Accounting Exam 2 Review

How is the debt ratio calculated?

• total assets divided by total liabilities

• total liabilities divided by total assets

• current liabilities divided by current assets

• current assets divided by current liabilities

Which of the following is a temporary account?

• Cash

• Accounts Payable

• Retained Earnings

• Dividends

The beginning balance in Retained Earnings is found on the:

• Statement of Retained Earnings

• Income Statement

• Balance Sheet

• Statement of Cash Flows

Which of the following accounts appears on the Balance Sheet

• Sales Revenue

• Accounts Receivable

• Dividends

• All of these

Which of the following are considered permanent accounts?

• Sales Revenue

• Utilities Expense

• Dividends

• Accounts Payable

Unearned Revenue is what type of account?

• Asset

• Liability

• Owners' Equity

• Expense

Cost of Goods Sold is what type of account?

• Asset

• Liability

• Owners' Equity

• Expense

What data flows from the Income Statement to the Statement of Retained Earnings?

• Dividends

• Net Income

• Beginning balance in Retained Earnings

• ending balance in Retained Earnings

Revenue - expenses = _______________

• Retained Earnings

• Common Stock

• Net Income

• Dividends

According to U.S. GAAP, when should revenue be recognized?

• When cash is received from the customer

• When the service is performed or goods have been delivered to customer

• At the stated date in the contract

• When the adjusting entries are recorded