Question 1

A compound entry is:

Accepted Answer

A)  a transaction involving more than one debit and/or credit. 
B)  used to prepare the trial balance. 
C)  to duplicate an entry. 
D)  found on the income statement. 
A)  a transaction involving more than one debit and/or credit. 
B)  used to prepare the trial balance. 
C)  to duplicate an entry. 
D)  found on the income statement.

Question 2

Expenses paid in advance are recorded as Assets.

Accepted Answer

A) True 
 B)False

Question 3

The business incurred an expense and planned to pay for the expense later on credit. To record this:

Accepted Answer

A)  an expense is debited and a liability is credited. 
B)  an expense is debited and an asset is credited. 
C)  an asset is debited and asset is credited. 
D)  None of the above answers are correct. 
A)  an expense is debited and a liability is credited. 
B)  an expense is debited and an asset is credited. 
C)  an asset is debited and asset is credited. 
D)  None of the above answers are correct.

Question 4

The credit side is always the left side of the account.

Accepted Answer

A) True 
 B)False

Question 5

A liability would be debited and an asset credited if:

Accepted Answer

A)  the business paid a creditor. 
B)  the business incurred an expense and did not pay the expense immediately. 
C)  the business bought supplies on account. 
D)  the business bought supplies for cash. 
A)  the business paid a creditor. 
B)  the business incurred an expense and did not pay the expense immediately. 
C)  the business bought supplies on account. 
D)  the business bought supplies for cash.

Question 6

Wages Expense appears on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account appears upon.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 8

The Accounts Receivable account is increased by a credit.

Accepted Answer

A) True 
 B)False

Question 9

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account appears upon.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 10

The owner invested a personal truck in the business. To record this transaction:

Accepted Answer

A)  debit Equipment and credit Revenue. 
B)  debit Accounts Payable and credit Equipment. 
C)  debit Equipment and credit Capital. 
D)  credit Equipment and debit Capital. 
A)  debit Equipment and credit Revenue. 
B)  debit Accounts Payable and credit Equipment. 
C)  debit Equipment and credit Capital. 
D)  credit Equipment and debit Capital.

Question 11

Accounts Payable is an asset account that is increased on the debit side.

Accepted Answer

A) True 
 B)False

Question 12

The business bought supplies on account. To record this:

Accepted Answer

A)  an expense is debited and a liability is credited. 
B)  an asset is debited and a liability is credited. 
C)  an asset is credited and a liability is credited. 
D)  None of the above answers are correct. 
A)  an expense is debited and a liability is credited. 
B)  an asset is debited and a liability is credited. 
C)  an asset is credited and a liability is credited. 
D)  None of the above answers are correct.

Question 13

Accounts receivable decrease on the credit side of the account.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a financial statement?

Accepted Answer

A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Owner's Equity 
D)  All of the above 
A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Owner's Equity 
D)  All of the above

Question 15

Below is a chart of accounts. Following is a series of transactions. Indicate for each transaction the accounts that should be debited and credited by inserting the proper account number in the space provided.

Accepted Answer

The answer of Below is a chart of accounts. Following...

Question 16

Which of the following entries records the investment of cash by Sam, owner of a sole proprietorship?

Accepted Answer

A)  Debit John, Capital; credit Cash 
B)  Debit Cash; credit Revenue 
C)  Debit Sam, Withdrawals; credit Revenue 
D)  Debit Cash; credit Sam, Capital 
A)  Debit John, Capital; credit Cash 
B)  Debit Cash; credit Revenue 
C)  Debit Sam, Withdrawals; credit Revenue 
D)  Debit Cash; credit Sam, Capital

Question 17

A T account is used for demonstration purposes.

Accepted Answer

A) True 
 B)False

Question 18

After deciding which accounts are affected, the next step in analyzing a transaction is to determine to which categories the accounts belong.

Accepted Answer

A) True 
 B)False

Question 19

A debit to an asset account was posted as a debit to a liability account. This error would cause:

Accepted Answer

A)  assets to be understated. 
B)  liabilities to be overstated. 
C)  capital to be understated. 
D)  None of the above is correct. 
A)  assets to be understated. 
B)  liabilities to be overstated. 
C)  capital to be understated. 
D)  None of the above is correct.

Question 20

A credit to an asset account was posted as a credit to a liability account. This error would cause:

Accepted Answer

A)  assets to be understated. 
B)  liabilities to be overstated. 
C)  capital to be understated. 
D)  None of the above is correct. 
A)  assets to be understated. 
B)  liabilities to be overstated. 
C)  capital to be understated. 
D)  None of the above is correct.

Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

A compound entry is:

Expenses paid in advance are recorded as Assets.

The business incurred an expense and planned to pay for the expense later on credit. To record this:

The credit side is always the left side of the account.

A liability would be debited and an asset credited if:

Wages Expense appears on the balance sheet.

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account appears upon. -

The Accounts Receivable account is increased by a credit.

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account appears upon. -

The owner invested a personal truck in the business. To record this transaction:

Accounts Payable is an asset account that is increased on the debit side.

The business bought supplies on account. To record this:

Accounts receivable decrease on the credit side of the account.

Which of the following is a financial statement?

Below is a chart of accounts. Following is a series of transactions. Indicate for each transaction the accounts that should be debited and credited by inserting the proper account number in the space provided.

Which of the following entries records the investment of cash by Sam, owner of a sole proprietorship?

A T account is used for demonstration purposes.

After deciding which accounts are affected, the next step in analyzing a transaction is to determine to which categories the accounts belong.

A debit to an asset account was posted as a debit to a liability account. This error would cause:

A credit to an asset account was posted as a credit to a liability account. This error would cause:

Accounting Concepts and Procedures

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters