Question 1

Which of the following transactions affects the liabilities for Gravette, Inc.?

Accepted Answer

A) Supplies are purchased for cash by Gravette. 
B) Gravette places an order for merchandise with a supplier; the merchandise will be shipped to Ernest White in 60 days. 
C) The owners of Gravette invest $100,000 in the company. 
D) Payment is made on a bank loan which Gravette had obtained 6 months ago. 
A) Supplies are purchased for cash by Gravette. 
B) Gravette places an order for merchandise with a supplier; the merchandise will be shipped to Ernest White in 60 days. 
C) The owners of Gravette invest $100,000 in the company. 
D) Payment is made on a bank loan which Gravette had obtained 6 months ago.

Question 2

Owners of Tri-States Industries, Ralph and Maureen, are sent a dividend check from the company.For this transaction, what is the effect on the accounting equation for Tri-States Industries?

Accepted Answer

A) Assets decrease and stockholders' equity decreases. 
B) Assets increase and stockholders' equity increases. 
C) Liabilities increase and stockholders' equity decreases. 
A) Assets decrease and stockholders' equity decreases. 
B) Assets increase and stockholders' equity increases. 
C) Liabilities increase and stockholders' equity decreases.

Question 3

The initial step in the recording process is posting.

Accepted Answer

A) True 
 B)False

Question 4

A company's chart of accounts will reflect the nature of its business.

Accepted Answer

A) True 
 B)False

Question 5

If the business has an from a customer, then the customer has an to the business.

Accepted Answer

A) account receivable; account receivable 
B) account payable; account payable 
C) account receivable; account payable 
D) account payable; account receivable 
A) account receivable; account receivable 
B) account payable; account payable 
C) account receivable; account payable 
D) account payable; account receivable

Question 6

The normal balance of the Dividends account is a credit.

Accepted Answer

A) True 
 B)False

Question 7

Payment of a dividend increases both cash and stockholders' equity of the distributing business.

Accepted Answer

A) True 
 B)False

Question 8

Use the following five transactions for Morton & Associates, Inc.to answer the questions).  
-See the transactions for Morton & Associates.
Based only on these transactions, what is the total amount of expenses that should appear on the income statement for the month of May?

Accepted Answer

A) $ 430 
B) $ 850 
C) $ 1,280 
D) $ 1,440 
A) $ 430 
B) $ 850 
C) $ 1,280 
D) $ 1,440

Question 9

Under the double-entry system of accounting, every transaction is entered in at least two accounts on opposite sides of T accounts.

Accepted Answer

A) True 
 B)False

Question 10

The left or debit side of a liability account is used to record .

Accepted Answer

The answer of The left or debit side of a...

Question 11

Payment is made for an electric bill which was received and recorded earlier.For this transaction, identify the effect on the accounting equation.

Accepted Answer

A) Assets increase and liabilities increase. 
B) Assets increase and stockholders' equity increases. 
C) Liabilities increase and stockholders' equity decreases. 
D) Liabilities decrease and assets decrease. 
A) Assets increase and liabilities increase. 
B) Assets increase and stockholders' equity increases. 
C) Liabilities increase and stockholders' equity decreases. 
D) Liabilities decrease and assets decrease.

Question 12

A debit is a negative entry.

Accepted Answer

A) True 
 B)False

Question 13

One effect on the accounting equation when a firm lends money is

Accepted Answer

A) stockholders' equity decreases. 
B) liabilities decrease. 
C) liabilities increase. 
D) total assets remain the same. 
A) stockholders' equity decreases. 
B) liabilities decrease. 
C) liabilities increase. 
D) total assets remain the same.

Question 14

Transactions are recorded in the general journal in:

Accepted Answer

A) Alphabetical order. 
B) Account number order. 
C) Chronological order. 
D) Financial statement order. 
A) Alphabetical order. 
B) Account number order. 
C) Chronological order. 
D) Financial statement order.

Question 15

Which of the following events transactions) is an internal event for a business entity?

Accepted Answer

A) An accountant provides services for clients. 
B) An accountant purchases computer equipment to maintain business records and prepare legal documents. 
C) Periodically, part of the cost of the computer equipment used by an accountant is assigned to depreciation expenses. 
D) An accountant receives cash payments from clients who were billed for services. 
A) An accountant provides services for clients. 
B) An accountant purchases computer equipment to maintain business records and prepare legal documents. 
C) Periodically, part of the cost of the computer equipment used by an accountant is assigned to depreciation expenses. 
D) An accountant receives cash payments from clients who were billed for services.

Question 16

Every accounting transaction affects both the balance sheet and the income statement.

Accepted Answer

A) True 
 B)False

Question 17

The Holmes Company purchased a building for $75,000 in cash.What is the effect on current assets?

Accepted Answer

A) Increase in current assets 
B) Decrease in current assets 
C) No effect on current assets 
D) Unable to determine 
A) Increase in current assets 
B) Decrease in current assets 
C) No effect on current assets 
D) Unable to determine

Question 18

The totaling of each side of a T account is known as .

Accepted Answer

The answer of The totaling of each side of a...

Question 19

Parachute Country Club
Use the selected accounts for Parachute Country Club presented below to answer the following questions).      
-Read the information about Parachute Country Club.
Which of the following describes the transaction which occurred on August 7?

Accepted Answer

A) Sold club memberships on credit. 
B) Cash sales of daily fees. 
C) Collected an advance deposit in cash. 
D) Received cash payments of accounts receivable. 
A) Sold club memberships on credit. 
B) Cash sales of daily fees. 
C) Collected an advance deposit in cash. 
D) Received cash payments of accounts receivable.

Question 20

A debit entry increases assets, decreases liabilities, or decreases stockholders' equity.

Accepted Answer

A) True 
 B)False

Which of the following transactions affects the liabilities for Gravette, Inc.?

Owners of Tri-States Industries, Ralph and Maureen, are sent a dividend check from the company.For this transaction, what is the effect on the accounting equation for Tri-States Industries?

The initial step in the recording process is posting.

A company's chart of accounts will reflect the nature of its business.

If the business has an from a customer, then the customer has an to the business.

The normal balance of the Dividends account is a credit.

Payment of a dividend increases both cash and stockholders' equity of the distributing business.

Use the following five transactions for Morton & Associates, Inc.to answer the questions). -See the transactions for Morton & Associates. Based only on these transactions, what is the total amount of expenses that should appear on the income statement for the month of May?

Under the double-entry system of accounting, every transaction is entered in at least two accounts on opposite sides of T accounts.

The left or debit side of a liability account is used to record .

Payment is made for an electric bill which was received and recorded earlier.For this transaction, identify the effect on the accounting equation.

A debit is a negative entry.

One effect on the accounting equation when a firm lends money is

Transactions are recorded in the general journal in:

Which of the following events transactions) is an internal event for a business entity?

Every accounting transaction affects both the balance sheet and the income statement.

The Holmes Company purchased a building for $75,000 in cash.What is the effect on current assets?

The totaling of each side of a T account is known as .

Parachute Country Club Use the selected accounts for Parachute Country Club presented below to answer the following questions). -Read the information about Parachute Country Club. Which of the following describes the transaction which occurred on August 7?

A debit entry increases assets, decreases liabilities, or decreases stockholders' equity.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 3: Processing Accounting Information

Which of the following transactions affects the liabilities for Gravette, Inc.?

Owners of Tri-States Industries, Ralph and Maureen, are sent a dividend check from the company.For this transaction, what is the effect on the accounting equation for Tri-States Industries?

The initial step in the recording process is posting.

A company's chart of accounts will reflect the nature of its business.

If the business has an from a customer, then the customer has an to the business.

The normal balance of the Dividends account is a credit.

Payment of a dividend increases both cash and stockholders' equity of the distributing business.

Use the following five transactions for Morton & Associates, Inc.to answer the questions). -See the transactions for Morton & Associates. Based only on these transactions, what is the total amount of expenses that should appear on the income statement for the month of May?

Under the double-entry system of accounting, every transaction is entered in at least two accounts on opposite sides of T accounts.

The left or debit side of a liability account is used to record .

Payment is made for an electric bill which was received and recorded earlier.For this transaction, identify the effect on the accounting equation.

A debit is a negative entry.

One effect on the accounting equation when a firm lends money is

Transactions are recorded in the general journal in:

Which of the following events transactions) is an internal event for a business entity?

Every accounting transaction affects both the balance sheet and the income statement.

The Holmes Company purchased a building for $75,000 in cash.What is the effect on current assets?

The totaling of each side of a T account is known as .

Parachute Country Club Use the selected accounts for Parachute Country Club presented below to answer the following questions). -Read the information about Parachute Country Club. Which of the following describes the transaction which occurred on August 7?

A debit entry increases assets, decreases liabilities, or decreases stockholders' equity.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters