Question 1

A credit is NOT the normal balance for which account listed below?

Accepted Answer

A)  Capital account 
B)  Revenue account 
C)  Liability account 
D)  Drawings account 
A)  Capital account 
B)  Revenue account 
C)  Liability account 
D)  Drawings account

Question 2

An account can have debit entries and credit entries.

Accepted Answer

A) True 
 B)False

Question 3

The journal entry to record the investment of cash by the owners of a business would require a debit to the cash account and a credit to

Accepted Answer

A)  investments. 
B)  revenue. 
C)  owner's capital. 
D)  accounts receivable. 
A)  investments. 
B)  revenue. 
C)  owner's capital. 
D)  accounts receivable.

Question 4

In the second month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $500. The opening balance of the cash account was $200. The cash account has a

Accepted Answer

A)  $500 credit balance. 
B)  $900 debit balance. 
C)  $600 debit balance. 
D)  $400 credit balance. 
A)  $500 credit balance. 
B)  $900 debit balance. 
C)  $600 debit balance. 
D)  $400 credit balance.

Question 5

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

Accepted Answer

A) True 
 B)False

Question 6

For each of the following accounts indicate:
a. the type of account (Asset, Liability, Owner's capital, Owner's drawings, Revenue, Expense),
b. the debit and credit effects, and
c. the normal account balance.

Accepted Answer

1. a. Liability account. 
 b. Debit decr

Question 7

The normal balance of all liability accounts is a debit.

Accepted Answer

A) True 
 B)False

Question 8

The accounting cycle is a series of steps followed by accountants in preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 9

A 'T' account

Accepted Answer

A)  is a way of depicting the basic form of an account. 
B)  is listed in alphabetical order. 
C)  has the debit transactions equal to the credit transactions. 
D)  is used for accounts that have both a debit and credit balance. 
A)  is a way of depicting the basic form of an account. 
B)  is listed in alphabetical order. 
C)  has the debit transactions equal to the credit transactions. 
D)  is used for accounts that have both a debit and credit balance.

Question 10

For a sole proprietorship, the usual ordering of accounts in the general ledger is

Accepted Answer

A)  assets, liabilities, owner's capital, drawings, revenues, and expenses. 
B)  assets, liabilities, drawings, owner's capital, expenses, and revenues. 
C)  liabilities, assets, owner's capital, revenues, expenses, and drawings. 
D)  owners' capital, assets, liabilities, drawings, expenses, and revenues. 
A)  assets, liabilities, owner's capital, drawings, revenues, and expenses. 
B)  assets, liabilities, drawings, owner's capital, expenses, and revenues. 
C)  liabilities, assets, owner's capital, revenues, expenses, and drawings. 
D)  owners' capital, assets, liabilities, drawings, expenses, and revenues.

Question 11

Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.
1. Received $35,000 cash as investment from Roche Stone, the company's owner.
2. Purchased equipment for $50,000, paying $15,000 in cash and giving a note payable for the remainder.
3. Paid $3,000 for a one-year insurance policy.
4. Billed customers for $12,500 of services provided on account.
5. Paid monthly rent of $1,500.
6. Performed $7,000 of services and immediately received $7,000 cash.
7. Collected $2,000 from customers on account.
8. Hired a secretary.
9. Paid the secretary his first week's salary of $500.

Accepted Answer

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

Question 12

If the trial balance is out of balance and the difference between the debits and the credits is divisible evenly by 9 then there is a transposition error.

Accepted Answer

A) True 
 B)False

Question 13

Source documents can provide evidence that a transaction has occurred.

Accepted Answer

A) True 
 B)False

Question 14

Some of the following errors would cause the debit and credit columns of the trial balance to have unequal totals.
1. A payment of $700 to a creditor was recorded by a debit to Accounts Payable of $70 and a credit to Cash of $700.
2. A $340 payment for a printer was recorded by a debit to Computer Equipment of $34 and a credit to Cash for $34.
3. An account receivable in the amount of $2,000 was collected in full. The collection was recorded by a debit to Cash for $2,000 and a debit to Accounts Payable for $2,000.
4. An account payable was paid by issuing a cheque for $800. The payment was recorded by a debit to Accounts Payable $800 and a credit to Accounts Receivable $800.
Instructions
For each of the four cases, state whether the error would cause unequal totals in the trial balance. If the error causes unequal totals, indicate the amount of difference between the columns and state whether the debit or credit is larger. Each case is to be considered independently of the others.

Accepted Answer

1. The trial balance totals will be uneq

Question 15

A credit to the accounts receivable account

Accepted Answer

A)  indicates an increase in the amount owed by customers. 
B)  indicates a decrease in the amount owed by customers. 
C)  is an error. 
D)  must be accompanied by a debit to an liability account. 
A)  indicates an increase in the amount owed by customers. 
B)  indicates a decrease in the amount owed by customers. 
C)  is an error. 
D)  must be accompanied by a debit to an liability account.

Question 16

Match between columns
                        Premises: Accounts Receivable
Office Building
Prepaid Insurance
Owner's Capital
Service Revenue
Accounts Payable
Notes Receivable
Cash
Insurance Expense
Owner's Drawings

Accepted Answer

The Answer of Credit and Depit is...

Question 17

A transposition error involves the reversing of numbers in the posting process.

Accepted Answer

A) True 
 B)False

Question 18

In the second month of operations, the total of the debit entries to the accounts receivable account amounted to $500 and the total of the credit entries to the accounts receivable account amounted to $300. The opening balance of the accounts receivable account was $200. The accounts receivable account has a

Accepted Answer

A)  $500 debit balance. 
B)  $300 debit balance. 
C)  $400 debit balance. 
D)  $0 balance. 
A)  $500 debit balance. 
B)  $300 debit balance. 
C)  $400 debit balance. 
D)  $0 balance.

Question 19

If a journal entry is posted twice, then this error will be found when the trial balance is produced.

Accepted Answer

A) True 
 B)False

Question 20

Evidence that would NOT help with determining the effects of a transaction on the accounts in a computerized environment would be

Accepted Answer

A)  a invoice from a supplier. 
B)  an invoice from a customer. 
C)  an advertising brochure. 
D)  a cheque. 
A)  a invoice from a supplier. 
B)  an invoice from a customer. 
C)  an advertising brochure. 
D)  a cheque.

A credit is NOT the normal balance for which account listed below?

An account can have debit entries and credit entries.

The journal entry to record the investment of cash by the owners of a business would require a debit to the cash account and a credit to

In the second month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $500. The opening balance of the cash account was $200. The cash account has a

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

For each of the following accounts indicate: a. the type of account (Asset, Liability, Owner's capital, Owner's drawings, Revenue, Expense), b. the debit and credit effects, and c. the normal account balance.

The normal balance of all liability accounts is a debit.

The accounting cycle is a series of steps followed by accountants in preparing financial statements.

A 'T' account

For a sole proprietorship, the usual ordering of accounts in the general ledger is

If the trial balance is out of balance and the difference between the debits and the credits is divisible evenly by 9 then there is a transposition error.

Source documents can provide evidence that a transaction has occurred.

A credit to the accounts receivable account

A transposition error involves the reversing of numbers in the posting process.

If a journal entry is posted twice, then this error will be found when the trial balance is produced.

Evidence that would NOT help with determining the effects of a transaction on the accounts in a computerized environment would be

Accounting in Action

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 2: The Recording Process

A credit is NOT the normal balance for which account listed below?

An account can have debit entries and credit entries.

The journal entry to record the investment of cash by the owners of a business would require a debit to the cash account and a credit to

In the second month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $500. The opening balance of the cash account was $200. The cash account has a

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

For each of the following accounts indicate: a. the type of account (Asset, Liability, Owner's capital, Owner's drawings, Revenue, Expense), b. the debit and credit effects, and c. the normal account balance.

The normal balance of all liability accounts is a debit.

The accounting cycle is a series of steps followed by accountants in preparing financial statements.

A 'T' account

For a sole proprietorship, the usual ordering of accounts in the general ledger is

If the trial balance is out of balance and the difference between the debits and the credits is divisible evenly by 9 then there is a transposition error.

Source documents can provide evidence that a transaction has occurred.

A credit to the accounts receivable account

A transposition error involves the reversing of numbers in the posting process.

If a journal entry is posted twice, then this error will be found when the trial balance is produced.

Evidence that would NOT help with determining the effects of a transaction on the accounts in a computerized environment would be

Accounting in Action

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters