Question 1

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

Accepted Answer

A) A debit balance in the dividends account 
B) A credit balance in an expense account 
C) A credit balance in a liabilities account 
D) A credit balance in a revenue account 
A) A debit balance in the dividends account 
B) A credit balance in an expense account 
C) A credit balance in a liabilities account 
D) A credit balance in a revenue account

Question 2

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 3

A debit is not the normal balance for which of the following?

Accepted Answer

A) Asset account 
B) Dividends account 
C) Expense account 
D) Common stock account 
A) Asset account 
B) Dividends account 
C) Expense account 
D) Common stock account

Question 4

Credits

Accepted Answer

A) decrease both assets and liabilities. 
B) decrease assets and increase liabilities. 
C) increase both assets and liabilities. 
D) increase assets and decrease liabilities. 
A) decrease both assets and liabilities. 
B) decrease assets and increase liabilities. 
C) increase both assets and liabilities. 
D) increase assets and decrease liabilities.

Question 5

Radio Moscow Industries purchased supplies for $1,000. They paid $400 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $600. Which of the following would be the correct way to complete the recording of the transaction?

Accepted Answer

A) Credit an asset account for $400. 
B) Credit another liability account for $400. 
C) Credit the retained earnings account for $400. 
D) Debit the retained earnings account for $400. 
A) Credit an asset account for $400. 
B) Credit another liability account for $400. 
C) Credit the retained earnings account for $400. 
D) Debit the retained earnings account for $400.

Question 6

Electrelane Company showed the following balances at the end of its first year:   What did Electrelene Company show as total credits on its trial balance?

Accepted Answer

A) $9,000 
B) $44,000 
C) $45,000 
D) $49,000 
A) $9,000 
B) $44,000 
C) $45,000 
D) $49,000

Question 7

When a company pays dividends

Accepted Answer

A) it doesn't have to be cash, it could be another asset. 
B) the dividends account will be increased with a credit. 
C) the retained earnings account will be directly increased with a debit. 
D) the dividends account will be decreased with a debit. 
A) it doesn't have to be cash, it could be another asset. 
B) the dividends account will be increased with a credit. 
C) the retained earnings account will be directly increased with a debit. 
D) the dividends account will be decreased with a debit.

Question 8

The recording process occurs

Accepted Answer

A) once a year. 
B) once a month. 
C) repeatedly during the accounting period. 
D) infrequently in a manual accounting system. 
A) once a year. 
B) once a month. 
C) repeatedly during the accounting period. 
D) infrequently in a manual accounting system.

Question 9

Which of the following rules is incorrect?

Accepted Answer

A) Credits decrease the dividends account. 
B) Debits increase the common stock account. 
C) Credits increase revenue accounts. 
D) Debits decrease liability accounts. 
A) Credits decrease the dividends account. 
B) Debits increase the common stock account. 
C) Credits increase revenue accounts. 
D) Debits decrease liability accounts.

Question 10

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 11

The ledger accounts should be arranged in

Accepted Answer

A) chronological order. 
B) alphabetical order. 
C) financial statement order. 
D) order of appearance in the journal. 
A) chronological order. 
B) alphabetical order. 
C) financial statement order. 
D) order of appearance in the journal.

Question 12

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 13

The first step in posting involves

Accepted Answer

A) entering in the appropriate ledger account the date, journal page, and debit amount shown in the journal. 
B) writing in the journal the account number to which the debit amount was posted. 
C) writing in the journal the account number to which the credit amount was posted. 
D) entering in the appropriate ledger account the date, journal page, and credit amount shown in the journal. 
A) entering in the appropriate ledger account the date, journal page, and debit amount shown in the journal. 
B) writing in the journal the account number to which the debit amount was posted. 
C) writing in the journal the account number to which the credit amount was posted. 
D) entering in the appropriate ledger account the date, journal page, and credit amount shown in the journal.

Question 14

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

Accepted Answer

A) cash register sales tape. 
B) bill. 
C) advertising brochure. 
D) check. 
A) cash register sales tape. 
B) bill. 
C) advertising brochure. 
D) check.

Question 15

Customarily, a trial balance is prepared

Accepted Answer

A) at the end of each day. 
B) after each journal entry is posted. 
C) at the end of an accounting period. 
D) only at the inception of the business. 
A) at the end of each day. 
B) after each journal entry is posted. 
C) at the end of an accounting period. 
D) only at the inception of the business.

Question 16

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 17

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 18

After journal entries are posted, the reference column

Accepted Answer

A) of the general journal will be blank. 
B) of the general ledger will show journal page numbers. 
C) of the general journal will show "Dr" or "Cr". 
D) of the general ledger will show account numbers. 
A) of the general journal will be blank. 
B) of the general ledger will show journal page numbers. 
C) of the general journal will show "Dr" or "Cr". 
D) of the general ledger will show account numbers.

Question 19

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

Accepted Answer

A) no errors have been made. 
B) no errors can be discovered. 
C) that all accounts reflect correct balances. 
D) the mathematical equality of the accounting equation. 
A) no errors have been made. 
B) no errors can be discovered. 
C) that all accounts reflect correct balances. 
D) the mathematical equality of the accounting equation.

Question 20

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

Accepted Answer

A) True 
 B)False

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

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?

A debit is not the normal balance for which of the following?

Credits

Electrelane Company showed the following balances at the end of its first year: What did Electrelene Company show as total credits on its trial balance?

When a company pays dividends

The recording process occurs

Which of the following rules is incorrect?

Assets normally show

The ledger accounts should be arranged in

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

The first step in posting involves

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

Customarily, a trial balance is prepared

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

After journal entries are posted, the reference column

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

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

Filters

Exam 2: The Recording Process

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

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?

A debit is not the normal balance for which of the following?

Credits

Electrelane Company showed the following balances at the end of its first year: What did Electrelene Company show as total credits on its trial balance?

When a company pays dividends

The recording process occurs

Which of the following rules is incorrect?

Assets normally show

The ledger accounts should be arranged in

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

The first step in posting involves

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

Customarily, a trial balance is prepared

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

After journal entries are posted, the reference column

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

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

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