Question 1

Phast Mail Service purchased equipment for $2000. Phast paid $500 in cash and signed a note for the balance. Phast debited the Equipment account credited Cash and

Accepted Answer

A)  nothing further must be done. 
B)  debited the Capital account for $1500. 
C)  credited another asset account for $500. 
D)  credited a liability account for $1500. 
A)  nothing further must be done. 
B)  debited the Capital account for $1500. 
C)  credited another asset account for $500. 
D)  credited a liability account for $1500. D

Question 2

Prepare a corrected trial balance for Howard Company. All accounts should have a normal balance. $\begin{array}{c}
\text { HOWARD COMPANY}\
\text { Trial Balance}\
\text { For the Quarter Ended 3/31/16}\\
\begin{array}{lrr}
&\text { Debit}&\text { Credit}\
\text { Cash } & \$ 13,000 &  \
\text { Accounts Receivable } & &\$ 25,000 \
\text { Prepaid Insurance } & 2,500 & \
\text { Equipment } & 62,000 & \
\text { Accounts Payable } & &16,000  \
\text { Unearned Service Revenue } &12,000  & \
\text { Notes Payable } & &   25,000\
\text { Owner's Capital } & &40,000 \
\text { Owner's Drawings } &  &1,500  \
\text { Service Revenue } & &40,000\
\text { Salaries and Wages Expense } &14,000 & \
\text { Utilities Expense } & 5,000 & \
\text { Rent Expense } &\underline{10,000} \
 \underline{\underline{\$ 118,500}} & \underline{\underline{\$ 147,500}}
\end{array}\end{array}$

Accepted Answer

$\begin{array}{c}
\text { HOWARD COMPANY}\
\text { Trial Balance}\
\text { For the Quarter Ended 3 / 31 / 16}\\\begin{array}{lrr}
&\text { Debit}&\text { Credit}\
\text { Cash } &\$ 13,000 & \
\text { Accounts Receivable } & 25,000 & \
\text { Prepaid Insurance } & 2,500 & \
\text { Equipment } & 62,000 & \
\text { Accounts Payable } & & \$ 16,000 \
\text { Unearned Service Revenue } & & 12,000 \
\text { Notes Payable } & & 25,000 \
\text { Owner's Capital } &  & 40,000\
\text { Owner's Drawings } & 1,500& \
\text { Service Revenue } &&40,000 \
\text { Salaries and Wages Expense } & 14,000 & \
\text { Utilities Expense } &  5,000 & \
\text { Rent Expense } &10,000 &
\end{array}\end{array}$

Question 3

A debit to an asset account indicates

Accepted Answer

A)  an error. 
B)  a credit was made to a liability account. 
C)  a decrease in the asset. 
D)  an increase in the asset. 
A)  an error. 
B)  a credit was made to a liability account. 
C)  a decrease in the asset. 
D)  an increase in the asset. D

Question 4

The chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger.

Accepted Answer

A) True 
 B)False

Question 5

When two accounts are required in one journal entry the entry is referred to as a

Accepted Answer

A)  balanced entry. 
B)  simple entry. 
C)  posting. 
D)  nominal entry. 
A)  balanced entry. 
B)  simple entry. 
C)  posting. 
D)  nominal entry.

Question 6

A credit balance in a liability account indicates that an error in recording has occurred.

Accepted Answer

A) True 
 B)False

Question 7

If a revenue account is credited the revenue account is increased.

Accepted Answer

A) True 
 B)False

Question 8

If a company has overdrawn its bank balance then

Accepted Answer

A)  its cash account will show a debit balance. 
B)  its cash account will show a credit balance. 
C)  the cash account debits will exceed the cash account credits. 
D)  it cannot be detected by observing the balance of the cash account. 
A)  its cash account will show a debit balance. 
B)  its cash account will show a credit balance. 
C)  the cash account debits will exceed the cash account credits. 
D)  it cannot be detected by observing the balance of the cash account.

Question 9

Phair and Associates is a financial planning service. The account balances at December 31 2016 are shown by the following alphabetical list: $\begin{array}{lr}
\text { Accounts Payable } & 5,000 \
\text { Accounts Receivable } & 19,000 \
\text { Buildings } & 140,000 \
\text { Cash } & 11,700 \
\text { Equipment } & 31,300\
\text { Land } & 42,000 \
\text { Owner's Capital } & 152,900 \
\text { Notes Payable } & 95,000 \
\text { Notes Receivable } & 8,100 \
\text { Supplies } & 800
\end{array}$ Instructions
Prepare a trial balance with the accounts arranged in financial statement order.

Accepted Answer

The answer of Phair and Associates is a financial planning...

Question 10

The steps in preparing a trial balance include all of the following except

Accepted Answer

A)  listing the account titles and their balances. 
B)  totaling the debit and credit columns. 
C)  proving the equality of the two columns. 
D)  transferring journal amounts to ledger accounts. 
A)  listing the account titles and their balances. 
B)  totaling the debit and credit columns. 
C)  proving the equality of the two columns. 
D)  transferring journal amounts to ledger accounts.

Question 11

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 12

At June 1 2016 Cooper Company had an accounts receivable balance of $14000. During the month the company performed credit services of $35000 and collected accounts receivable of $23000. What is the balance in accounts receivable at June 30 2016?

Accepted Answer

The balance at the e

Question 13

Amy Pond a fellow employee wants to understand the basic steps in the recording process. Identify and briefly explain the steps in the order in which they occur.

Accepted Answer

The basic steps in the recording process

Question 14

The ledger should be arranged in

Accepted Answer

A)  alphabetical order. 
B)  chronological order. 
C)  dollar amount order. 
D)  None of these choices are correct. 
A)  alphabetical order. 
B)  chronological order. 
C)  dollar amount order. 
D)  None of these choices are correct.

Question 15

An accountant has debited an asset account for $1300 and credited a liability account for $600. Which of the following would be an incorrect way to complete the recording of the transaction?

Accepted Answer

A)  Credit an asset account for $700. 
B)  Credit another liability account for $700. 
C)  Credit an owner's equity account for $700. 
D)  Debit an owner's equity account for $700. 
A)  Credit an asset account for $700. 
B)  Credit another liability account for $700. 
C)  Credit an owner's equity account for $700. 
D)  Debit an owner's equity account for $700.

Question 16

Under a double-entry system show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected account. $\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Debit or Credit
1. An increase in Salaries and Wages Expense.$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
2. Adecrease in Accounts Payable.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
3. An increase in Prepaid Insurance.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
4. An increase in Owner's Capital.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
5. A decrease in Supplies.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
6. An increase in Owner's Drawings.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
7. An increase in Service Revenue.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
8. A decrease in Accounts Receivable.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
9. An increase in Rent Expense.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$
10. A decrease in Equipment.$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\quad\quad\quad}$

Accepted Answer

None

Question 17

On June 1 2016 Barcelona Inc. reported a cash balance of $11000. During June Barcelona made deposits of $3000 and made disbursements totalling $9000. What is the cash balance at the end of June?

Accepted Answer

A)  $5000 debit balance 
B)  $14000 debit balance 
C)  $5000 credit balance 
D)  $4000 credit balance 
A)  $5000 debit balance 
B)  $14000 debit balance 
C)  $5000 credit balance 
D)  $4000 credit balance

Question 18

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 19

All business transactions must be entered first in the general ledger.

Accepted Answer

A) True 
 B)False

Question 20

The standard format of a journal would not include

Accepted Answer

A)  a reference column. 
B)  an account title column. 
C)  a T-account. 
D)  a date column. 
A)  a reference column. 
B)  an account title column. 
C)  a T-account. 
D)  a date column.

Exam 2: The Recording Process

Phast Mail Service purchased equipment for $2000. Phast paid $500 in cash and signed a note for the balance. Phast debited the Equipment account credited Cash and

A debit to an asset account indicates

The chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger.

When two accounts are required in one journal entry the entry is referred to as a

A credit balance in a liability account indicates that an error in recording has occurred.

If a revenue account is credited the revenue account is increased.

If a company has overdrawn its bank balance then

The steps in preparing a trial balance include all of the following except

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

At June 1 2016 Cooper Company had an accounts receivable balance of $14000. During the month the company performed credit services of $35000 and collected accounts receivable of $23000. What is the balance in accounts receivable at June 30 2016?

Amy Pond a fellow employee wants to understand the basic steps in the recording process. Identify and briefly explain the steps in the order in which they occur.

The ledger should be arranged in

An accountant has debited an asset account for $1300 and credited a liability account for $600. Which of the following would be an incorrect way to complete the recording of the transaction?

On June 1 2016 Barcelona Inc. reported a cash balance of $11000. During June Barcelona made deposits of $3000 and made disbursements totalling $9000. What is the cash balance at the end of June?

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

All business transactions must be entered first in the general ledger.

The standard format of a journal would not include

Accounting in Action

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

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