Question 1

A company posted a $6000 debit to Cash as $600. The credit of $6000 to Service Revenue in the entry was posted correctly. Is the trial balance out of balance?

Accepted Answer

A) No. 
B) Yes, by $600. 
C) Yes, by $5400. 
D) Yes, by $6000. 
A) No. 
B) Yes, by $600. 
C) Yes, by $5400. 
D) Yes, by $6000.

Question 2

A company completed the following transactions during the month of October: I. Purchased office supplies on account, $5600.
II. Provided services for cash, $22,000.
III. Provided services on account, $36,000.
IV. Collected cash from a customer on account, $27,000.
V. Paid the monthly rent of $3800.
What was the company's total revenue for the month?

Accepted Answer

A) $22,000 
B) $36,000 
C) $58,000 
D) $85,000 
A) $22,000 
B) $36,000 
C) $58,000 
D) $85,000

Question 3

A business purchased office supplies of $10,000 on account. The business would:

Accepted Answer

A) debit Accounts Receivable for $10,000 and credit Supplies for $10,000. 
B) debit Supplies for $10,000 and credit Cash for $10,000. 
C) debit Accounts Payable for $10,000 and credit Supplies for $10,000. 
D) debit Supplies for $10,000 and credit Accounts Payable for $10,000. 
A) debit Accounts Receivable for $10,000 and credit Supplies for $10,000. 
B) debit Supplies for $10,000 and credit Cash for $10,000. 
C) debit Accounts Payable for $10,000 and credit Supplies for $10,000. 
D) debit Supplies for $10,000 and credit Accounts Payable for $10,000.

Question 4

In order to see a complete transaction in one place, you would need to look at the:

Accepted Answer

A) trial balance. 
B) ledger. 
C) journal. 
D) financial statements. 
A) trial balance. 
B) ledger. 
C) journal. 
D) financial statements.

Question 5

The trial balance summarizes all the account balances for the financial statements and shows whether total debits equal total credits.

Accepted Answer

A) True 
 B)False

Question 6

On May 10, a business collected $3300 on account. What journal entry is needed on that date?

Accepted Answer

A) Debit Cash for $3300 and credit Revenue for $3300. 
B) Debit Accounts Receivable for $3300 and credit Revenue for $3300. 
C) Debit Cash for $3300 and credit Accounts Receivable for $3300. 
D) Debit Accounts Payable for $3300 and credit Revenue for $3300. 
A) Debit Cash for $3300 and credit Revenue for $3300. 
B) Debit Accounts Receivable for $3300 and credit Revenue for $3300. 
C) Debit Cash for $3300 and credit Accounts Receivable for $3300. 
D) Debit Accounts Payable for $3300 and credit Revenue for $3300.

Question 7

Prepaid rent is an expense because the payment provides a future benefit of the company.

Accepted Answer

A) True 
 B)False

Question 8

An owner makes an investment of cash into the business and receives shares of stock. This transaction is recorded as a:

Accepted Answer

A) debit to Common Stock and a credit to Cash. 
B) debit to Cash and a credit to Common Stock. 
C) debit to Cash and a credit to Retained Earnings. 
D) debit to Cash and a credit to Stockholder Revenue. 
A) debit to Common Stock and a credit to Cash. 
B) debit to Cash and a credit to Common Stock. 
C) debit to Cash and a credit to Retained Earnings. 
D) debit to Cash and a credit to Stockholder Revenue.

Question 9

A transaction that includes a debit to an expense and a credit to a liability indicates that:

Accepted Answer

A) revenues increased. 
B) expenses decreased. 
C) liabilities increased. 
D) liabilities decreased. 
A) revenues increased. 
B) expenses decreased. 
C) liabilities increased. 
D) liabilities decreased.

Question 10

If a company declares and pays a dividend to its stockholders, both cash and expenses will decrease.

Accepted Answer

A) True 
 B)False

Question 11

The trial balance is used to prepare the:

Accepted Answer

A) balance sheet only. 
B) income statement only. 
C) statement of retained earnings only. 
D) all of the above. 
A) balance sheet only. 
B) income statement only. 
C) statement of retained earnings only. 
D) all of the above.

Question 12

When a business purchases land with a note payable:

Accepted Answer

A) both assets and stockholders' equity are increased. 
B) assets are decreased and stockholder's equity is increased. 
C) both assets and liabilities are increased. 
D) assets are increased and liabilities are decreased. 
A) both assets and stockholders' equity are increased. 
B) assets are decreased and stockholder's equity is increased. 
C) both assets and liabilities are increased. 
D) assets are increased and liabilities are decreased.

Question 13

A bookkeeper posted the same journal entry twice. This will cause the trial balance to be out of balance.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following transactions would decrease an asset and decrease stockholders' equity?

Accepted Answer

A) payment of an accounts payable 
B) performance of a service for a client on account 
C) borrowing money from the bank for thirty days 
D) declaration and payment of a dividend to the shareholders 
A) payment of an accounts payable 
B) performance of a service for a client on account 
C) borrowing money from the bank for thirty days 
D) declaration and payment of a dividend to the shareholders

Question 15

Muddle Company performs a service for one of its customers and immediately collects the cash. This transaction will:

Accepted Answer

A) have no effect on liabilities. 
B) decrease net income. 
C) decrease Retained Earnings. 
D) increase Accounts Receivable. 
A) have no effect on liabilities. 
B) decrease net income. 
C) decrease Retained Earnings. 
D) increase Accounts Receivable.

Question 16

If a journal entry includes a debit to Accounts Payable and a credit to Cash:

Accepted Answer

A) Cash will have a credit balance. 
B) Accounts Payable is increased. 
C) Cash is increased. 
D) Accounts Payable is decreased. 
A) Cash will have a credit balance. 
B) Accounts Payable is increased. 
C) Cash is increased. 
D) Accounts Payable is decreased.

Question 17

When using a four-column ledger account format, the pair of columns on the far right is used to show the:

Accepted Answer

A) names of the accounts being debited and credited. 
B) transaction dates and journal reference. 
C) account balance. 
D) debit and credit amounts posted from journal entries. 
A) names of the accounts being debited and credited. 
B) transaction dates and journal reference. 
C) account balance. 
D) debit and credit amounts posted from journal entries.

Question 18

Decreases in stockholders' equity that result from the cost of operating the business are:

Accepted Answer

A) assets. 
B) revenues. 
C) expenses. 
D) liabilities. 
A) assets. 
B) revenues. 
C) expenses. 
D) liabilities.

Question 19

Complete the following chart indicating if the account is increased with a debit or a credit.

Accepted Answer

The answer of Complete the following chart indicating if the...

Question 20

Which of the following is a CORRECT statement about a chart of accounts?

Accepted Answer

A) It lists the income statement accounts first. 
B) It can be used to determine the balance in an account. 
C) It is a tool used by accountants to help prepare the financial statements. 
D) It lists the balance sheet accounts first. 
A) It lists the income statement accounts first. 
B) It can be used to determine the balance in an account. 
C) It is a tool used by accountants to help prepare the financial statements. 
D) It lists the balance sheet accounts first.

A company posted a $6000 debit to Cash as $600. The credit of $6000 to Service Revenue in the entry was posted correctly. Is the trial balance out of balance?

A business purchased office supplies of $10,000 on account. The business would:

In order to see a complete transaction in one place, you would need to look at the:

The trial balance summarizes all the account balances for the financial statements and shows whether total debits equal total credits.

On May 10, a business collected $3300 on account. What journal entry is needed on that date?

Prepaid rent is an expense because the payment provides a future benefit of the company.

An owner makes an investment of cash into the business and receives shares of stock. This transaction is recorded as a:

A transaction that includes a debit to an expense and a credit to a liability indicates that:

If a company declares and pays a dividend to its stockholders, both cash and expenses will decrease.

The trial balance is used to prepare the:

When a business purchases land with a note payable:

A bookkeeper posted the same journal entry twice. This will cause the trial balance to be out of balance.

Which of the following transactions would decrease an asset and decrease stockholders' equity?

Muddle Company performs a service for one of its customers and immediately collects the cash. This transaction will:

If a journal entry includes a debit to Accounts Payable and a credit to Cash:

When using a four-column ledger account format, the pair of columns on the far right is used to show the:

Decreases in stockholders' equity that result from the cost of operating the business are:

Complete the following chart indicating if the account is increased with a debit or a credit.

Which of the following is a CORRECT statement about a chart of accounts?

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

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Exam 2: Transaction Analysis

A company posted a $6000 debit to Cash as $600. The credit of $6000 to Service Revenue in the entry was posted correctly. Is the trial balance out of balance?

A business purchased office supplies of $10,000 on account. The business would:

In order to see a complete transaction in one place, you would need to look at the:

The trial balance summarizes all the account balances for the financial statements and shows whether total debits equal total credits.

On May 10, a business collected $3300 on account. What journal entry is needed on that date?

Prepaid rent is an expense because the payment provides a future benefit of the company.

An owner makes an investment of cash into the business and receives shares of stock. This transaction is recorded as a:

A transaction that includes a debit to an expense and a credit to a liability indicates that:

If a company declares and pays a dividend to its stockholders, both cash and expenses will decrease.

The trial balance is used to prepare the:

When a business purchases land with a note payable:

A bookkeeper posted the same journal entry twice. This will cause the trial balance to be out of balance.

Which of the following transactions would decrease an asset and decrease stockholders' equity?

Muddle Company performs a service for one of its customers and immediately collects the cash. This transaction will:

If a journal entry includes a debit to Accounts Payable and a credit to Cash:

When using a four-column ledger account format, the pair of columns on the far right is used to show the:

Decreases in stockholders' equity that result from the cost of operating the business are:

Complete the following chart indicating if the account is increased with a debit or a credit.

Which of the following is a CORRECT statement about a chart of accounts?

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

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