04 Chapter 2 Recording transactions

The degree of _____ is one of the methods used to quantify a company’s financial risk (the risk associated with how the company finances its operations).

• financial leverage

• prepaid expense

• general ledger

• bank statements

Which of the followings does not belong to source documents?

• sales invoices

• purchase orders

• customer bills

• receipt voucher

Translation: unearned revenue

Translation: credit revenue

According to ______principle, revenue is recorded when earned.

• matching

• full-disclosure

• materiality

• revenue recognition

The normal balance of repaid insurance is a credit balance.

• True

• False

What is the journal entry to record the collection of cash for completed chiropractic work?

• Debit Cash $2,400, Credit Service Revenue

• Debit Accounts Receivable $2,400, Credit Cash $2,400

• Debit Cash $2,400, Credit Accounts Payable $2,400

• Debit Revenue $2,400, Credit Cash $2,400

What is the journal entry to record the purchase of medical supplies on credit?

• Debit Medical Supplies $580, Credit Cash $580

• Debit Accounts Payable580, Credit Medical Supplies $580

• Debit Medical Supplies $580, Credit Accounts Payable $580

• Debit Accounts Payable $580, Credit Cash $580

What is the journal entry to record Jay Ball’s investment of cash and medical equipment at the beginning of the month?

• Debit Cash $27,000, Debit Medical Equipment $27,000, Credit Accounts Payable $54,000

• Debit Cash $27,000, Credit Medical Equipment $27,000

• Debit Medical Equipment $27,000, Credit Cash $27,000

• Debit Cash $27,000, Debit Medical Equipment $27,000, Credit Owner’s Equity $54,000

Which of the following statements is correct?

• The chart of accounts is a list of all accounts with their balances

• The trial balance is a list of all accounts with their balances , divided as debit or credit

• The ledger is maintained in chart-of-accounts order

• Both B and C are correct