Question 1

What types of account balances are increased by credits?

Accepted Answer

A)  Liabilities and expenses 
B)  Liabilities and revenues 
C)  Revenues and expenses 
D)  Owners' equity and expenses 
E)  Assets and Liabilities 
A)  Liabilities and expenses 
B)  Liabilities and revenues 
C)  Revenues and expenses 
D)  Owners' equity and expenses 
E)  Assets and Liabilities B

Question 2

Explain the steps in processing transactions in an accounting system.

Accepted Answer

Business transactions and events are documented by source documents. These source documents are analyzed for the effects of the transactions and events on the accounting records. The information is recorded into the accounting system. The information is then posted to the accounts and organized in the trial balance. The final step is the preparation of financial statements and reports for decision makers.

Question 3

A record of all accounts used by a business is called a

Accepted Answer

A)  journal 
B)  book of original entry 
C)  general journal 
D)  trial balance 
E)  ledger 
A)  journal 
B)  book of original entry 
C)  general journal 
D)  trial balance 
E)  ledger E

Question 4

A revenue account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 5

Cash withdrawn by the owner of an unincorporated business in the form of a monthly salary should be treated as an expense of the business.

Accepted Answer

A) True 
 B)False

Question 6

A ledger is a type of account.

Accepted Answer

A) True 
 B)False

Question 7

Double-entry accounting means that every transaction affects and is recorded in at least two accounts.

Accepted Answer

A) True 
 B)False

Question 8

A list of all accounts used by a company, including the identification number assigned to each account, is called a

Accepted Answer

A)  ledger 
B)  journal 
C)  trial balance 
D)  chart of accounts 
E)  general journal 
A)  ledger 
B)  journal 
C)  trial balance 
D)  chart of accounts 
E)  general journal

Question 9

An unconditional written promise to pay a definite sum of money on demand or on a defined future date (or dates) is a(n)

Accepted Answer

A)  unearned revenue 
B)  prepaid expense 
C)  account payable 
D)  notes receivable 
E)  account receivable 
A)  unearned revenue 
B)  prepaid expense 
C)  account payable 
D)  notes receivable 
E)  account receivable

Question 10

A $130 credit to Office Equipment was credited to Sales by mistake. By what amounts are the accounts under- or overstated as a result of this error?

Accepted Answer

A)  Office Equipment, understated $130; Sales, overstated $130 
B)  Office Equipment, understated $260; Sales, overstated $130 
C)  Office Equipment, overstated $130; Sales, overstated $130 
D)  Office Equipment, overstated $130; Sales, understated $130 
E)  Office Equipment, overstated $260; Sales, understated $130 
A)  Office Equipment, understated $130; Sales, overstated $130 
B)  Office Equipment, understated $260; Sales, overstated $130 
C)  Office Equipment, overstated $130; Sales, overstated $130 
D)  Office Equipment, overstated $130; Sales, understated $130 
E)  Office Equipment, overstated $260; Sales, understated $130

Question 11

Charlene Addemup prepared the following trial balance from the general ledger of Big Bang Cleaning Service. It did not balance.
Big Bang Cleaning Service
Trial Balance
December 31, 2020
   Because the trial balance did not balance, Charlene decided to examine the accounting records very closely. She found that the following errors had been made:
   Prepare a corrected trial balance for the Big Blue Cleaning Service at December 31, 2020.

Accepted Answer

The answer of Charlene Addemup prepared the following trial balance...

Question 12

A credit is used to record

Accepted Answer

A)  a decrease in an expense account 
B)  a decrease in an asset account 
C)  an increase in an unearned revenue account 
D)  an increase in a revenue account 
E)  All of these 
A)  a decrease in an expense account 
B)  a decrease in an asset account 
C)  an increase in an unearned revenue account 
D)  an increase in a revenue account 
E)  All of these

Question 13

To make it easier for the bookkeeper, the cost of land is separated from the cost of buildings located on the land.

Accepted Answer

A) True 
 B)False

Question 14

A building is an example of an asset that does not provide any benefit to its owner.

Accepted Answer

A) True 
 B)False

Question 15

Cheryl Fereday began an engineering design company and during the month of October completed these transactions:(a) Began business by investing cash, $11,000, and computer equipment with a fair value of $3,000.(b) Paid rent for one year in advance, $3,000.(c) Completed a beam design and billed the client for $3,000.(d) Paid the utilities bill for the month, $100.(e) Wrote a $1,000 cheque on the business bank account for personal expenses. Prepare journal entries to record the above transactions. Include a brief description for each entry.

Accepted Answer

The answer of Cheryl Fereday began an engineering design company...

Question 16

List the steps in the accounting cycle.

Accepted Answer

(1) Analyze transactions, (2) Journalize

Question 17

A compound journal entry usually affects three or more accounts.

Accepted Answer

A) True 
 B)False

Question 18

Zen Hatha opened a Yoga Studio and during a short period as a dealer completed these transactions:   What was the total of the debit balances shown in the trial balance prepared after these transactions were posted?

Accepted Answer

A)  $152,300 
B)  $167,700 
C)  $173,95 
D)  $181,900 
E)  $243,620 
A)  $152,300 
B)  $167,700 
C)  $173,95 
D)  $181,900 
E)  $243,620

Question 19

A journal in which transactions are first recorded is

Accepted Answer

A)  a book of original entry 
B)  a ledger 
C)  a book of final entry 
D)  a revenue account 
E)  the cash ledger 
A)  a book of original entry 
B)  a ledger 
C)  a book of final entry 
D)  a revenue account 
E)  the cash ledger

Question 20

A chart of accounts lists the accounts and balances at a specific time.

Accepted Answer

A) True 
 B)False

What types of account balances are increased by credits?

Explain the steps in processing transactions in an accounting system.

A record of all accounts used by a business is called a

A revenue account normally has a debit balance.

Cash withdrawn by the owner of an unincorporated business in the form of a monthly salary should be treated as an expense of the business.

A ledger is a type of account.

Double-entry accounting means that every transaction affects and is recorded in at least two accounts.

A list of all accounts used by a company, including the identification number assigned to each account, is called a

An unconditional written promise to pay a definite sum of money on demand or on a defined future date (or dates) is a(n)

A $130 credit to Office Equipment was credited to Sales by mistake. By what amounts are the accounts under- or overstated as a result of this error?

A credit is used to record

To make it easier for the bookkeeper, the cost of land is separated from the cost of buildings located on the land.

A building is an example of an asset that does not provide any benefit to its owner.

List the steps in the accounting cycle.

A compound journal entry usually affects three or more accounts.

Zen Hatha opened a Yoga Studio and during a short period as a dealer completed these transactions: What was the total of the debit balances shown in the trial balance prepared after these transactions were posted?

A journal in which transactions are first recorded is

A chart of accounts lists the accounts and balances at a specific time.

Accounting in Business

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters

Exam 2: Analyzing and Recording Transactions

What types of account balances are increased by credits?

Explain the steps in processing transactions in an accounting system.

A record of all accounts used by a business is called a

A revenue account normally has a debit balance.

Cash withdrawn by the owner of an unincorporated business in the form of a monthly salary should be treated as an expense of the business.

A ledger is a type of account.

Double-entry accounting means that every transaction affects and is recorded in at least two accounts.

A list of all accounts used by a company, including the identification number assigned to each account, is called a

An unconditional written promise to pay a definite sum of money on demand or on a defined future date (or dates) is a(n)

A $130 credit to Office Equipment was credited to Sales by mistake. By what amounts are the accounts under- or overstated as a result of this error?

A credit is used to record

To make it easier for the bookkeeper, the cost of land is separated from the cost of buildings located on the land.

A building is an example of an asset that does not provide any benefit to its owner.

List the steps in the accounting cycle.

A compound journal entry usually affects three or more accounts.

Zen Hatha opened a Yoga Studio and during a short period as a dealer completed these transactions: What was the total of the debit balances shown in the trial balance prepared after these transactions were posted?

A journal in which transactions are first recorded is

A chart of accounts lists the accounts and balances at a specific time.

Accounting in Business

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters