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Homework answers / question archive / Choose the correct answer for the following items
Choose the correct answer for the following items.
6) Which of the following statements is true of a trial balance?
A) A trial balance is the first step in the accounting cycle.
B) A trial balance is also known as a balance sheet.
C) A trial balance is a list of all accounts with their balances.
D) A trial balance is also known as the chart of accounts.
7) Sunlight Company has assets and equity that amount to $200,000 and $90,000, respectively. Liabilities total ________.
A) $90,000
B) $110,000
C) $200,000
D) $290,000
8) GCC Co. reported assets of $1,000 and equity of $450. What is its debt ratio?
A) 60%
B) 45%
C) 100%
D) 55%
9) Future, Inc. paid $12,000 on accounts payable. How does this transaction affect the accounting equation of Future, Inc.?
A) assets decrease by $12,000 and equity increases by $12,000
B) assets decrease by $12,000 and liabilities decrease by $12,000
C) assets increase by $12,000 and equity decreases by $12,000
D) assets increase by $12,000 and liabilities increase by $12,000
10) The Accounts Payable account of Nadeen, Inc. has the following postings:
Accounts Payable
18,000 | 29,000
5,000 | 12,000
Calculate the ending balance of the account.
A) $18,000 credit
B) $5,000 debit
C) $12,000 credit
D) $18,000 debit
6)Correct answer is C.
A trial balance is list of all accounts with their balances.
7.Liability = Assets-equity
=$200000-$90000=$110000.
Correct answer is B.
8.Debt=Total asset-equity=$1000-$450=$550.
Debt ratio=Total debt÷Total assetx100=550×100÷1000=55%.
So D is correct answer.
9.Correct answer is B.
Assets decreases by $12000 and liability decreases by $12000.
10.Correct answer is D.
$18000 debit.
