Question 1

An account balance is:

Accepted Answer

A) The total of the credit side of the account. 
B) The total of the debit side of the account. 
C) The difference between the total debits and total credits for an account including the beginning balance. 
D) Assets = liabilities + equity. 
E) Always a credit. 
A) The total of the credit side of the account. 
B) The total of the debit side of the account. 
C) The difference between the total debits and total credits for an account including the beginning balance. 
D) Assets = liabilities + equity. 
E) Always a credit.

Question 2

A bookkeeper has debited an account for $3,500 and credited a liability account for $2,000.Which of the following would be an incorrect way to complete the recording of this transaction:

Accepted Answer

A) Credit another asset account for $1,500. 
B) Credit another liability account for $1,500. 
C) Credit an expense account for $1,500. 
D) Credit the owner's capital account for $1,500. 
E) Debit another asset account for $1,500. 
A) Credit another asset account for $1,500. 
B) Credit another liability account for $1,500. 
C) Credit an expense account for $1,500. 
D) Credit the owner's capital account for $1,500. 
E) Debit another asset account for $1,500.

Question 3

Select the account below that normally has a credit balance.

Accepted Answer

A) Cash. 
B) Office Equipment. 
C) Wages Payable. 
D) Owner,Withdrawals. 
E) Sales Salaries Expense. 
A) Cash. 
B) Office Equipment. 
C) Wages Payable. 
D) Owner,Withdrawals. 
E) Sales Salaries Expense.

Question 4

The process of transferring general journal entry information to the ledger is called:

Accepted Answer

A) Double-entry accounting. 
B) Posting. 
C) Balancing an account. 
D) Journalizing. 
E) Not required unless debits do not equal credits. 
A) Double-entry accounting. 
B) Posting. 
C) Balancing an account. 
D) Journalizing. 
E) Not required unless debits do not equal credits.

Question 5

J.Smith withdrew $100 from Jay's Limo Services for personal use.Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 6

A journal entry that affects no more than two accounts is called a compound entry.

Accepted Answer

A) True 
 B)False

Question 7

If cash is received from customers in payment for products or services that have not yet been delivered to the customers,the business would record the cash receipt as:

Accepted Answer

A) A debit to an unearned revenue account. 
B) A debit to a prepaid expense account. 
C) A credit to an unearned revenue account. 
D) A credit to a prepaid expense account. 
E) No entry is required at the time of collection. 
A) A debit to an unearned revenue account. 
B) A debit to a prepaid expense account. 
C) A credit to an unearned revenue account. 
D) A credit to a prepaid expense account. 
E) No entry is required at the time of collection.

Question 8

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

Accepted Answer

A) Accounts Payable;Cash;Supplies. 
B) Unearned Revenue;Accounts Payable;Owner's Withdrawals. 
C) Building;Prepaid Insurance;Supplies Expense. 
D) Cash;Prepaid Insurance;Equipment. 
E) Notes Payable;Cash;Owner's Withdrawals. 
A) Accounts Payable;Cash;Supplies. 
B) Unearned Revenue;Accounts Payable;Owner's Withdrawals. 
C) Building;Prepaid Insurance;Supplies Expense. 
D) Cash;Prepaid Insurance;Equipment. 
E) Notes Payable;Cash;Owner's Withdrawals.

Question 9

During the month of March,Harley's Computer Services made purchases on account totaling $43,500.Also during the month of March,Harley was paid $8,000 by a customer for services to be provided in the future and paid $36,900 of cash on its accounts payable balance.If the balance in the accounts payable account at the beginning of March was $77,300,what is the balance in accounts payable at the end of March?

Accepted Answer

A) $83,900. 
B) $91,900. 
C) $6,600. 
D) $75,900. 
E) $4,900. 
A) $83,900. 
B) $91,900. 
C) $6,600. 
D) $75,900. 
E) $4,900.

Question 10

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 debit.What effect would this error have on the trial balance?

Accepted Answer

A) The total of the Debit column of the trial balance will exceed the total of the Credit column by $4,700. 
B) The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700. 
C) The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400. 
D) The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400. 
E) The total of the Debit column of the trial balance will equal the total of the Credit column. 
A) The total of the Debit column of the trial balance will exceed the total of the Credit column by $4,700. 
B) The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700. 
C) The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400. 
D) The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400. 
E) The total of the Debit column of the trial balance will equal the total of the Credit column.

Question 11

Able Graphics received a $400 utility bill for the current month's electricity.It is not due until the end of the next month which is when they intend to pay it.Which of the following general journal entries will Able Graphics make to record this transaction?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 12

Source documents provide evidence of business transactions and are the basis for accounting entries.

Accepted Answer

A) True 
 B)False

Question 13

Unearned revenues are classified as liabilities.

Accepted Answer

A) True 
 B)False

Question 14

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided.Which of the following general journal entries will Trimble Graphic Design make to record this transaction?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 15

At the end of its first month of operations,Michael's Consulting Services reported net income of $25,000.They also had account balances of: Cash,$18,000;Office Supplies,$2,000 and Accounts Receivable $10,000.The owner's total investment for this first month was $5,000. Calculate the ending balance in the Owner's Capital account to be reported on the Statement of Owner's Equity.

Accepted Answer

A) $30,000 
B) $25,000 
C) $20,000 
D) $5,000 
E) $7,000 
A) $30,000 
B) $25,000 
C) $20,000 
D) $5,000 
E) $7,000

Question 16

Unearned revenues are generally:

Accepted Answer

A) Revenues that have been earned and received in cash. 
B) Revenues that have been earned but not yet collected in cash. 
C) Liabilities created when a customer pays in advance for products or services before the revenue is earned. 
D) Recorded as an asset in the accounting records. 
E) Increases to owners' capital. 
A) Revenues that have been earned and received in cash. 
B) Revenues that have been earned but not yet collected in cash. 
C) Liabilities created when a customer pays in advance for products or services before the revenue is earned. 
D) Recorded as an asset in the accounting records. 
E) Increases to owners' capital.

Question 17

Debit means increase and credit means decrease for all accounts.

Accepted Answer

A) True 
 B)False

Question 18

On a trial balance,if the Debit and Credit column totals are equal,then:

Accepted Answer

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) Equal debits and credits have been recorded for transactions. 
E) The balance sheet would be correct. 
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) Equal debits and credits have been recorded for transactions. 
E) The balance sheet would be correct.

Question 19

All of the following are asset accounts except:

Accepted Answer

A) Accounts Receivable. 
B) Buildings. 
C) Supplies expense. 
D) Equipment. 
E) Prepaid insurance. 
A) Accounts Receivable. 
B) Buildings. 
C) Supplies expense. 
D) Equipment. 
E) Prepaid insurance.

Question 20

A debit is used to record which of the following:

Accepted Answer

A) A decrease in an asset account. 
B) A decrease in an expense account. 
C) An increase in a revenue account. 
D) An increase in the owner's capital account. 
E) An increase in the owner's withdrawals account. 
A) A decrease in an asset account. 
B) A decrease in an expense account. 
C) An increase in a revenue account. 
D) An increase in the owner's capital account. 
E) An increase in the owner's withdrawals account.

Exam 2: Analyzing and Recording Transactions

An account balance is:

A bookkeeper has debited an account for $3,500 and credited a liability account for $2,000.Which of the following would be an incorrect way to complete the recording of this transaction:

Select the account below that normally has a credit balance.

The process of transferring general journal entry information to the ledger is called:

J.Smith withdrew $100 from Jay's Limo Services for personal use.Which of the following general journal entries will Jay's Limo Services make to record this transaction?

A journal entry that affects no more than two accounts is called a compound entry.

If cash is received from customers in payment for products or services that have not yet been delivered to the customers,the business would record the cash receipt as:

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 debit.What effect would this error have on the trial balance?

Able Graphics received a $400 utility bill for the current month's electricity.It is not due until the end of the next month which is when they intend to pay it.Which of the following general journal entries will Able Graphics make to record this transaction?

Source documents provide evidence of business transactions and are the basis for accounting entries.

Unearned revenues are classified as liabilities.

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided.Which of the following general journal entries will Trimble Graphic Design make to record this transaction?

Unearned revenues are generally:

Debit means increase and credit means decrease for all accounts.

On a trial balance,if the Debit and Credit column totals are equal,then:

All of the following are asset accounts except:

A debit is used to record which of the following:

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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