Question 1

According to IFRS, comparative information on financial statements is:

Accepted Answer

A)  Not required. 
B)  Required for publicly traded companies only. 
C)  Required for the preceding period only. 
D)  Required for the last five years. 
E)  Not required, but considered a hallmark for companies of excellence. 
A)  Not required. 
B)  Required for publicly traded companies only. 
C)  Required for the preceding period only. 
D)  Required for the last five years. 
E)  Not required, but considered a hallmark for companies of excellence.

Question 2

Maria Sanchez began business as Sanchez Law Firm on November 1. Record the following November transactions by making entries directly to the T-accounts provided. Then, prepare a trial balance, as of November 30.
a. Sanchez invested $15,000 cash and a law library valued at $6,000 in exchange for common stock.
b. Purchased $7,500 of office equipment from Johnson Bros. on credit.
c. Completed legal work for a client and received $1,500 cash in full payment.
d. Paid Johnson Bros. $3,500 cash in partial settlement of the amount owed.
e. Completed $4,000 of legal work for a client on credit.
f. Paid a $2,000 cash dividend.
g. Received $2,500 cash as partial payment for the legal work completed for the client in (e).
h. Paid $2,500 cash for the legal secretary's salary.

Accepted Answer

The answer of Maria Sanchez began business as Sanchez Law...

Question 3

Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.

Accepted Answer

The answer of Unearned revenue is classified as _______________ that...

Question 4

Explain the recording and posting processes.

Accepted Answer

Information from business transactions a

Question 5

On October 31, a company's Cash account had a normal balance of $7,000. During October, the account was debited for a total of $4,250 and credited for a total of $5,340. What was the balance in the Cash account at the beginning of October?

Accepted Answer

A)  $0 balance 
B)  $1,090 debit balance 
C)  $2,590 credit balance 
D)  $8,090 debit balance 
E)  $9,590 credit balance 
A)  $0 balance 
B)  $1,090 debit balance 
C)  $2,590 credit balance 
D)  $8,090 debit balance 
E)  $9,590 credit balance

Question 6

Accounts are normally decreased by debits.

Accepted Answer

A) True 
 B)False

Question 7

Double-entry accounting is an accounting system:

Accepted Answer

A)  That records each transaction twice. 
B)  That records the effects of transactions and other events in at least two accounts with equal debits and credits. 
C)  In which the impact of each transaction is checked twice to ensure there are no errors. 
D)  That may only be used if T-accounts are used. 
E)  That records the effects of transactions on at least two financial statements. 
A)  That records each transaction twice. 
B)  That records the effects of transactions and other events in at least two accounts with equal debits and credits. 
C)  In which the impact of each transaction is checked twice to ensure there are no errors. 
D)  That may only be used if T-accounts are used. 
E)  That records the effects of transactions on at least two financial statements.

Question 8

Which of the following is the appropriate journal entry if a company hires a new employee?

Accepted Answer

A)  Debit to Cash, credit to Wages Revenue. 
B)  No entry should be made. 
C)  Debit to Wages Expense, credit to Cash. 
D)  Debit to Cash, credit to Wages Expense. 
E)  Debit to Wages Payable, credit to Wages Expense. 
A)  Debit to Cash, credit to Wages Revenue. 
B)  No entry should be made. 
C)  Debit to Wages Expense, credit to Cash. 
D)  Debit to Cash, credit to Wages Expense. 
E)  Debit to Wages Payable, credit to Wages Expense.

Question 9

Match between columns
                        Premises:  Unearned revenues
 Chart of accounts
 Note receivable
 Posting reference column
 Posting
 Trial Balance
 Compound journal entry
 Account
 T-account
 General journal

Accepted Answer

The Answer of The most flexible type of journal, it is...

Question 10

Which of the following formulas can be used to calculate the debt ratio?

Accepted Answer

A)  Total equity/Total liabilities 
B)  Total liabilities/Total equity 
C)  Total liabilities/Total assets 
D)  Total assets/Total liabilities 
E)  Total equity/Total assets 
A)  Total equity/Total liabilities 
B)  Total liabilities/Total equity 
C)  Total liabilities/Total assets 
D)  Total assets/Total liabilities 
E)  Total equity/Total assets

Question 11

Explain debits and credits and their role in the accounting system.

Accepted Answer

Debit refers to the left side of an acco

Question 12

An account used to record the owners' investments in the business is called:

Accepted Answer

A)  Dividends 
B)  Common Stock 
C)  Revenue 
D)  Expense 
E)  Liability 
A)  Dividends 
B)  Common Stock 
C)  Revenue 
D)  Expense 
E)  Liability

Question 13

Accountants at Amalgamated Corporation incorrectly journalized a $50,000 equipment purchase as a debit to Buildings. This error was not discovered before the journal entry was posted. What is the correcting entry?

Accepted Answer

A)  Debit Buildings and credit Equipment for $50,000 each. 
B)  Debit Equipment and credit Buildings for $50,000 each. 
C)  Debit Buildings and credit Equipment for $100,000 each. 
D)  Debit Equipment and credit Buildings for $100,000 each. 
E)  Debit Equipment for $100,000 and credit Buildings for $50,000. 
A)  Debit Buildings and credit Equipment for $50,000 each. 
B)  Debit Equipment and credit Buildings for $50,000 each. 
C)  Debit Buildings and credit Equipment for $100,000 each. 
D)  Debit Equipment and credit Buildings for $100,000 each. 
E)  Debit Equipment for $100,000 and credit Buildings for $50,000.

Question 14

Identify which of the following items would likely serve as a source document by marking an X in the appropriate column. The first one is done as an example.

Accepted Answer

The answer of Identify which of the following items would...

Question 15

Posting is the transfer of the information from each journal entry to the ledger.

Accepted Answer

A) True 
 B)False

Question 16

An asset created by prepayment of an expense 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 17

Preparation of a trial balance is the first step in the analyzing and recording process.

Accepted Answer

A) True 
 B)False

Question 18

Vicki Lake is a computer consultant. Shown below are (a) several accounts in her ledger with each account preceded by an identification number and (b) several transactions completed by Lake. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.
 $\begin{array}{|l|l|l|l|}
\hline \text { 1. } & \text { Accounts Payable } & 7 . & \text { Telephone Expense } \
\hline \text { 2. } & \text { Accounts Receivable } & 8 . & \text { Unearned Consulting Fees } \
\hline \text { 3. } & \text { Cash } & 9 . & \text { Common Stock } \
\hline 4 . & \text { Consulting Fees Earned } & 10 . & \text { Dividends } \
\hline \text { 5. } & \text { Office Supplies } & 11 . & \text { Insurance Expense } \
\hline 6 . & \text { Office Supplies Expense } & 12 . & \text { Prepaid Insurance } \
\hline
\end{array}$

Accepted Answer

The answer of Vicki Lake is a computer consultant. Shown...

Question 19

The journal is known as a book of original entry.

Accepted Answer

A) True 
 B)False

Question 20

If insurance coverage for the next three years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

Accepted Answer

A) True 
 B)False

According to IFRS, comparative information on financial statements is:

Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.

Explain the recording and posting processes.

On October 31, a company's Cash account had a normal balance of $7,000. During October, the account was debited for a total of $4,250 and credited for a total of $5,340. What was the balance in the Cash account at the beginning of October?

Accounts are normally decreased by debits.

Double-entry accounting is an accounting system:

Which of the following is the appropriate journal entry if a company hires a new employee?

Which of the following formulas can be used to calculate the debt ratio?

Explain debits and credits and their role in the accounting system.

An account used to record the owners' investments in the business is called:

Accountants at Amalgamated Corporation incorrectly journalized a $50,000 equipment purchase as a debit to Buildings. This error was not discovered before the journal entry was posted. What is the correcting entry?

Identify which of the following items would likely serve as a source document by marking an X in the appropriate column. The first one is done as an example.

Posting is the transfer of the information from each journal entry to the ledger.

An asset created by prepayment of an expense is:

Preparation of a trial balance is the first step in the analyzing and recording process.

The journal is known as a book of original entry.

If insurance coverage for the next three years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

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

According to IFRS, comparative information on financial statements is:

Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.

Explain the recording and posting processes.

On October 31, a company's Cash account had a normal balance of $7,000. During October, the account was debited for a total of $4,250 and credited for a total of $5,340. What was the balance in the Cash account at the beginning of October?

Accounts are normally decreased by debits.

Double-entry accounting is an accounting system:

Which of the following is the appropriate journal entry if a company hires a new employee?

Which of the following formulas can be used to calculate the debt ratio?

Explain debits and credits and their role in the accounting system.

An account used to record the owners' investments in the business is called:

Accountants at Amalgamated Corporation incorrectly journalized a $50,000 equipment purchase as a debit to Buildings. This error was not discovered before the journal entry was posted. What is the correcting entry?

Identify which of the following items would likely serve as a source document by marking an X in the appropriate column. The first one is done as an example.

Posting is the transfer of the information from each journal entry to the ledger.

An asset created by prepayment of an expense is:

Preparation of a trial balance is the first step in the analyzing and recording process.

The journal is known as a book of original entry.

If insurance coverage for the next three years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

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