Question 1

When a company borrows money from the bank, which type of account(s)is(are)increased?

Accepted Answer

A) asset account only 
B) retained earnings only 
C) liability account only 
D) both asset and liability accounts 
A) asset account only 
B) retained earnings only 
C) liability account only 
D) both asset and liability accounts

Question 2

When a company pays an amount it owes a creditor:

Accepted Answer

A) assets are decreased and net income is decreased. 
B) assets are decreased and liabilities are increased. 
C) liabilities are decreased and net income is increased. 
D) assets are decreased and liabilities are decreased. 
A) assets are decreased and net income is decreased. 
B) assets are decreased and liabilities are increased. 
C) liabilities are decreased and net income is increased. 
D) assets are decreased and liabilities are decreased.

Question 3

To compute ending balance of retained earnings on the statement of retained earnings:

Accepted Answer

A) net loss is added to the beginning balance of retained earnings and dividends that were declared and paid are subtracted from the beginning balance of retained earnings. 
B) net income and dividends are both added to the beginning balance of retained earnings. 
C) net loss and dividends are both added to the beginning balance of retained earnings. 
D) net income is added to the beginning balance of retained earnings. 
A) net loss is added to the beginning balance of retained earnings and dividends that were declared and paid are subtracted from the beginning balance of retained earnings. 
B) net income and dividends are both added to the beginning balance of retained earnings. 
C) net loss and dividends are both added to the beginning balance of retained earnings. 
D) net income is added to the beginning balance of retained earnings.

Question 4

Entering a transaction in the journal is also known as booking the journal entry.

Accepted Answer

A) True 
 B)False

Question 5

A company borrowed $24,000 from the bank by signing a long-term note. How does this transaction affect the accounting equation?

Accepted Answer

A) Add $24,000 to Cash and add $24,000 to Accounts Payable. 
B) Add $24,000 to Cash and add $24,000 to Notes Payable. 
C) Add $24,000 to Cash and add $24,000 to Retained Earnings. 
D) Add $24,000 to Accounts Receivable and add $24,000 to Accounts Payable. 
A) Add $24,000 to Cash and add $24,000 to Accounts Payable. 
B) Add $24,000 to Cash and add $24,000 to Notes Payable. 
C) Add $24,000 to Cash and add $24,000 to Retained Earnings. 
D) Add $24,000 to Accounts Receivable and add $24,000 to Accounts Payable.

Question 6

A company recorded a cash payment incorrectly. Accounts Receivable was debited for $900 and Cash was credited for $900. The correct entry would debit Accounts Payable for $900 and credit Cash for $900. Is the trial balance out of balance?

Accepted Answer

A) No. 
B) Yes, by $900. 
C) Yes, by $1800. 
D) Yes, by an indeterminate amount. 
A) No. 
B) Yes, by $900. 
C) Yes, by $1800. 
D) Yes, by an indeterminate amount.

Question 7

The accounts of Yardy Company are as follows on November 30, 2017:   What is the total of the debit column in the trial balance at November 30, 2017?

Accepted Answer

A) $97,300 
B) $112,200 
C) $119,200 
D) $221,500 
A) $97,300 
B) $112,200 
C) $119,200 
D) $221,500

Question 8

A business received the current month's utility bill for $1625, and immediately paid it. Which journal entry is prepared?

Accepted Answer

A) Debit Accounts Payable for $1625 and credit Cash for $1625. 
B) Debit Utilities Payable for $1625 and credit Cash for $1625. 
C) Debit Utilities Expense for $1625 and credit Cash for $1625. 
D) Debit Operating Expense for $1625 and credit Accounts Payable for $1625. 
A) Debit Accounts Payable for $1625 and credit Cash for $1625. 
B) Debit Utilities Payable for $1625 and credit Cash for $1625. 
C) Debit Utilities Expense for $1625 and credit Cash for $1625. 
D) Debit Operating Expense for $1625 and credit Accounts Payable for $1625.

Question 9

A company paid $3900 for supplies that were purchased earlier in the month on account. How does this transaction affect the accounting equation?

Accepted Answer

A) Add $3900 to Supplies and add $3900 to Supplies Expense. 
B) Add $3900 to Supplies Expense and subtract $3900 from Cash. 
C) Add $3900 to Supplies Expense and add $3900 to Cash. 
D) Subtract $3900 from Accounts Payable and subtract $3900 from Cash. 
A) Add $3900 to Supplies and add $3900 to Supplies Expense. 
B) Add $3900 to Supplies Expense and subtract $3900 from Cash. 
C) Add $3900 to Supplies Expense and add $3900 to Cash. 
D) Subtract $3900 from Accounts Payable and subtract $3900 from Cash.

Question 10

Which account includes balances in multiple checking accounts?

Accepted Answer

A) Accounts Receivable 
B) Notes Receivable 
C) Cash 
D) Prepaid Expenses 
A) Accounts Receivable 
B) Notes Receivable 
C) Cash 
D) Prepaid Expenses

Question 11

The normal balance of an account:

Accepted Answer

A) falls on the side where decreases are recorded. 
B) falls on the side where increases are recorded. 
C) must be computed after every transaction. 
D) cannot be computed in a manual accounting system. 
A) falls on the side where decreases are recorded. 
B) falls on the side where increases are recorded. 
C) must be computed after every transaction. 
D) cannot be computed in a manual accounting system.

Question 12

Linda Keller opened a consulting firm, Keller Consulting P.C. During its first month of operations, the following transactions were completed: I. Linda invested $30,000 in the business, which in turn issued common stock to her.
II. The business purchased equipment on account for $63,000.
III. The business provided consulting services on account, $12,000.
IV. The business paid salaries to the receptionist, $2,000.
V. The business received cash from a customer as payment on account $6,000.
VI. The business borrowed $13,000 from the bank, issuing a note payable.
At the end of the month, total liabilities are:

Accepted Answer

A) $13,000. 
B) $63,000. 
C) $76,000. 
D) $75,000. 
A) $13,000. 
B) $63,000. 
C) $76,000. 
D) $75,000.

Question 13

The normal balance of a revenue account is a ________ because revenues increase ________.

Accepted Answer

A) credit; assets 
B) debit; expenses 
C) debit; retained earnings 
D) credit; retained earnings 
A) credit; assets 
B) debit; expenses 
C) debit; retained earnings 
D) credit; retained earnings

Question 14

Which of the following transactions will increase stockholders' equity?

Accepted Answer

A) The company pays a dividend to its shareholders. 
B) The company issues common stock to new shareholders. 
C) The company purchases equipment. 
D) The company makes a payment on account. 
A) The company pays a dividend to its shareholders. 
B) The company issues common stock to new shareholders. 
C) The company purchases equipment. 
D) The company makes a payment on account.

Question 15

Information for the trial balance is obtained from the:

Accepted Answer

A) journal. 
B) ledger. 
C) balance sheet. 
D) income statement. 
A) journal. 
B) ledger. 
C) balance sheet. 
D) income statement.

Question 16

When an expense account is increased:

Accepted Answer

A) an amount is entered on the credit side of the expense account. 
B) an amount is entered on the debit side of the expense account. 
C) cash must always be credited. 
D) stockholders' equity is not affected. 
A) an amount is entered on the credit side of the expense account. 
B) an amount is entered on the debit side of the expense account. 
C) cash must always be credited. 
D) stockholders' equity is not affected.

Question 17

A record of all the changes in a particular asset during a period of time is found in a(n):

Accepted Answer

A) transaction. 
B) trial balance. 
C) prior period's balance sheet. 
D) account. 
A) transaction. 
B) trial balance. 
C) prior period's balance sheet. 
D) account.

Question 18

Which error will be uncovered by a trial balance?

Accepted Answer

A) The bookkeeper recorded the same journal entry three times. 
B) The bookkeeper forgot to record a journal entry for a large amount. 
C) The bookkeeper recorded both the debit and credit of a journal entry as $200 instead of $700. 
D) The bookkeeper recorded a journal entry with a debit of $400 and a credit of $400, as a debit of $400 and a credit of $40. 
A) The bookkeeper recorded the same journal entry three times. 
B) The bookkeeper forgot to record a journal entry for a large amount. 
C) The bookkeeper recorded both the debit and credit of a journal entry as $200 instead of $700. 
D) The bookkeeper recorded a journal entry with a debit of $400 and a credit of $400, as a debit of $400 and a credit of $40.

Question 19

As a practical matter most companies prepare financial statements:

Accepted Answer

A) after every transaction. 
B) only when both the balance sheet and income statement are affected. 
C) at the end of the accounting period. 
D) at the close of every business day. 
A) after every transaction. 
B) only when both the balance sheet and income statement are affected. 
C) at the end of the accounting period. 
D) at the close of every business day.

Question 20

The normal balance of an expense account is a ________ because expenses decrease ________.

Accepted Answer

A) debit; assets 
B) debit; expenses 
C) debit; retained earnings 
D) credit; retained earnings 
A) debit; assets 
B) debit; expenses 
C) debit; retained earnings 
D) credit; retained earnings

When a company borrows money from the bank, which type of account(s)is(are)increased?

When a company pays an amount it owes a creditor:

To compute ending balance of retained earnings on the statement of retained earnings:

Entering a transaction in the journal is also known as booking the journal entry.

A company borrowed $24,000 from the bank by signing a long-term note. How does this transaction affect the accounting equation?

A company recorded a cash payment incorrectly. Accounts Receivable was debited for $900 and Cash was credited for $900. The correct entry would debit Accounts Payable for $900 and credit Cash for $900. Is the trial balance out of balance?

The accounts of Yardy Company are as follows on November 30, 2017: What is the total of the debit column in the trial balance at November 30, 2017?

A business received the current month's utility bill for $1625, and immediately paid it. Which journal entry is prepared?

A company paid $3900 for supplies that were purchased earlier in the month on account. How does this transaction affect the accounting equation?

Which account includes balances in multiple checking accounts?

The normal balance of an account:

The normal balance of a revenue account is a because revenues increase .

Which of the following transactions will increase stockholders' equity?

Information for the trial balance is obtained from the:

When an expense account is increased:

A record of all the changes in a particular asset during a period of time is found in a(n):

Which error will be uncovered by a trial balance?

As a practical matter most companies prepare financial statements:

The normal balance of an expense account is a because expenses decrease .

The Financial Statements

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, Statement of Comprehensive Income

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 2: Transaction Analysis

When a company borrows money from the bank, which type of account(s)is(are)increased?

When a company pays an amount it owes a creditor:

To compute ending balance of retained earnings on the statement of retained earnings:

Entering a transaction in the journal is also known as booking the journal entry.

A company borrowed $24,000 from the bank by signing a long-term note. How does this transaction affect the accounting equation?

A company recorded a cash payment incorrectly. Accounts Receivable was debited for $900 and Cash was credited for $900. The correct entry would debit Accounts Payable for $900 and credit Cash for $900. Is the trial balance out of balance?

The accounts of Yardy Company are as follows on November 30, 2017: What is the total of the debit column in the trial balance at November 30, 2017?

A business received the current month's utility bill for $1625, and immediately paid it. Which journal entry is prepared?

A company paid $3900 for supplies that were purchased earlier in the month on account. How does this transaction affect the accounting equation?

Which account includes balances in multiple checking accounts?

The normal balance of an account:

The normal balance of a revenue account is a ________ because revenues increase ________.

Which of the following transactions will increase stockholders' equity?

Information for the trial balance is obtained from the:

When an expense account is increased:

A record of all the changes in a particular asset during a period of time is found in a(n):

Which error will be uncovered by a trial balance?

As a practical matter most companies prepare financial statements:

The normal balance of an expense account is a ________ because expenses decrease ________.

The Financial Statements

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, Statement of Comprehensive Income

The Statement of Cash Flows

Financial Statement Analysis

Filters

The normal balance of a revenue account is a because revenues increase .

The normal balance of an expense account is a because expenses decrease .