Question 1

A credit to an asset account was posted to the Capital account. This error would cause

Accepted Answer

A)  assets to be overstated. 
B)  liabilities to be overstated. 
C)  Capital to be understated. 
D)  Both A and C are correct. 
A)  assets to be overstated. 
B)  liabilities to be overstated. 
C)  Capital to be understated. 
D)  Both A and C are correct. A

Question 2

Regarding the preparation of financial statements, which of the following is TRUE?

Accepted Answer

A)  The left column of the Income statement is used only to sub-total amounts. 
B)  Financial statements have debit and credit columns. 
C)  The Balance Sheet is prepared first. 
D)  Each amount on the Balance Sheet can be found on the Trial Balance. (careful!) 
A)  The left column of the Income statement is used only to sub-total amounts. 
B)  Financial statements have debit and credit columns. 
C)  The Balance Sheet is prepared first. 
D)  Each amount on the Balance Sheet can be found on the Trial Balance. (careful!) A

Question 3

The Accounts Receivable account is

Accepted Answer

A)  a revenue, and it has a normal debit balance. 
B)  an expense, and it has a normal credit balance. 
C)  an asset, and it has a normal debit balance. 
D)  a liability, and it has a normal credit balance. 
A)  a revenue, and it has a normal debit balance. 
B)  an expense, and it has a normal credit balance. 
C)  an asset, and it has a normal debit balance. 
D)  a liability, and it has a normal credit balance. C

Question 4

Which of the statements of the rules of debit and credit is TRUE?

Accepted Answer

A)  Decrease Accounts Receivable with a credit and the normal balance is a credit. 
B)  Increase Accounts Payable with a credit and the normal balance is a credit. 
C)  Increase Capital with a debit and the normal balance is a debit. 
D)  Decrease Cash with a debit and the normal balance is a debit. 
A)  Decrease Accounts Receivable with a credit and the normal balance is a credit. 
B)  Increase Accounts Payable with a credit and the normal balance is a credit. 
C)  Increase Capital with a debit and the normal balance is a debit. 
D)  Decrease Cash with a debit and the normal balance is a debit.

Question 5

The debit side is always the right side of the account.

Accepted Answer

A) True 
 B)False

Question 6

The business bought supplies on account. To record this,

Accepted Answer

A)  an expense is debited and a liability is credited. 
B)  an asset is debited and an asset is credited. 
C)  an asset is debited and a liability is credited. 
D)  None of these are correct. 
A)  an expense is debited and a liability is credited. 
B)  an asset is debited and an asset is credited. 
C)  an asset is debited and a liability is credited. 
D)  None of these are correct.

Question 7

The side that increases the account balance, by the rules of debit and credit, is said to be the

Accepted Answer

A)  debit side. 
B)  credit side. 
C)  normal balance. 
D)  None of these answers are correct. 
A)  debit side. 
B)  credit side. 
C)  normal balance. 
D)  None of these answers are correct.

Question 8

Identify whether a debit or credit would be correct for each of the following account changes. Use a Dr. (debit) or Cr. (credit) in the space provided.
________ 1. Increase Delivery Van
________ 2. Decrease Accounts Receivable
________ 3. Decrease Accounts Payable
________ 4. Increase Salaries Expense
________ 5. Increase Service Fees
________ 6. Decrease Cash
________ 7. Increase S. McCrae, Capital
________ 8. Increase S. McCrae, Withdrawals
________ 9. Increase Rent Expense
________ 10. Decrease Equipment

Accepted Answer

1. Dr.
2. Cr.
3. Dr.

Question 9

Revenues are recorded when earned.

Accepted Answer

A) True 
 B)False

Question 10

When recording transactions in two or more accounts and the totals of the debits and credits are equal, it is called

Accepted Answer

A)  debiting. 
B)  crediting. 
C)  posting. 
D)  double-entry bookkeeping. 
A)  debiting. 
B)  crediting. 
C)  posting. 
D)  double-entry bookkeeping.

Question 11

A debit to a liability account was posted to the Capital account. This error would cause

Accepted Answer

A)  assets to be overstated. 
B)  liabilities to be overstated. 
C)  Capital to be overstated. 
D)  None of the above are correct. 
A)  assets to be overstated. 
B)  liabilities to be overstated. 
C)  Capital to be overstated. 
D)  None of the above are correct.

Question 12

Equipment is an example of a liability.

Accepted Answer

A) True 
 B)False

Question 13

A credit to an asset account was posted to a revenue account. This error would cause

Accepted Answer

A)  assets to be overstated. 
B)  revenue to be overstated. 
C)  expenses to be overstated. 
D)  Both A and B are correct. 
A)  assets to be overstated. 
B)  revenue to be overstated. 
C)  expenses to be overstated. 
D)  Both A and B are correct.

Question 14

A debit to an asset account was posted to a liability account. This error would cause

Accepted Answer

A)  assets to be understated. 
B)  liabilities to be overstated. 
C)  Capital to be overstated. 
D)  None of the above are correct. 
A)  assets to be understated. 
B)  liabilities to be overstated. 
C)  Capital to be overstated. 
D)  None of the above are correct.

Question 15

At least two accounts are affected in every transaction.

Accepted Answer

A) True 
 B)False

Question 16

Cash is debited when the business makes a payment for utilities.

Accepted Answer

A) True 
 B)False

Question 17

Debit and credit columns are not used on the financial reports.

Accepted Answer

A) True 
 B)False

Question 18

What device is used to record the increases and decreases caused by business transactions to individual assets, liabilities, and owner's equity?

Accepted Answer

A)  Chart of accounts 
B)  Account 
C)  Trial Balance 
D)  Footings 
A)  Chart of accounts 
B)  Account 
C)  Trial Balance 
D)  Footings

Question 19

An account had a starting debit balance of $350. There were debit postings of $400 and credit postings of $200 during the month. The ending balance is

Accepted Answer

A)  $550 debit. 
B)  $450 credit. 
C)  $950 debit. 
D)  $200 debit. 
A)  $550 debit. 
B)  $450 credit. 
C)  $950 debit. 
D)  $200 debit.

Question 20

The Beginning Capital account would appear on which financial statement?

Accepted Answer

A)  Statement of owner's equity 
B)  Balance sheet 
C)  Income statement 
D)  None of these answers are correct. 
A)  Statement of owner's equity 
B)  Balance sheet 
C)  Income statement 
D)  None of these answers are correct.

A credit to an asset account was posted to the Capital account. This error would cause

Regarding the preparation of financial statements, which of the following is TRUE?

The Accounts Receivable account is

Which of the statements of the rules of debit and credit is TRUE?

The debit side is always the right side of the account.

The business bought supplies on account. To record this,

The side that increases the account balance, by the rules of debit and credit, is said to be the

Revenues are recorded when earned.

When recording transactions in two or more accounts and the totals of the debits and credits are equal, it is called

A debit to a liability account was posted to the Capital account. This error would cause

Equipment is an example of a liability.

A credit to an asset account was posted to a revenue account. This error would cause

A debit to an asset account was posted to a liability account. This error would cause

At least two accounts are affected in every transaction.

Cash is debited when the business makes a payment for utilities.

Debit and credit columns are not used on the financial reports.

What device is used to record the increases and decreases caused by business transactions to individual assets, liabilities, and owner's equity?

An account had a starting debit balance of $350. There were debit postings of $400 and credit postings of $200 during the month. The ending balance is

The Beginning Capital account would appear on which financial statement?

Accounting Concepts and Procedures: an Introduction

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

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Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

A credit to an asset account was posted to the Capital account. This error would cause

Regarding the preparation of financial statements, which of the following is TRUE?

The Accounts Receivable account is

Which of the statements of the rules of debit and credit is TRUE?

The debit side is always the right side of the account.

The business bought supplies on account. To record this,

The side that increases the account balance, by the rules of debit and credit, is said to be the

Revenues are recorded when earned.

When recording transactions in two or more accounts and the totals of the debits and credits are equal, it is called

A debit to a liability account was posted to the Capital account. This error would cause

Equipment is an example of a liability.

A credit to an asset account was posted to a revenue account. This error would cause

A debit to an asset account was posted to a liability account. This error would cause

At least two accounts are affected in every transaction.

Cash is debited when the business makes a payment for utilities.

Debit and credit columns are not used on the financial reports.

What device is used to record the increases and decreases caused by business transactions to individual assets, liabilities, and owner's equity?

An account had a starting debit balance of $350. There were debit postings of $400 and credit postings of $200 during the month. The ending balance is

The Beginning Capital account would appear on which financial statement?

Accounting Concepts and Procedures: an Introduction

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters