Question 1

Which type of account is decreased when a company pays its employees with cash?

Accepted Answer

A) A prepaid asset 
B) A liability 
C) An asset 
D) Owners' equity 
A) A prepaid asset 
B) A liability 
C) An asset 
D) Owners' equity

Question 2

All business transactions involve an increase in at least one account and a decrease in at least one other account.

Accepted Answer

A) True 
 B)False

Question 3

Consider the following transactions: I. Owners invested $8,000 cash to begin the business
II. Provided services for cash, $6,000
III. Provided services on account, $4,000
IV. Paid cash for expenses, $7,500
How much cash does the business have?

Accepted Answer

A) $ 2,500 
B) $ 6,500 
C) $ 4,500 
D) $10,500 
A) $ 2,500 
B) $ 6,500 
C) $ 4,500 
D) $10,500

Question 4

The process of transferring information from the journal to the ledger is known as:

Accepted Answer

A) converting. 
B) posting. 
C) ledgerizing. 
D) bookkeeping. 
A) converting. 
B) posting. 
C) ledgerizing. 
D) bookkeeping.

Question 5

The ledger provides a good indication of how much cash is available for the business to use at any one point in time.

Accepted Answer

A) True 
 B)False

Question 6

The accounting records are considered to be correct if the total debits of the trial balance equal the total credits on the Post Closing Trial Balance.

Accepted Answer

A) True 
 B)False

Question 7

In accounting, the process of posting involves transferring data from:

Accepted Answer

A) the source documents to the journal. 
B) the source documents to the ledger. 
C) the journal to the ledger. 
D) the ledger to the journal. 
A) the source documents to the journal. 
B) the source documents to the ledger. 
C) the journal to the ledger. 
D) the ledger to the journal.

Question 8

Accounting transactions are initially recorded in the:

Accepted Answer

A) poster. 
B) ledger. 
C) journal. 
D) T- account. 
A) poster. 
B) ledger. 
C) journal. 
D) T- account.

Question 9

An owner makes an investment of cash into the business. This transaction would include a:

Accepted Answer

A) debit to Common Stock and a credit to Retained Earnings. 
B) debit to Retained Earnings and a credit to Cash. 
C) debit to Common Stock and a credit to Common Stock. 
D) debit to Cash and a credit to Common Stock. 
A) debit to Common Stock and a credit to Retained Earnings. 
B) debit to Retained Earnings and a credit to Cash. 
C) debit to Common Stock and a credit to Common Stock. 
D) debit to Cash and a credit to Common Stock.

Question 10

What is one of the first steps in the journalizing process?

Accepted Answer

A) Identify the transaction from source documents and other information. 
B) Post the transaction to the ledger. 
C) Enter the transaction in the journal. 
D) Determine what accounts will be affected and whether to debit or credit them. 
A) Identify the transaction from source documents and other information. 
B) Post the transaction to the ledger. 
C) Enter the transaction in the journal. 
D) Determine what accounts will be affected and whether to debit or credit them.

Question 11

Which of the following statements regarding accounts is true?

Accepted Answer

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

Question 12

All of the following accounts would be considered assets EXCEPT for:

Accepted Answer

A) prepaid expenses. 
B) notes receivable. 
C) retained earnings. 
D) cash. 
A) prepaid expenses. 
B) notes receivable. 
C) retained earnings. 
D) cash.

Question 13

Notes payable, accounts payable, taxes payable and salaries payable are all examples of:

Accepted Answer

A) revenues. 
B) expenses. 
C) assets. 
D) liabilities. 
A) revenues. 
B) expenses. 
C) assets. 
D) liabilities.

Question 14

A trial balance has which of the following features?

Accepted Answer

A) Totals for all accounts listed in the ledger 
B) Totals for balance sheet accounts only 
C) Totals for income statement accounts only 
D) Both A and B are correct. 
A) Totals for all accounts listed in the ledger 
B) Totals for balance sheet accounts only 
C) Totals for income statement accounts only 
D) Both A and B are correct.

Question 15

If the payment of a utilities bill is not posted, assets will be overstated.

Accepted Answer

A) True 
 B)False

Question 16

The payment of salaries to employees would:

Accepted Answer

A) increase liabilities and increase net income. 
B) decrease net income and decrease assets. 
C) decrease assets and decrease liabilities. 
D) increase assets and increase liabilities. 
A) increase liabilities and increase net income. 
B) decrease net income and decrease assets. 
C) decrease assets and decrease liabilities. 
D) increase assets and increase liabilities.

Question 17

The trial balance is not a formal accounting statement.

Accepted Answer

A) True 
 B)False

Question 18

A trial balance prepared by an inexperienced accountant showed total debits of $540,000 and total credits of $450,000. This discrepancy is most likely due to which type of error?

Accepted Answer

A) Failure to post a transaction 
B) Mislabeling 
C) Slide 
D) Transposition 
A) Failure to post a transaction 
B) Mislabeling 
C) Slide 
D) Transposition

Question 19

An account is increased by a debit and has a normal balance of a debit. This account is an)

Accepted Answer

A) liability account. 
B) expense account. 
C) asset account. 
D) both an expense account and an asset account. 
A) liability account. 
B) expense account. 
C) asset account. 
D) both an expense account and an asset account.

Question 20

Making a cash payment to settle a debt would include a:

Accepted Answer

A) debit to Cash. 
B) credit to Cash Payments. 
C) credit to Accounts Receivable. 
D) debit to Accounts Payable. 
A) debit to Cash. 
B) credit to Cash Payments. 
C) credit to Accounts Receivable. 
D) debit to Accounts Payable.

Which type of account is decreased when a company pays its employees with cash?

All business transactions involve an increase in at least one account and a decrease in at least one other account.

Consider the following transactions: I. Owners invested $8,000 cash to begin the business II. Provided services for cash, $6,000 III. Provided services on account, $4,000 IV. Paid cash for expenses, $7,500 How much cash does the business have?

The process of transferring information from the journal to the ledger is known as:

The ledger provides a good indication of how much cash is available for the business to use at any one point in time.

The accounting records are considered to be correct if the total debits of the trial balance equal the total credits on the Post Closing Trial Balance.

In accounting, the process of posting involves transferring data from:

Accounting transactions are initially recorded in the:

An owner makes an investment of cash into the business. This transaction would include a:

What is one of the first steps in the journalizing process?

Which of the following statements regarding accounts is true?

All of the following accounts would be considered assets EXCEPT for:

Notes payable, accounts payable, taxes payable and salaries payable are all examples of:

A trial balance has which of the following features?

If the payment of a utilities bill is not posted, assets will be overstated.

The payment of salaries to employees would:

The trial balance is not a formal accounting statement.

A trial balance prepared by an inexperienced accountant showed total debits of $540,000 and total credits of $450,000. This discrepancy is most likely due to which type of error?

An account is increased by a debit and has a normal balance of a debit. This account is an)

Making a cash payment to settle a debt would include a:

The Financial Statements

Accrual Accounting and Income

Internal Control and Cash

Short-Term Investments Receivables

Inventory and Cost of Goods Sold

Plant Assets and Intangibles

Liabilities

Stockholders Equity

Long-Term Investments and International Operations

The Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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Exam 2: Transaction Analysis

Which type of account is decreased when a company pays its employees with cash?

All business transactions involve an increase in at least one account and a decrease in at least one other account.

Consider the following transactions: I. Owners invested $8,000 cash to begin the business II. Provided services for cash, $6,000 III. Provided services on account, $4,000 IV. Paid cash for expenses, $7,500 How much cash does the business have?

The process of transferring information from the journal to the ledger is known as:

The ledger provides a good indication of how much cash is available for the business to use at any one point in time.

The accounting records are considered to be correct if the total debits of the trial balance equal the total credits on the Post Closing Trial Balance.

In accounting, the process of posting involves transferring data from:

Accounting transactions are initially recorded in the:

An owner makes an investment of cash into the business. This transaction would include a:

What is one of the first steps in the journalizing process?

Which of the following statements regarding accounts is true?

All of the following accounts would be considered assets EXCEPT for:

Notes payable, accounts payable, taxes payable and salaries payable are all examples of:

A trial balance has which of the following features?

If the payment of a utilities bill is not posted, assets will be overstated.

The payment of salaries to employees would:

The trial balance is not a formal accounting statement.

A trial balance prepared by an inexperienced accountant showed total debits of $540,000 and total credits of $450,000. This discrepancy is most likely due to which type of error?

An account is increased by a debit and has a normal balance of a debit. This account is an)

Making a cash payment to settle a debt would include a:

The Financial Statements

Accrual Accounting and Income

Internal Control and Cash

Short-Term Investments Receivables

Inventory and Cost of Goods Sold

Plant Assets and Intangibles

Liabilities

Stockholders Equity

Long-Term Investments and International Operations

The Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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