Question 1

Liability accounts are increased by debits.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not a correct rule of debits and credits?

Accepted Answer

A)  Assets, expenses, and dividends are increased by debits. 
B)  Assets are decreased by credits and have a normal debit balance. 
C)  Liabilities, revenues, and stockholders' equity are increased by credits. 
D)  The normal balance for revenues and expenses is a credit. 
A)  Assets, expenses, and dividends are increased by debits. 
B)  Assets are decreased by credits and have a normal debit balance. 
C)  Liabilities, revenues, and stockholders' equity are increased by credits. 
D)  The normal balance for revenues and expenses is a credit.

Question 3

Several types of errors can be made during the journalizing and posting process. Match the following with their best description.
-Balance incorrectly computed.

Accepted Answer

A) Trial balance preparation errors 
B) Account balance errors 
C) Posting errors 
A) Trial balance preparation errors 
B) Account balance errors 
C) Posting errors

Question 4

Which of the following accounts is a stockholders' equity account?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Prepaid Insurance 
D)  Common Stock 
A)  Cash 
B)  Accounts Payable 
C)  Prepaid Insurance 
D)  Common Stock

Question 5

Journalize the following five transactions for Nexium & Associates, Inc. Omit explanations.
March 1 Bills are sent to clients for services provided in February in the amount of $800.
9 Corner Office, Inc. delivers office furniture $1,060) and office supplies $160) to Nexium, leaving an invoice for $1,220.
15 Payment is made to Corner Office, Inc. for the furniture and office supplies delivered on March 9.
23 A bill for $430 for electricity for the month of March is received and will be paid on its due date in April.
31 Salaries of $850 are paid to employees.

Accepted Answer

The answer of Journalize the following five transactions for Nexium...

Question 6

A chart of accounts is

Accepted Answer

A)  the same as a balance sheet 
B)  usually a listing of accounts in alphabetical order 
C)  usually a listing of accounts in financial statement order 
D)  used in place of a ledger 
A)  the same as a balance sheet 
B)  usually a listing of accounts in alphabetical order 
C)  usually a listing of accounts in financial statement order 
D)  used in place of a ledger

Question 7

Transactions are listed in the journal chronologically.

Accepted Answer

A) True 
 B)False

Question 8

When an account payable is paid with cash, the stockholders' equity in the business decreases.

Accepted Answer

A) True 
 B)False

Question 9

Revenues are equal to the difference between cash receipts and cash payments.

Accepted Answer

A) True 
 B)False

Question 10

Revenue accounts are increased by credits.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not true with a double-entry accounting system?

Accepted Answer

A)  The accounting equation remains in balance. 
B)  The sum of all debits is always equal to the sum of all credits in each journal entry. 
C)  Each business transaction will have two debits. 
D)  Every transaction affects at least two accounts. 
A)  The accounting equation remains in balance. 
B)  The sum of all debits is always equal to the sum of all credits in each journal entry. 
C)  Each business transaction will have two debits. 
D)  Every transaction affects at least two accounts.

Question 12

On August 30, JumpStart incurred the following expenses:
Payment to the landlord for August rent, $2,300
Payment to the Gas & Electric Company for August's bill, $525 Payment of employee wages for the last half of August, $1,750 Payment of shopping center's parking lot cleaning fee, $275
Journalize these payments as one compound journal entry.

Accepted Answer

The answer of On August 30, JumpStart incurred the following...

Question 13

The erroneous arrangement of digits, such as writing $45 as $54, is called a slide.

Accepted Answer

A) True 
 B)False

Question 14

The purchase of supplies on account was recorded and posted as a debit to Supplies for $500 and a credit to Accounts Receivable for $500. The correcting entry would include a:

Accepted Answer

A)  credit to Accounts Receivable for $500 
B)  credit to Accounts Receivable for $1,000 
C)  credit to Accounts Payable for $500 
D)  credit to Accounts Payable for $1,000 
A)  credit to Accounts Receivable for $500 
B)  credit to Accounts Receivable for $1,000 
C)  credit to Accounts Payable for $500 
D)  credit to Accounts Payable for $1,000

Question 15

The process of recording a transaction in the journal is called journalizing.

Accepted Answer

A) True 
 B)False

Question 16

The process of transferring the data from the journal to the ledger accounts is called posting.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following describes the classification and normal balance of the fees earned account?

Accepted Answer

A)  asset, credit 
B)  liability, credit 
C)  stockholders' equity, debit 
D)  revenue, credit 
A)  asset, credit 
B)  liability, credit 
C)  stockholders' equity, debit 
D)  revenue, credit

Question 18

The payment for the monthly rent will require which of the following entries?

Accepted Answer

A)  debit Cash and debit Rent Expense 
B)  credit Cash and credit Rent Expense 
C)  debit Rent Expense and credit Cash 
D)  credit Rent Expense and debit Cash 
A)  debit Cash and debit Rent Expense 
B)  credit Cash and credit Rent Expense 
C)  debit Rent Expense and credit Cash 
D)  credit Rent Expense and debit Cash

Question 19

On December 1, JumpStart Company provides $2,800 in services to clients.
a) Journalize this event as if the clients had paid cash at the time the services were rendered. b)1) Journalize this event as if the clients had placed this on account.
b)2) Assume that the clients paid $1,200 of the amount on account on December 30. Journalize this transaction.

Accepted Answer

a) Dec. 1 Cash 2,800
Fees Earn

Question 20

Match each of the following accounts with its proper account group from groups listed below.
-Prepaid Insurance

Accepted Answer

A) Assets 
B) Liabilities 
C) Stockholders' Equity 
D) Revenue 
E) Expenses 
A) Assets 
B) Liabilities 
C) Stockholders' Equity 
D) Revenue 
E) Expenses

Exam 2: Analyzing Transactions

Liability accounts are increased by debits.

Which of the following is not a correct rule of debits and credits?

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Balance incorrectly computed.

Which of the following accounts is a stockholders' equity account?

A chart of accounts is

Transactions are listed in the journal chronologically.

When an account payable is paid with cash, the stockholders' equity in the business decreases.

Revenues are equal to the difference between cash receipts and cash payments.

Revenue accounts are increased by credits.

Which of the following is not true with a double-entry accounting system?

The erroneous arrangement of digits, such as writing $45 as $54, is called a slide.

The purchase of supplies on account was recorded and posted as a debit to Supplies for $500 and a credit to Accounts Receivable for $500. The correcting entry would include a:

The process of recording a transaction in the journal is called journalizing.

The process of transferring the data from the journal to the ledger accounts is called posting.

Which of the following describes the classification and normal balance of the fees earned account?

The payment for the monthly rent will require which of the following entries?

Match each of the following accounts with its proper account group from groups listed below. -Prepaid Insurance

Introduction to Accounting and Business

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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