Question 1

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 2

A three column form of account is so named because it has columns for

Accepted Answer

A) debit, credit, and account name. 
B) debit, credit, and reference. 
C) debit, credit, and balance. 
D) debit, credit, and date. 
A) debit, credit, and account name. 
B) debit, credit, and reference. 
C) debit, credit, and balance. 
D) debit, credit, and date.

Question 3

At January 1, 2010, LeAnna Industries reported retained earnings of $130,000.During 2011, LeAnna had a net loss of $30,000 and paid dividends of $20,000.At December 31, 2011, the amount of retained earnings is

Accepted Answer

A) $130,000. 
B) $140,000. 
C) $100,000. 
D) $80,000. 
A) $130,000. 
B) $140,000. 
C) $100,000. 
D) $80,000.

Question 4

An account will have a credit balance if the

Accepted Answer

A) credits exceed the debits. 
B) first transaction entered was a credit. 
C) debits exceed the credits. 
D) last transaction entered was a credit. 
A) credits exceed the debits. 
B) first transaction entered was a credit. 
C) debits exceed the credits. 
D) last transaction entered was a credit.

Question 5

When debits do not equal credits on the trial balance, this indicates that the company has net income that needs to be transferred to the retained earnings account.

Accepted Answer

A) True 
 B)False

Question 6

At September 1,2011, Crews Co. reported equity of $£ 136,000$. During the month, Crews generated revenues of $£ 20,000$, incurred expenses of $£ 12,000$, purchased equipment for $£ 5,000$ and paid dividends of $£ 2,000$. What is the amount of equity at September 30, 2011 ?

Accepted Answer

A)  $£ 136,000$ 
B)  $£ 8,000$ 
C)  $£ 137,000$ 
D)  $£ 142,000$ 
A)  $£ 136,000$ 
B)  $£ 8,000$ 
C)  $£ 137,000$ 
D)  $£ 142,000$

Question 7

Debit and credit can be interpreted to mean increase and decrease, respectively.

Accepted Answer

A) True 
 B)False

Question 8

Another name for the journal is the

Accepted Answer

A) listing. 
B) book of original entry. 
C) book of accounts. 
D) book of source documents. 
A) listing. 
B) book of original entry. 
C) book of accounts. 
D) book of source documents.

Question 9

Entries that impact the income statement are called simple entries, whereas entries that impact the statement of financial position are called compound entries.

Accepted Answer

A) True 
 B)False

Question 10

The first step in posting involves

Accepted Answer

A) entering in the appropriate ledger account the date, journal page, and debit amount shown in the journal. 
B) writing in the journal the account number to which the debit amount was posted. 
C) writing in the journal the account number to which the credit amount was posted. 
D) entering in the appropriate ledger account the date, journal page, and credit amount shown in the journal. 
A) entering in the appropriate ledger account the date, journal page, and debit amount shown in the journal. 
B) writing in the journal the account number to which the debit amount was posted. 
C) writing in the journal the account number to which the credit amount was posted. 
D) entering in the appropriate ledger account the date, journal page, and credit amount shown in the journal.

Question 11

The Dividends account

Accepted Answer

A) appears on the income statement along with the expenses of the business. 
B) must show transactions every accounting period. 
C) is increased with debits and decreased with credits. 
D) is not a proper subdivision of retained earnings. 
A) appears on the income statement along with the expenses of the business. 
B) must show transactions every accounting period. 
C) is increased with debits and decreased with credits. 
D) is not a proper subdivision of retained earnings.

Question 12

Which of the following accounts is reported in the equity section of the statement of financial position?

Accepted Answer

A) Dividends. 
B) Share capital-ordinary. 
C) Revenues 
D) All of the choices are reported in the equity section of the statement of financial position. 
A) Dividends. 
B) Share capital-ordinary. 
C) Revenues 
D) All of the choices are reported in the equity section of the statement of financial position.

Question 13

On August 13, 2011, Merrill Enterprises purchased office equipment for $1,500 and office supplies of $300 on account.Which of the following journal entries is recorded correctly and in the standard format?

Accepted Answer

A)  $\begin{array} { l  }\text { Office Equipment }&1,500 \
 \text { Account Payable }&&1,800 \
 \text {Office Supplies }& 300\\end{array}$ 
B)  $\begin{array} { l  }\text {Office Equipment.  }&& 1,500\
 \text {Office Supplies }&&300 \
 \text {Accounts Payable }&1,800 \\end{array}$ 
C)  $\begin{array} { l  }\text {Accounts Payable }&1,800 \
 \text { Office Equipment.}&&1,500 \
 \text {Office Supplies }&&300 \\end{array}$ 
D)  $\begin{array} { l  }\text {  Office Equipment  }&1,500 \
 \text {Office Supplies }&300 \
 \text { Accounts Payable}&&1,800 \
\end{array}$ 
A)  $\begin{array} { l  }\text { Office Equipment }&1,500 \
 \text { Account Payable }&&1,800 \
 \text {Office Supplies }& 300\\end{array}$ 
B)  $\begin{array} { l  }\text {Office Equipment.  }&& 1,500\
 \text {Office Supplies }&&300 \
 \text {Accounts Payable }&1,800 \\end{array}$ 
C)  $\begin{array} { l  }\text {Accounts Payable }&1,800 \
 \text { Office Equipment.}&&1,500 \
 \text {Office Supplies }&&300 \\end{array}$ 
D)  $\begin{array} { l  }\text {  Office Equipment  }&1,500 \
 \text {Office Supplies }&300 \
 \text { Accounts Payable}&&1,800 \
\end{array}$

Question 14

After transaction information has been recorded in the journal, it is transferred to the

Accepted Answer

A) trial balance. 
B) income statement. 
C) book of original entry. 
D) ledger. 
A) trial balance. 
B) income statement. 
C) book of original entry. 
D) ledger.

Question 15

The trial balance will not balance when incorrect account titles are used in journalizing or posting.

Accepted Answer

A) True 
 B)False

Question 16

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 17

A credit balance in a liability account indicates that an error in recording has occurred.

Accepted Answer

A) True 
 B)False

Question 18

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is false?

Accepted Answer

A) Revenues increase equity. 
B) Revenues have normal credit balances. 
C) Revenues are a positive factor in the computation of net income. 
D) Revenues are increased by debits. 
A) Revenues increase equity. 
B) Revenues have normal credit balances. 
C) Revenues are a positive factor in the computation of net income. 
D) Revenues are increased by debits.

Question 20

Which one of the following is not a part of an account?

Accepted Answer

A) Credit side 
B) Trial balance 
C) Debit side 
D) Title 
A) Credit side 
B) Trial balance 
C) Debit side 
D) Title

Credits

A three column form of account is so named because it has columns for

At January 1, 2010, LeAnna Industries reported retained earnings of $130,000.During 2011, LeAnna had a net loss of $30,000 and paid dividends of $20,000.At December 31, 2011, the amount of retained earnings is

An account will have a credit balance if the

When debits do not equal credits on the trial balance, this indicates that the company has net income that needs to be transferred to the retained earnings account.

At September 1,2011, Crews Co. reported equity of $£ 136,000$ . During the month, Crews generated revenues of $£ 20,000$ , incurred expenses of $£ 12,000$ , purchased equipment for $£ 5,000$ and paid dividends of $£ 2,000$ . What is the amount of equity at September 30, 2011 ?

Debit and credit can be interpreted to mean increase and decrease, respectively.

Another name for the journal is the

Entries that impact the income statement are called simple entries, whereas entries that impact the statement of financial position are called compound entries.

The first step in posting involves

The Dividends account

Which of the following accounts is reported in the equity section of the statement of financial position?

On August 13, 2011, Merrill Enterprises purchased office equipment for $1,500 and office supplies of $300 on account.Which of the following journal entries is recorded correctly and in the standard format?

After transaction information has been recorded in the journal, it is transferred to the

The trial balance will not balance when incorrect account titles are used in journalizing or posting.

The best interpretation of the word credit is the

A credit balance in a liability account indicates that an error in recording has occurred.

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

Which of the following statements is false?

Which one of the following is not a part of an account?

Accounting in Action

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 2: The Recording Process

Credits

A three column form of account is so named because it has columns for

At January 1, 2010, LeAnna Industries reported retained earnings of $130,000.During 2011, LeAnna had a net loss of $30,000 and paid dividends of $20,000.At December 31, 2011, the amount of retained earnings is

An account will have a credit balance if the

When debits do not equal credits on the trial balance, this indicates that the company has net income that needs to be transferred to the retained earnings account.

Debit and credit can be interpreted to mean increase and decrease, respectively.

Another name for the journal is the

Entries that impact the income statement are called simple entries, whereas entries that impact the statement of financial position are called compound entries.

The first step in posting involves

The Dividends account

Which of the following accounts is reported in the equity section of the statement of financial position?

On August 13, 2011, Merrill Enterprises purchased office equipment for $1,500 and office supplies of $300 on account.Which of the following journal entries is recorded correctly and in the standard format?

After transaction information has been recorded in the journal, it is transferred to the

The trial balance will not balance when incorrect account titles are used in journalizing or posting.

The best interpretation of the word credit is the

A credit balance in a liability account indicates that an error in recording has occurred.

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

Which of the following statements is false?

Which one of the following is not a part of an account?

Accounting in Action

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters