 24 months, results in a monthly premium of $200. Eleven months of premium were used (that is, expired) during the year (February through December). Premium of $200 per month × 11 months = $2,200 of insurance expense for the first year. Alternatively, multiply the total insurance premium by the fraction used. That fraction will equal the number of months the company was covered by insurance during the year divided by the total number of months covered by the premium. $4,800 × (11/24) = $2,200.

Aurora Corporation operated without insurance coverage for the first month of operations. Then, on February 1, the company paid the $4,800 premium on a two-year insurance policy with benefits beginning on that date. The company uses the cash basis. How much insurance expense will be reported on the company's income statement for their first year ended December 31?

The expense recognized is the full amount paid since the company is using the cash basis.

The company's adjusted trial balance includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Retained earnings, $59,000; Dividends, $2,000; Fees Revenue, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare the first closing entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

The first closing entry closes the revenue (and gain) accounts and transfers their credit balances to the Income Summary account. We bring accounts with credit balances, like the Fees Revenue account, to zero by debiting them. The $56,000 credit entry to Income Summary equals total revenues for the period.

The four basic financial statements are:

The four basic financial statements are the income statement, the statement of retained earnings, the balance sheet, and the statement of cash flows.

Correctly identify steps 3 and 4 of the accounting process:

The four steps in the accounting process are Step 1: identify transactions and source documents; Step 2: analyze transactions using the accounting equation; Step 3: record transactions into the journal; and Step 4: post entries into the ledger.

Which of the following statements are true about the general ledger?

The general ledger contains all of the accounts, once they have been established in the chart of accounts, and then also the transaction and balance data pertaining to each account.

Identify which items belong on the income statement.

The income statement consists of the revenues minus expenses which equals net income.

The process of recording transactions in a journal is called:

The process of recording transactions in a journal is called journalizing.

Carlin Company has total assets of $1,000,000, liabilities of $400,000, and equity of $600,000. What is the debt ratio (rounded to a whole percent)?

The ratio is calculated as follows: $400,000/$1,000,000 = 40%.

Match the term and the definition.

The recording of transactions and events only, either manually or electronically. Recordkeeping An information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities. Accounting.

Identify which items belong on the statement of cash flows.

The statement of cash flows consists of cash flows from operating, cash flows from investing, and cash flows from financing activities.

Identify which items belong on the statement of retained earnings.

The statement of retained earnings consists of the beginning retained earnings balance, plus net income, minus dividends to equal the ending retained earnings balance.

The company's adjusted trial balance includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Retained earnings, $59,000; Dividends, $2,000; Fees Revenue, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare the third closing entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

The third closing entry closes the Income Summary account and transfers it balance to the Retained Earnings account. At this point, the Income Summary account has a credit for $56,000 from the first closing entry and a debit for $48,000 from the second closing entry and, as such, has a credit balance of $8,000. That credit balance equals the net income of the period (revenues of $56,000 − expenses of $48,000). We bring accounts with credit balances to zero by debiting them. The credit is to the Retained earnings account. That credit will add the net income for the period to the Retained Earnings account. Note: Even though we are using the Retained Earnings account in this entry; we are not closing that account! We are closing the Income Summary account.

Which of the following statements is true?

The trial balance is an accounting "tool" providing a clear visual means of establishing that debits and credits and that the general ledger is in balance. It is not a financial statement, nor does it serve the primary purpose of calculating net income. It is prepared prior to any of the financial statements.

The work sheet:

The work sheet aids in the preparation of financial statements.

On January 1, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has a salvage value of) $1,000 at the end of its useful life in five years. The company uses straight-line depreciation. It has not recorded any adjustments relating to this equipment during the current year. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

This adjustment relates to a prepaid (deferred) expense. It requires a debit to an expense account, Depreciation Expense, as the equipment's net cost is allocated to depreciation during its useful life. The Accumulated Depreciation account, a contra asset account, needs to be credited so that the ending balance equals the allocation through this date. The amount of this adjustment, which covers the entire year, equals $1,800 (or the net cost of the equipment of $9,000 [(or the cost of $10,000 − the salvage value of $1,000) ÷ useful life of 5 years]. Since no adjustments have been made, there is no need to determine a monthly amount.

On December 1, the company paid $12,000 for 12 months of insurance coverage beginning on that date. The payment was recorded with a debit in that amount to the Insurance Expense account. Complete the necessary December 31 adjusting entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

This adjustment relates to a prepaid expense. The company paid for 12 months of insurance coverage in advance; one month has expired. Because the alternative treatment was used, the related payment of $12,000 was originally debited to Insurance Expense. The adjustment requires a debit to an asset account, Prepaid Insurance, for $11,000 (or $12,000 × 11/12), which represents the eleven months of coverage that is still prepaid at December 31. It also requires a credit in the same amount to the Insurance Expense account to correct the overstatement of that account.

The company employs a single employee who works all five weekdays and is paid on the following Monday. The employee works the entire week ending on Friday, December 30. The employee earns $800 per day. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

This adjustment relates to an accrued expense. It requires a debit to an expense account, Salaries Expense, for the amount of wages relating to the five days ending December 31. The Salaries Payable account also needs to be increased with a credit so that the ending balance equals the amount owed to the employee on that date. The amount of this adjustment equals $4,000 (or $800 per day × 5 days).

On Saturday, December 31, the company's owner provided ten hours of service to a customer. The company bills $100 per hour for services provided on weekends. Payment has not yet been received. The owner did not stop in the office on Saturday; as such, on December 31, the services were unbilled and unrecorded. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

This adjustment relates to an accrued revenue. It requires a credit to a revenue account, Service Revenue, for the amount that was earned that day. The Accounts Receivable account also needs to be increased with a debit to reflect the amount owed by the customer. The amount of this adjustment equals $1,000 (or $100 per hour × 10 hours).

On November 1, the company rented space to another tenant. A check in the amount of $9,000, representing three months' rent in advance, was received from the tenant on that date. The payment was recorded with a credit to the Unearned Rent Revenue account. Complete the necessary December 31 adjusting journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

This adjustment relates to an unearned (deferred) revenue. It requires a credit to a revenue account, Rent Revenue, for the two months of rent earned for November and December. The Unearned Rent Revenue account needs to be debited so that the ending balance equals the amount of rent, or one month's worth, still owed to the tenant. The amount of this adjustment equals $6,000 (or $9,000 × 2/3).

On November 1, the company rented space to another tenant. A check in the amount of $9,000, representing three months' rent in advance, was received from the tenant on that date. The payment was recorded with a credit to the Rent Revenue account. Complete the necessary December 31 adjusting entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

This adjustment relates to an unearned (deferred) revenue. The tenant paid 3 months of rent in advance; two months have passed. Because the alternative treatment was used, the related payment of $9,000 was originally credited to Rent Revenue. The adjustment requires a credit to a liability account, Unearned Rent Revenue, for $3,000, which represents the one month of rent that is still owed for January. It also requires a debit in the same amount to the Rent Revenue account to correct the overstatement of that account.

On December 31, Fantastic Tea receives $3,000 cash from Don Smith, in exchange for common stock.Complete the necessary journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

This transaction increases Cash, an asset, with a debit of $3,000 and increases Common Stock, an equity account, with a credit of $3,000.

Why are posting references entered in the journal when entries are posted to the ledger accounts?

To ensure the entries balance, inserting a posting reference into the journal does not necessarily prove that the entries balance. This is ultimately ensured during the preparation of the trial balance. Posting references cannot be done during the preparation of the financial statements, which is the last step in the accounting process and done well after transactions have been analyzed and recorded in the ledger. Postings do not require specific approval to be posted. This is a part of the accounting process. The approval for the transactions occurs at the source document level.

The revenue recognition principle requires that revenue be recorded:

Under the revenue recognition principle, a company will record revenue when the goods or services are provided to the customers and at an amount expected to be received from customers.

On November 30, the company received an invoice from the electric company for $200. The company will pay the invoice in December.Complete the necessary journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

Utilities Expense is an expense and, therefore, is increased with a debit. The Accounts Payable account is a liability and is increased with a credit.

If a credit balance in Unearned Revenue (a liability account) is incorrectly listed as a credit balance in the Sales Revenue account (a revenue account), is the trial balance still in balance?

Yes, the trial balance still balances. However, when preparing the financial statements liabilities would be understated and revenue would be overstated. Remember, just because debits equal credits does not ensure that account balances are correct!

The return on assets for your small business was 11.2% last year and 12.6% this year. Your return on assets:

Your return on assets increased from 11.2% to 12.6%. In other words, your company earned 11.2¢ of net income per dollar invested on average in assets this year. This improved to 12.6¢ per dollar invested on average in assets. If a company's return on assets is increasing over time, this is a positive factor.