Question 1

If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100.

Accepted Answer

A) True 
 B)False  False

Question 2

Another name for the balance sheet is the statement of financial position.

Accepted Answer

A) True 
 B)False  True

Question 3

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

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. B

Question 4

Which of the following statements is correct?

Accepted Answer

A)  When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense. 
B)  Promises of future payment are called accounts payable. 
C)  Increases and decreases in cash are always recorded in the retained earnings account. 
D)  An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. 
E)  Liabilities include accounts receivable. 
A)  When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense. 
B)  Promises of future payment are called accounts payable. 
C)  Increases and decreases in cash are always recorded in the retained earnings account. 
D)  An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. 
E)  Liabilities include accounts receivable.

Question 5

A company had total assets of $350,000; total liabilities of $101,500; and total equity of $248,500. Calculate its debt ratio.

Accepted Answer

$101,500/$

Question 6

The chart of accounts is a list of all the accounts used by a company and a corresponding identification number.

Accepted Answer

A) True 
 B)False

Question 7

The following trial balance was prepared from the general ledger of Hal's Auto Repair.
   Since the trial balance did not balance, you decided to examine the accounting records. You found that the following errors had been made:
1. A purchase of supplies on account for $245 was posted as a debit to Supplies and as a debit
to Accounts Payable.
2. An investment of $500 cash by the owner was debited to Common Stock and credited to
Cash.
3. In computing the balance of the Accounts Receivable account, a debit of $600 was omitted
from the computation.
4. One debit of $300 to the Dividends account was posted as a credit.
5. Office equipment purchased for $800 was posted to the Repair Equipment account.
6. One entire entry was not posted to the general ledger. The transaction involved the receipt
of $125 cash at the time repair services were performed.
Prepare a corrected trial balance for the Hal's Auto Repair as of October 31.

Accepted Answer

@#IMG-DLM& a. Cash: Balance $975 + $1,000 (2) + 12

Question 8

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks 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 9

A journal gives a complete record of each transaction in one place and shows the debits and credits for each transaction.

Accepted Answer

A) True 
 B)False

Question 10

Explain the debt ratio and its use in analyzing a company's financial condition.

Accepted Answer

The debt ratio is calculated by dividing

Question 11

On October 1, 2011, Smith invested $20,000 cash, office equipment costing $15,000, and drafting equipment costing $12,000 into the company in exchange for common stock. Show the general journal entry to record this transaction.

Accepted Answer

The answer of On October 1, 2011, Smith invested $20,000...

Question 12

Describe source documents and their purpose.

Accepted Answer

Source documents are the basis of inform

Question 13

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

Accepted Answer

A)  Recorded as a debit to an unearned revenue account. 
B)  Recorded as a debit to a prepaid expense account. 
C)  Recorded as a credit to an unearned revenue account. 
D)  Recorded as a credit to a prepaid expense account. 
E)  Not recorded in the accounting records until the earnings process is complete. 
A)  Recorded as a debit to an unearned revenue account. 
B)  Recorded as a debit to a prepaid expense account. 
C)  Recorded as a credit to an unearned revenue account. 
D)  Recorded as a credit to a prepaid expense account. 
E)  Not recorded in the accounting records until the earnings process is complete.

Question 14

On February 5, Textron Stores purchased a van that had a cost of $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.

Accepted Answer

The answer of On February 5, Textron Stores purchased a...

Question 15

Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability, (L) or equity (OE) by placing initials (R, E, A, L, or OE) in the blanks.

Accepted Answer

The answer of Identify each of the following accounts as...

Question 16

Jones Hardware, Inc. paid a cash dividend of $6,000. What is the necessary entry to record this transaction?

Accepted Answer

A)  Debit Cash, credit Retained Earnings. 
B)  Debit Dividends, credit Cash. 
C)  Debit Common Stock, credit Cash. 
D)  Debit Cash, credit Common Stock. 
E)  Debit Cash, credit Dividend Income. 
A)  Debit Cash, credit Retained Earnings. 
B)  Debit Dividends, credit Cash. 
C)  Debit Common Stock, credit Cash. 
D)  Debit Cash, credit Common Stock. 
E)  Debit Cash, credit Dividend Income.

Question 17

For each of the following errors, indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit) will have the larger total as a result of the error.
a. $100 debit to Cash was debited to the Cash account twice.
b. $1,900 credit to Sales was posted as a $190 credit.
c. $5,000 debit to Office Equipment was debited to Office Supplies.
d. $625 debit to Prepaid Insurance was posted as a $62.50 debit.
e. $520 credit to Accounts Payable was not posted.
 $\begin{array}{|c|c|c|}
\hline \text { Error } & \begin{array}{c}
\text { Amount Out of } \
\text { Balance }
\end{array} & \begin{array}{c}
\text { Column Having } \
\text { Larger Total }
\end{array} \
\hline \text { a. } & & \
\hline \text { b. } & & \
\hline \text { c. } & & \
\hline \text { d. } & & \
\hline \text { e. } & & \
\hline
\end{array}$

Accepted Answer

The answer of For each of the following errors, indicate...

Question 18

Which of the following statements is correct?

Accepted Answer

A)  The left side of a T-account is the credit side. 
B)  Debits decrease asset and expense accounts and increase liability, equity, and revenue accounts. 
C)  The left side of a T-account is the debit side. 
D)  Credits increase asset and expense accounts and decrease liability, equity, and revenue accounts. 
E)  In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction. 
A)  The left side of a T-account is the credit side. 
B)  Debits decrease asset and expense accounts and increase liability, equity, and revenue accounts. 
C)  The left side of a T-account is the debit side. 
D)  Credits increase asset and expense accounts and decrease liability, equity, and revenue accounts. 
E)  In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction.

Question 19

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

Accepted Answer

A) True 
 B)False

Question 20

The dividends account normally has a credit balance since it is an equity account.

Accepted Answer

A) True 
 B)False

If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100.

Another name for the balance sheet is the statement of financial position.

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

Which of the following statements is correct?

A company had total assets of $350,000; total liabilities of $101,500; and total equity of $248,500. Calculate its debt ratio.

The chart of accounts is a list of all the accounts used by a company and a corresponding identification number.

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

A journal gives a complete record of each transaction in one place and shows the debits and credits for each transaction.

Explain the debt ratio and its use in analyzing a company's financial condition.

On October 1, 2011, Smith invested $20,000 cash, office equipment costing $15,000, and drafting equipment costing $12,000 into the company in exchange for common stock. Show the general journal entry to record this transaction.

Describe source documents and their purpose.

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

On February 5, Textron Stores purchased a van that had a cost of $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.

Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability, (L) or equity (OE) by placing initials (R, E, A, L, or OE) in the blanks.

Jones Hardware, Inc. paid a cash dividend of $6,000. What is the necessary entry to record this transaction?

Which of the following statements is correct?

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

The dividends account normally has a credit balance since it is an equity account.

Introducing Financial Accounting

Preparing Financial Statements

Accounting for Merchandising Operations

Accounting for Inventories

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 2: Accounting for Transactions

If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100.

Another name for the balance sheet is the statement of financial position.

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

Which of the following statements is correct?

A company had total assets of $350,000; total liabilities of $101,500; and total equity of $248,500. Calculate its debt ratio.

The chart of accounts is a list of all the accounts used by a company and a corresponding identification number.

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

A journal gives a complete record of each transaction in one place and shows the debits and credits for each transaction.

Explain the debt ratio and its use in analyzing a company's financial condition.

On October 1, 2011, Smith invested $20,000 cash, office equipment costing $15,000, and drafting equipment costing $12,000 into the company in exchange for common stock. Show the general journal entry to record this transaction.

Describe source documents and their purpose.

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

On February 5, Textron Stores purchased a van that had a cost of $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.

Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability, (L) or equity (OE) by placing initials (R, E, A, L, or OE) in the blanks.

Jones Hardware, Inc. paid a cash dividend of $6,000. What is the necessary entry to record this transaction?

Which of the following statements is correct?

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

The dividends account normally has a credit balance since it is an equity account.

Introducing Financial Accounting

Preparing Financial Statements

Accounting for Merchandising Operations

Accounting for Inventories

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters