Question 1

In a double-entry accounting system, the total dollar amount debited must always equal the total dollar amount credited.

Accepted Answer

A) True 
 B)False

Question 2

The balance column in a ledger account is:

Accepted Answer

A) An account entered on the balance sheet. 
B) A column for showing the balance of the account after each entry is posted. 
C) Another name for the dividends account. 
D) An account used to record the transfers of assets from a business to its stockholders. 
E) A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction. 
A) An account entered on the balance sheet. 
B) A column for showing the balance of the account after each entry is posted. 
C) Another name for the dividends account. 
D) An account used to record the transfers of assets from a business to its stockholders. 
E) A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.

Question 3

Explain the difference between a general ledger and a chart of accounts.

Accepted Answer

A ledger is a record containing all of t

Question 4

The financial statement that summarizes the changes in retained earnings is called the balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

The trial balance can serve as a replacement for the balance sheet, since total debits must equal total credits.

Accepted Answer

A) True 
 B)False

Question 6

On a trial balance, if the Debit and Credit column totals are equal, then:

Accepted Answer

A) All transactions have been recorded correctly. 
B) All entries from the journal have been posted to the ledger correctly. 
C) All ledger account balances are correct. 
D) Equal debits and credits have been recorded for transactions. 
E) The balance sheet would be correct. 
A) All transactions have been recorded correctly. 
B) All entries from the journal have been posted to the ledger correctly. 
C) All ledger account balances are correct. 
D) Equal debits and credits have been recorded for transactions. 
E) The balance sheet would be correct.

Question 7

The second step in the analyzing and recording process is to record the transactions and events in the book of original entry, called the ______________.

Accepted Answer

The answer of The second step in the analyzing and...

Question 8

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Accepted Answer

A) True 
 B)False

Question 9

Larry Bar opened a frame shop and completed these transactions: 1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000.
2) Purchased $70 of office supplies on credit.
3) Paid $1,200 cash for the receptionist's salary.
4) Sold a custom frame service and collected a $1,500 cash on the sale.
5) Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

Accepted Answer

A) $300. 
B) $41,500. 
C) $40,300. 
D) $38,500. 
E) $38,700. 
A) $300. 
B) $41,500. 
C) $40,300. 
D) $38,500. 
E) $38,700.

Question 10

A record containing all the separate accounts for a company as well as all of their balances is called the ___________________.

Accepted Answer

The answer of A record containing all the separate accounts...

Question 11

The right side of an account is called the debit side.

Accepted Answer

A) True 
 B)False

Question 12

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

Accepted Answer

A) Dividends account. 
B) Equity account. 
C) Drawing account. 
D) T-account. 
E) Balance column sheet. 
A) Dividends account. 
B) Equity account. 
C) Drawing account. 
D) T-account. 
E) Balance column sheet.

Question 13

The journal is known as a book of original entry.

Accepted Answer

A) True 
 B)False

Question 14

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting, Inc. Which of the following general journal entries will RR Consulting, Inc. make to record this transaction?

Accepted Answer

A) Debit Assets $200,000; credit Common Stock, $200,000. 
B) Debit Cash and Land, $200,000; credit Common Stock, $200,000. 
C) Debit Cash $70,000; debit Land $130,000; credit Common Stock, $200,000. 
D) Debit Common Stock, $200,000; credit Cash $70,000; credit Land, $130,000. 
E) Debit Common Stock, $200,000; credit Assets, $200,000. 
A) Debit Assets $200,000; credit Common Stock, $200,000. 
B) Debit Cash and Land, $200,000; credit Common Stock, $200,000. 
C) Debit Cash $70,000; debit Land $130,000; credit Common Stock, $200,000. 
D) Debit Common Stock, $200,000; credit Cash $70,000; credit Land, $130,000. 
E) Debit Common Stock, $200,000; credit Assets, $200,000.

Question 15

While in the process of posting from the journal to the ledger, a company failed to post a $500 debit to the Equipment account. The effect of this error will be that:

Accepted Answer

A) The Equipment account balance will be overstated. 
B) The trial balance will not balance. 
C) The error will overstate the debits listed in the journal. 
D) The total debits in the trial balance will be larger than the total credits. 
E) The error will overstate the credits listed in the journal. 
A) The Equipment account balance will be overstated. 
B) The trial balance will not balance. 
C) The error will overstate the debits listed in the journal. 
D) The total debits in the trial balance will be larger than the total credits. 
E) The error will overstate the credits listed in the journal.

Question 16

Debits increase asset and expense accounts.

Accepted Answer

A) True 
 B)False

Question 17

The higher a company's debt ratio, the lower the risk of a company not being able to meet its obligations.

Accepted Answer

A) True 
 B)False

Question 18

ABC Catering received $800 cash from a customer for catering services to be provided next month. Given the choices below, determine the general journal entry that ABC Catering will make to record this transaction.

Accepted Answer

A) $$\begin{array} { | l | r | r | } 
\hline \text { Unearned Catering Revenue } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}$$ 
B) $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Accounts Receivable } & & 800 \
\hline
\end{array}$$ 
C) $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Unearned Catering Revenue } & & 800 \
\hline
\end{array}$$ 
D) $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}$$ 
E) $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}$$ 
A) $$\begin{array} { | l | r | r | } 
\hline \text { Unearned Catering Revenue } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}$$ 
B) $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Accounts Receivable } & & 800 \
\hline
\end{array}$$ 
C) $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Unearned Catering Revenue } & & 800 \
\hline
\end{array}$$ 
D) $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}$$ 
E) $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}$$

Question 19

The third step in the analyzing and recording process is to post the information to the ___________________.

Accepted Answer

The answer of The third step in the analyzing and...

Question 20

Which of the following is not a step in the accounting process?

Accepted Answer

A) Record relevant transactions and events in a journal. 
B) Post journal information to the ledger accounts. 
C) Prepare and analyze the trial balance. 
D) Analyzing each transaction. 
E) Verify that revenues and expenses are equal. 
A) Record relevant transactions and events in a journal. 
B) Post journal information to the ledger accounts. 
C) Prepare and analyze the trial balance. 
D) Analyzing each transaction. 
E) Verify that revenues and expenses are equal.

In a double-entry accounting system, the total dollar amount debited must always equal the total dollar amount credited.

The balance column in a ledger account is:

Explain the difference between a general ledger and a chart of accounts.

The financial statement that summarizes the changes in retained earnings is called the balance sheet.

The trial balance can serve as a replacement for the balance sheet, since total debits must equal total credits.

On a trial balance, if the Debit and Credit column totals are equal, then:

The second step in the analyzing and recording process is to record the transactions and events in the book of original entry, called the ______________.

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

A record containing all the separate accounts for a company as well as all of their balances is called the ___________________.

The right side of an account is called the debit side.

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

The journal is known as a book of original entry.

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting, Inc. Which of the following general journal entries will RR Consulting, Inc. make to record this transaction?

While in the process of posting from the journal to the ledger, a company failed to post a $500 debit to the Equipment account. The effect of this error will be that:

Debits increase asset and expense accounts.

The higher a company's debt ratio, the lower the risk of a company not being able to meet its obligations.

ABC Catering received $800 cash from a customer for catering services to be provided next month. Given the choices below, determine the general journal entry that ABC Catering will make to record this transaction.

The third step in the analyzing and recording process is to post the information to the ___________________.

Which of the following is not a step in the accounting process?

Accounting in Business

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Filters

Exam 2: Accounting for Business Transactions

In a double-entry accounting system, the total dollar amount debited must always equal the total dollar amount credited.

The balance column in a ledger account is:

Explain the difference between a general ledger and a chart of accounts.

The financial statement that summarizes the changes in retained earnings is called the balance sheet.

The trial balance can serve as a replacement for the balance sheet, since total debits must equal total credits.

On a trial balance, if the Debit and Credit column totals are equal, then:

The second step in the analyzing and recording process is to record the transactions and events in the book of original entry, called the ______________.

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

A record containing all the separate accounts for a company as well as all of their balances is called the ___________________.

The right side of an account is called the debit side.

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

The journal is known as a book of original entry.

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting, Inc. Which of the following general journal entries will RR Consulting, Inc. make to record this transaction?

While in the process of posting from the journal to the ledger, a company failed to post a $500 debit to the Equipment account. The effect of this error will be that:

Debits increase asset and expense accounts.

The higher a company's debt ratio, the lower the risk of a company not being able to meet its obligations.

ABC Catering received $800 cash from a customer for catering services to be provided next month. Given the choices below, determine the general journal entry that ABC Catering will make to record this transaction.

The third step in the analyzing and recording process is to post the information to the ___________________.

Which of the following is not a step in the accounting process?

Accounting in Business

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Filters