Question 1

Receiving cash from a customer on account would include a:

Accepted Answer

A)  debit to Cash and a credit to Accounts Payable 
B)  debit to Cash and a credit to Accounts Receivable 
C)  debit to Accounts Receivable and a credit to Cash 
D)  debit to Accounts Payable and a credit to Cash 
A)  debit to Cash and a credit to Accounts Payable 
B)  debit to Cash and a credit to Accounts Receivable 
C)  debit to Accounts Receivable and a credit to Cash 
D)  debit to Accounts Payable and a credit to Cash

Question 2

A balance sheet is a required financial statement that reports the financial position of the company as of a given day in time.

Accepted Answer

A) True 
 B)False

Question 3

The trial balance lists all the balance sheet accounts first, then all the accounts that affect shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 4

Which type of account is credited when a company pays its employees?

Accepted Answer

A)  an asset account 
B)  an expense account 
C)  a liability account 
D)  the owners' equity account 
A)  an asset account 
B)  an expense account 
C)  a liability account 
D)  the owners' equity account

Question 5

In the journal you will find the total balance for each account.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements regarding accounts is incorrect?

Accepted Answer

A)  Revenue is increased by a credit and an expense is increased by a debit. 
B)  A liability is decreased by a debit and increased by a credit. 
C)  Revenue is increased by a debit and an expense is increased by a credit. 
D)  An asset is increased by a debit and decreased by a credit. 
A)  Revenue is increased by a credit and an expense is increased by a debit. 
B)  A liability is decreased by a debit and increased by a credit. 
C)  Revenue is increased by a debit and an expense is increased by a credit. 
D)  An asset is increased by a debit and decreased by a credit.

Question 7

The normal balance of Accounts Receivable is a account.

Accepted Answer

A)  credit; shareholders' equity 
B)  credit; liability 
C)  debit; expense 
D)  debit; asset 
A)  credit; shareholders' equity 
B)  credit; liability 
C)  debit; expense 
D)  debit; asset

Question 8

A ledger is the first place where transactions are recorded in the accounting system.

Accepted Answer

A) True 
 B)False

Question 9

The left side of a T-account is always the side that increases the balance of the account.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements regarding accounts is correct?

Accepted Answer

A)  Revenues are increased by debits. 
B)  Expenses are decreased by debits. 
C)  Assets are decreased by debits. 
D)  Liabilities are decreased by debits. 
A)  Revenues are increased by debits. 
B)  Expenses are decreased by debits. 
C)  Assets are decreased by debits. 
D)  Liabilities are decreased by debits.

Question 11

The normal balance of an expense account is a because expenses decrease .

Accepted Answer

A)  credit; assets 
B)  debit; revenues 
C)  credit; liabilities 
D)  debit; shareholders' equity 
A)  credit; assets 
B)  debit; revenues 
C)  credit; liabilities 
D)  debit; shareholders' equity

Question 12

Which of the following business events may not be recorded in a company's general ledger?

Accepted Answer

A)  The company paid each of its employees a Christmas bonus. 
B)  A lawsuit has been filed by one of the company's customers (against the company). 
C)  The company issued 100 shares of common stock. 
D)  The company purchased two acres of land for future plant expansion. 
A)  The company paid each of its employees a Christmas bonus. 
B)  A lawsuit has been filed by one of the company's customers (against the company). 
C)  The company issued 100 shares of common stock. 
D)  The company purchased two acres of land for future plant expansion.

Question 13

When a company performs a service and immediately collects the cash from the customer, which of the following would occur?

Accepted Answer

A)  Net income would increase. 
B)  Assets would decrease. 
C)  Expenses would decrease. 
D)  Shareholders' equity would decrease. 
A)  Net income would increase. 
B)  Assets would decrease. 
C)  Expenses would decrease. 
D)  Shareholders' equity would decrease.

Question 14

The normal balance of the Supplies account is a account.

Accepted Answer

A)  debit; shareholders' equity 
B)  debit; asset 
C)  credit; liability 
D)  credit; expense 
A)  debit; shareholders' equity 
B)  debit; asset 
C)  credit; liability 
D)  credit; expense

Question 15

The normal balance for any account is always the side of the account (debit or credit) where increases are recorded.

Accepted Answer

A) True 
 B)False

Question 16

The trial balance is used to prepare the income statement.

Accepted Answer

A) True 
 B)False

Question 17

The normal balance of the Dividends account is a _ because it decreases _ .

Accepted Answer

A)  credit; revenues 
B)  debit; liabilities 
C)  debit; assets 
D)  debit; shareholders' equity 
A)  credit; revenues 
B)  debit; liabilities 
C)  debit; assets 
D)  debit; shareholders' equity

Question 18

Paying a dividend to the company's shareholders would include a:

Accepted Answer

A)  debit to Dividends and a credit to Cash 
B)  debit to Retained Earnings and a credit to Dividends 
C)  debit to Accounts Payable and a credit to Retained Earnings 
D)  debit to Cash and a credit to Dividends 
A)  debit to Dividends and a credit to Cash 
B)  debit to Retained Earnings and a credit to Dividends 
C)  debit to Accounts Payable and a credit to Retained Earnings 
D)  debit to Cash and a credit to Dividends

Question 19

On a trial balance the total of all debits must equal the total of all credits.

Accepted Answer

A) True 
 B)False

Question 20

Interest payable, income tax payable and salary payable are all examples of:

Accepted Answer

A)  expenses of future periods 
B)  retained earnings 
C)  accrued liabilities 
D)  prepaid expenses 
A)  expenses of future periods 
B)  retained earnings 
C)  accrued liabilities 
D)  prepaid expenses

Receiving cash from a customer on account would include a:

A balance sheet is a required financial statement that reports the financial position of the company as of a given day in time.

The trial balance lists all the balance sheet accounts first, then all the accounts that affect shareholders' equity.

Which type of account is credited when a company pays its employees?

In the journal you will find the total balance for each account.

Which of the following statements regarding accounts is incorrect?

The normal balance of Accounts Receivable is a account.

A ledger is the first place where transactions are recorded in the accounting system.

The left side of a T-account is always the side that increases the balance of the account.

Which of the following statements regarding accounts is correct?

The normal balance of an expense account is a because expenses decrease .

Which of the following business events may not be recorded in a company's general ledger?

When a company performs a service and immediately collects the cash from the customer, which of the following would occur?

The normal balance of the Supplies account is a account.

The normal balance for any account is always the side of the account (debit or credit) where increases are recorded.

The trial balance is used to prepare the income statement.

The normal balance of the Dividends account is a _ because it decreases _ .

Paying a dividend to the company's shareholders would include a:

On a trial balance the total of all debits must equal the total of all credits.

Interest payable, income tax payable and salary payable are all examples of:

The Financial Statements

Accrual Accounting and the Financial Statements

Cash and Receivables

Inventory and Cost of Goods Sold

Property, Plant, and Equipment, and Intangible Assets

Liabilities

Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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Exam 2: Recording Business Transactions

Receiving cash from a customer on account would include a:

A balance sheet is a required financial statement that reports the financial position of the company as of a given day in time.

The trial balance lists all the balance sheet accounts first, then all the accounts that affect shareholders' equity.

Which type of account is credited when a company pays its employees?

In the journal you will find the total balance for each account.

Which of the following statements regarding accounts is incorrect?

The normal balance of Accounts Receivable is a account.

A ledger is the first place where transactions are recorded in the accounting system.

The left side of a T-account is always the side that increases the balance of the account.

Which of the following statements regarding accounts is correct?

The normal balance of an expense account is a because expenses decrease .

Which of the following business events may not be recorded in a company's general ledger?

When a company performs a service and immediately collects the cash from the customer, which of the following would occur?

The normal balance of the Supplies account is a account.

The normal balance for any account is always the side of the account (debit or credit) where increases are recorded.

The trial balance is used to prepare the income statement.

The normal balance of the Dividends account is a _ because it decreases _ .

Paying a dividend to the company's shareholders would include a:

On a trial balance the total of all debits must equal the total of all credits.

Interest payable, income tax payable and salary payable are all examples of:

The Financial Statements

Accrual Accounting and the Financial Statements

Cash and Receivables

Inventory and Cost of Goods Sold

Property, Plant, and Equipment, and Intangible Assets

Liabilities

Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters