Question 1

Which of the following correctly identifies normal balances of accounts?

Accepted Answer

A) $$\begin{array} { l l } 
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Stockholders' Equity } & \text { Credit } \
\text { Revenues } & \text { Debit } \
\text { Expenses } & \text { Credit }
\end{array}$$ 
B) $$\begin{array} { l l } 
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Stockholders' Equity } & \text { Credit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Credit }
\end{array}$$ 
C) $$\begin{array} { l l } 
\text { Assets } & \text { Credit } \
\text { Liabilities } & \text { Debit } \
\text { Stockholders' Equity } & \text { Debit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Debit }
\end{array}$$ 
D) $$\begin{array} { l l } 
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Stockholders' Equity } & \text { Credit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Debit }
\end{array}$$ 
A) $$\begin{array} { l l } 
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Stockholders' Equity } & \text { Credit } \
\text { Revenues } & \text { Debit } \
\text { Expenses } & \text { Credit }
\end{array}$$ 
B) $$\begin{array} { l l } 
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Stockholders' Equity } & \text { Credit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Credit }
\end{array}$$ 
C) $$\begin{array} { l l } 
\text { Assets } & \text { Credit } \
\text { Liabilities } & \text { Debit } \
\text { Stockholders' Equity } & \text { Debit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Debit }
\end{array}$$ 
D) $$\begin{array} { l l } 
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Stockholders' Equity } & \text { Credit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Debit }
\end{array}$$

Question 2

Which of the following statements is true?

Accepted Answer

A)  Debits increase assets and increase liabilities. 
B)  Credits decrease assets and decrease liabilities. 
C)  Credits decrease assets and increase liabilities. 
D)  Debits decrease liabilities and decrease assets. 
A)  Debits increase assets and increase liabilities. 
B)  Credits decrease assets and decrease liabilities. 
C)  Credits decrease assets and increase liabilities. 
D)  Debits decrease liabilities and decrease assets.

Question 3

Posting is the process of proving the equality of debits and credits in the trial balance.

Accepted Answer

A) True 
 B)False

Question 4

Transactions are entered in the ledger accounts and then transferred to journals.

Accepted Answer

A) True 
 B)False

Question 5

The explanation column of the general ledger

Accepted Answer

A)  is completed without exception. 
B)  is nonexistent. 
C)  is used infrequently. 
D)  shows account titles. 
A)  is completed without exception. 
B)  is nonexistent. 
C)  is used infrequently. 
D)  shows account titles.

Question 6

A chart of accounts for a business firm

Accepted Answer

A)  is a graph. 
B)  indicates the amount of profit or loss for the period. 
C)  lists the accounts and account numbers that identify their location in the ledger. 
D)  shows the balance of each account in the general ledger. 
A)  is a graph. 
B)  indicates the amount of profit or loss for the period. 
C)  lists the accounts and account numbers that identify their location in the ledger. 
D)  shows the balance of each account in the general ledger.

Question 7

At September 1, 2015, Promise Ring Co. reported stockholders' equity of $156,000. During the month, Promise Ring generated revenues of $38,000, incurred expenses of $21,000, purchased equipment for $5,000 and paid dividends of $2,000. What is the amount of stockholders' equity at September 30, 2015?

Accepted Answer

A)  $166,000 
B)  $171,000 
C)  $173,000 
D)  $176,000 
A)  $166,000 
B)  $171,000 
C)  $173,000 
D)  $176,000

Question 8

A chart of accounts usually starts with

Accepted Answer

A)  asset accounts. 
B)  expense accounts. 
C)  liability accounts. 
D)  revenue accounts. 
A)  asset accounts. 
B)  expense accounts. 
C)  liability accounts. 
D)  revenue accounts.

Question 9

Which one of the following is not a part of an account?

Accepted Answer

A)  Credit side 
B)  Trial balance 
C)  Debit side 
D)  Title 
A)  Credit side 
B)  Trial balance 
C)  Debit side 
D)  Title

Question 10

After transaction information has been recorded in the journal, it is transferred to the

Accepted Answer

A)  trial balance. 
B)  income statement. 
C)  book of original entry. 
D)  ledger. 
A)  trial balance. 
B)  income statement. 
C)  book of original entry. 
D)  ledger.

Question 11

Which of the following is not true of the terms debit and credit?

Accepted Answer

A)  They can be abbreviated as Dr. and Cr. 
B)  They can be interpreted to mean increase and decrease. 
C)  They can be used to describe the balance of an account. 
D)  They can be interpreted to mean left and right. 
A)  They can be abbreviated as Dr. and Cr. 
B)  They can be interpreted to mean increase and decrease. 
C)  They can be used to describe the balance of an account. 
D)  They can be interpreted to mean left and right.

Question 12

A credit is not the normal balance for which account listed below?

Accepted Answer

A)  Common stock account 
B)  Revenue account 
C)  Liability account 
D)  Dividends account 
A)  Common stock account 
B)  Revenue account 
C)  Liability account 
D)  Dividends account

Question 13

An account is an individual accounting record of increases and decreases in specific

Accepted Answer

A)  liabilities. 
B)  assets. 
C)  expenses. 
D)  assets, liabilities, and stockholders' equity items. 
A)  liabilities. 
B)  assets. 
C)  expenses. 
D)  assets, liabilities, and stockholders' equity items.

Question 14

The normal balance of all accounts is a debit.

Accepted Answer

A) True 
 B)False

Question 15

Under IFRS, the trial balance

Accepted Answer

A)  follows the same format as under GAAP. 
B)  shows credits on the left and debits on the right. 
C)  includes less accounts than under GAAP. 
D)  includes more accounts than under GAAP. 
A)  follows the same format as under GAAP. 
B)  shows credits on the left and debits on the right. 
C)  includes less accounts than under GAAP. 
D)  includes more accounts than under GAAP.

Question 16

Mt. Zion Inc. pays its employees twice a month, on the 7th and the 21st. On June 21, Mt. Zion Inc. paid employee salaries of $5,000. This transaction would

Accepted Answer

A)  increase stockholders' equity by $5,000. 
B)  decrease the balance in Salaries and Wages Expense by $5,000. 
C)  decrease net income for the month by $5,000. 
D)  be recorded by a $5,000 debit to Salaries and Wages Payable and a $4,000 credit to Salaries and Wages Expense. 
A)  increase stockholders' equity by $5,000. 
B)  decrease the balance in Salaries and Wages Expense by $5,000. 
C)  decrease net income for the month by $5,000. 
D)  be recorded by a $5,000 debit to Salaries and Wages Payable and a $4,000 credit to Salaries and Wages Expense.

Question 17

Assets normally show

Accepted Answer

A)  credit balances. 
B)  debit balances. 
C)  debit and credit balances. 
D)  debit or credit balances. 
A)  credit balances. 
B)  debit balances. 
C)  debit and credit balances. 
D)  debit or credit balances.

Question 18

Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co. for $3,100 cash. The entry for this transaction will include a

Accepted Answer

A)  debit to Equipment $2,700 and a debit to Supplies Expense $400 for Milkman. 
B)  credit to Cash for Milkman. 
C)  credit to Accounts Payable for Deerhoof. 
D)  debit to Equipment $2,700 and a debit to Supplies $400 for Deerhoof. 
A)  debit to Equipment $2,700 and a debit to Supplies Expense $400 for Milkman. 
B)  credit to Cash for Milkman. 
C)  credit to Accounts Payable for Deerhoof. 
D)  debit to Equipment $2,700 and a debit to Supplies $400 for Deerhoof.

Question 19

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

Accepted Answer

A)  Credit an asset account for $800. 
B)  Credit another liability account for $800. 
C)  Credit a Stockholders' account for $800. 
D)  Debit a Stockholders' account for $800. 
A)  Credit an asset account for $800. 
B)  Credit another liability account for $800. 
C)  Credit a Stockholders' account for $800. 
D)  Debit a Stockholders' account for $800.

Question 20

Under the double-entry system, revenues must always equal expenses.

Accepted Answer

A) True 
 B)False

Which of the following correctly identifies normal balances of accounts?

Which of the following statements is true?

Posting is the process of proving the equality of debits and credits in the trial balance.

Transactions are entered in the ledger accounts and then transferred to journals.

The explanation column of the general ledger

A chart of accounts for a business firm

At September 1, 2015, Promise Ring Co. reported stockholders' equity of $156,000. During the month, Promise Ring generated revenues of $38,000, incurred expenses of $21,000, purchased equipment for $5,000 and paid dividends of $2,000. What is the amount of stockholders' equity at September 30, 2015?

A chart of accounts usually starts with

Which one of the following is not a part of an account?

After transaction information has been recorded in the journal, it is transferred to the

Which of the following is not true of the terms debit and credit?

A credit is not the normal balance for which account listed below?

An account is an individual accounting record of increases and decreases in specific

The normal balance of all accounts is a debit.

Under IFRS, the trial balance

Mt. Zion Inc. pays its employees twice a month, on the 7^th and the 21^st. On June 21, Mt. Zion Inc. paid employee salaries of $5,000. This transaction would

Assets normally show

Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co. for $3,100 cash. The entry for this transaction will include a

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

Under the double-entry system, revenues must always equal expenses.

Accounting in Action

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Filters

Exam 2: The Recording Process

Which of the following correctly identifies normal balances of accounts?

Which of the following statements is true?

Posting is the process of proving the equality of debits and credits in the trial balance.

Transactions are entered in the ledger accounts and then transferred to journals.

The explanation column of the general ledger

A chart of accounts for a business firm

A chart of accounts usually starts with

Which one of the following is not a part of an account?

After transaction information has been recorded in the journal, it is transferred to the

Which of the following is not true of the terms debit and credit?

A credit is not the normal balance for which account listed below?

An account is an individual accounting record of increases and decreases in specific

The normal balance of all accounts is a debit.

Under IFRS, the trial balance

Mt. Zion Inc. pays its employees twice a month, on the 7th and the 21st. On June 21, Mt. Zion Inc. paid employee salaries of $5,000. This transaction would

Assets normally show

Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co. for $3,100 cash. The entry for this transaction will include a

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

Under the double-entry system, revenues must always equal expenses.

Accounting in Action

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Filters

Mt. Zion Inc. pays its employees twice a month, on the 7^th and the 21^st. On June 21, Mt. Zion Inc. paid employee salaries of $5,000. This transaction would