Question 1

Which of the following statements is not true?

Accepted Answer

A)  Expenses increase owner's equity. 
B)  Expenses have normal debit balances. 
C)  Expenses decrease owner's equity. 
D)  Expenses are a negative factor in the computation of net income. 
A)  Expenses increase owner's equity. 
B)  Expenses have normal debit balances. 
C)  Expenses decrease owner's equity. 
D)  Expenses are a negative factor in the computation of net income.

Question 2

During February 2010, its first month of operations, the owner of Alona Enterprises invested cash of $25,000. Alona had cash revenues of $4,000 and paid expenses of $7,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

Accepted Answer

A)  $3,000 credit 
B)  $22,000 debit 
C)  $29,000 debit 
D)  $18,000 credit 
A)  $3,000 credit 
B)  $22,000 debit 
C)  $29,000 debit 
D)  $18,000 credit

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The best interpretation of the word credit is the

Accepted Answer

A)  offset side of an account. 
B)  increase side of an account. 
C)  right side of an account. 
D)  decrease side of an account. 
A)  offset side of an account. 
B)  increase side of an account. 
C)  right side of an account. 
D)  decrease side of an account.

Question 5

Pastorek Company purchased equipment for $1,800 cash. As a result of this event,

Accepted Answer

A)  owner's equity decreased by $1,800. 
B)  total assets increased by $1,800. 
C)  total assets remained unchanged. 
D)  Both a and B 
A)  owner's equity decreased by $1,800. 
B)  total assets increased by $1,800. 
C)  total assets remained unchanged. 
D)  Both a and B

Question 6

On August 13, 2010, Merrill Enterprises purchased office equipment for $1,000 and office supplies of $200 on account. Which of the following journal entries is recorded correctly and in the standard format?

Accepted Answer

The answer of On August 13, 2010, Merrill Enterprises purchased...

Question 7

Which of the following correctly identifies normal balances of accounts?

Accepted Answer

The answer of Which of the following correctly identifies normal...

Question 8

The name given to entering transaction data in the journal is

Accepted Answer

A)  chronicling. 
B)  listing. 
C)  posting. 
D)  journalizing. 
A)  chronicling. 
B)  listing. 
C)  posting. 
D)  journalizing.

Question 9

The ledger account balances for Perkins Company are listed below.   
Instructions
Prepare a trial balance in proper form for Perkins at December 31, 2010.

Accepted Answer

The answer of The ledger account balances for Perkins Company...

Question 10

The ledger accounts of the Redlands Place Gym at June 30, 2010 are shown below:   
Instructions
Prepare a trial balance with the ledger accounts arranged in the proper financial statement order. Include the appropriate heading.

Accepted Answer

The answer of The ledger accounts of the Redlands Place...

Question 11

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 12

The normal balance of an expense is a credit.

Accepted Answer

A) True 
 B)False

Question 13

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 14

A journal provides

Accepted Answer

A)  the balances for each account. 
B)  information about a transaction in several different places. 
C)  a list of all accounts used in the business. 
D)  a chronological record of transactions. 
A)  the balances for each account. 
B)  information about a transaction in several different places. 
C)  a list of all accounts used in the business. 
D)  a chronological record of transactions.

Question 15

Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.
1. The owner, Athena Lu, invests $35,000 in cash in starting a real estate office operating as a sole proprietorship.
2. Purchased $400 of office supplies on credit.
3. Purchased office equipment for $8,000, paying $2,000 in cash and signed a 30-day, $6,000, note payable.
4. Real estate commissions billed to clients amount to $4,000.
5. Paid $700 in cash for the current month's rent.
6. Paid $200 cash on account for office supplies purchased in transaction 2.
7. Received a bill for $600 for advertising for the current month.
8. Paid $2,200 cash for office salaries.
9. Lu withdrew $1,200 from the business for living expenses.
10. Received a check for $3,000 from a client in payment on account for commissions billed in transaction 4.

Accepted Answer

The answer of Journalize the following business transactions in general...

Question 16

A numbering system for a chart of accounts

Accepted Answer

A)  is prescribed by GAAP. 
B)  is uniform for all businesses. 
C)  usually starts with income statement accounts. 
D)  usually starts with balance sheet accounts. 
A)  is prescribed by GAAP. 
B)  is uniform for all businesses. 
C)  usually starts with income statement accounts. 
D)  usually starts with balance sheet accounts.

Question 17

The left side of an account is

Accepted Answer

A)  blank. 
B)  a description of the account. 
C)  the debit side. 
D)  the balance of the account. 
A)  blank. 
B)  a description of the account. 
C)  the debit side. 
D)  the balance of the account.

Question 18

On July 7, 2010, Anaya Enterprises performed cash services of $1,400. The entry to record this transaction would include

Accepted Answer

A)  a debit to Service Revenue of $1,400. 
B)  a credit to Accounts Receivable of $1,400. 
C)  a debit to Cash of $1,400. 
D)  a credit to Accounts Payable of $1,400. 
A)  a debit to Service Revenue of $1,400. 
B)  a credit to Accounts Receivable of $1,400. 
C)  a debit to Cash of $1,400. 
D)  a credit to Accounts Payable of $1,400.

Question 19

The right side of an account

Accepted Answer

A)  is the correct side. 
B)  reflects all transactions for the accounting period. 
C)  shows all the balances of the accounts in the system. 
D)  is the credit side. 
A)  is the correct side. 
B)  reflects all transactions for the accounting period. 
C)  shows all the balances of the accounts in the system. 
D)  is the credit side.

Question 20

A trial balance would only help in detecting which one of the following errors?

Accepted Answer

A)  A transaction that is not journalized 
B)  A journal entry that is posted twice 
C)  Offsetting errors are made in recording the transaction 
D)  A transposition error when transferring the debit side of journal entry to the ledger 
A)  A transaction that is not journalized 
B)  A journal entry that is posted twice 
C)  Offsetting errors are made in recording the transaction 
D)  A transposition error when transferring the debit side of journal entry to the ledger

Exam 2: The Recording Process

Which of the following statements is not true?

During February 2010, its first month of operations, the owner of Alona Enterprises invested cash of $25,000. Alona had cash revenues of $4,000 and paid expenses of $7,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

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

The best interpretation of the word credit is the

Pastorek Company purchased equipment for $1,800 cash. As a result of this event,

On August 13, 2010, Merrill Enterprises purchased office equipment for $1,000 and office supplies of $200 on account. Which of the following journal entries is recorded correctly and in the standard format?

Which of the following correctly identifies normal balances of accounts?

The name given to entering transaction data in the journal is

The ledger account balances for Perkins Company are listed below. Instructions Prepare a trial balance in proper form for Perkins at December 31, 2010.

The ledger accounts of the Redlands Place Gym at June 30, 2010 are shown below: Instructions Prepare a trial balance with the ledger accounts arranged in the proper financial statement order. Include the appropriate heading.

Credits

The normal balance of an expense is a credit.

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

A journal provides

A numbering system for a chart of accounts

The left side of an account is

On July 7, 2010, Anaya Enterprises performed cash services of $1,400. The entry to record this transaction would include

The right side of an account

A trial balance would only help in detecting which one of the following errors?

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 Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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