Question 1

If a company purchases equipment paying cash, the journal entry to record this transaction will include a debit to Cash.

Accepted Answer

A) True 
 B)False

Question 2

A double-entry accounting system is an accounting system:

Accepted Answer

A) That may only be used if T-accounts are used. 
B) That insures that errors never occur. 
C) In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits. 
D) That records the effects of transactions and other events in at least two accounts with equal debits and credits. 
E) That records each transaction twice. 
A) That may only be used if T-accounts are used. 
B) That insures that errors never occur. 
C) In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits. 
D) That records the effects of transactions and other events in at least two accounts with equal debits and credits. 
E) That records each transaction twice.

Question 3

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

Accepted Answer

A) True 
 B)False

Question 4

Ralph Pine Consulting received its telephone bill in the amount of $300, and immediately paid it. Pine's general journal entry to record this transaction will include a

Accepted Answer

A) Debit to Cash for $300. 
B) Debit to Accounts Payable for $300. 
C) Credit to Telephone Expense for $300. 
D) Debit to Telephone Expense for $300. 
E) Credit to Accounts Payable for $300. 
A) Debit to Cash for $300. 
B) Debit to Accounts Payable for $300. 
C) Credit to Telephone Expense for $300. 
D) Debit to Telephone Expense for $300. 
E) Credit to Accounts Payable for $300.

Question 5

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?
A)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 1,500 & \
\hline \text { Design Revenue } & & 1,500 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Accounts Receivable } & & 1,500 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Trimble Graphic Design receives $1,500 from a...

Question 6

On January 1 of the current year, Jimmy's Sandwich Company reported owner's capital totaling $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year Jimmy withdrew $20,000 from the company. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, the change in owner's capital during the year was:

Accepted Answer

A) A decrease of $9,500. 
B) An increase of $73,500. 
C) An increase of $9,500. 
D) A decrease of $30,500. 
E) An increase of $30,500. 
A) A decrease of $9,500. 
B) An increase of $73,500. 
C) An increase of $9,500. 
D) A decrease of $30,500. 
E) An increase of $30,500.

Question 7

A credit entry:

Accepted Answer

A) Is recorded on the left side of a T-account. 
B) Is always a decrease in an account. 
C) Increases asset and expense accounts, and decreases liability, owner's capital, and revenue accounts. 
D) Is always an increase in an account. 
E) Decreases asset and expense accounts, and increases liability, owner's capital, and revenue accounts. 
A) Is recorded on the left side of a T-account. 
B) Is always a decrease in an account. 
C) Increases asset and expense accounts, and decreases liability, owner's capital, and revenue accounts. 
D) Is always an increase in an account. 
E) Decreases asset and expense accounts, and increases liability, owner's capital, and revenue accounts.

Question 8

Unearned revenues refer to a(n):

Accepted Answer

A) Expense incurred because a customer has paid in advance. 
B) Increase in revenues as a result of delivering products or services to a customer. 
C) Liability that is settled in the future when a company delivers its products or services. 
D) Decrease in an asset. 
E) Asset that will be used over time. 
A) Expense incurred because a customer has paid in advance. 
B) Increase in revenues as a result of delivering products or services to a customer. 
C) Liability that is settled in the future when a company delivers its products or services. 
D) Decrease in an asset. 
E) Asset that will be used over time.

Question 9

Explain the recording and posting processes.

Accepted Answer

Information from business transactions a

Question 10

The first step in the processing of a transaction is to analyze the transaction and source documents.

Accepted Answer

A) True 
 B)False

Question 11

An asset created by prepayment of an insurance premium is:

Accepted Answer

A) Recorded as a credit to Prepaid Insurance. 
B) Recorded as a credit to Unearned Revenue. 
C) Recorded as a debit to Prepaid Insurance. 
D) Not recorded in the accounting records until the insurance period expires. 
E) Recorded as a debit to Unearned Revenue. 
A) Recorded as a credit to Prepaid Insurance. 
B) Recorded as a credit to Unearned Revenue. 
C) Recorded as a debit to Prepaid Insurance. 
D) Not recorded in the accounting records until the insurance period expires. 
E) Recorded as a debit to Unearned Revenue.

Question 12

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Accepted Answer

A) True 
 B)False

Question 13

Unearned revenues are classified as liabilities.

Accepted Answer

A) True 
 B)False

Question 14

The numbering system used in a company's chart of accounts:

Accepted Answer

A) Typically begins with balance sheet accounts. 
B) Is the same for all companies. 
C) Is determined by generally accepted accounting principles. 
D) Typically begins with income statement accounts. 
E) Depends on the source documents used in the accounting process. 
A) Typically begins with balance sheet accounts. 
B) Is the same for all companies. 
C) Is determined by generally accepted accounting principles. 
D) Typically begins with income statement accounts. 
E) Depends on the source documents used in the accounting process.

Question 15

Identify the account below that is classified as a liability account:

Accepted Answer

A) J. Jackson, Capital 
B) Equipment 
C) Accounts Payable 
D) Salaries Expense 
E) Cash 
A) J. Jackson, Capital 
B) Equipment 
C) Accounts Payable 
D) Salaries Expense 
E) Cash

Question 16

A revenue account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 17

Identify the account used by businesses to record the transfer of assets from a business to its owner for personal use:

Accepted Answer

A) The owner's withdrawals account. 
B) The owner's capital account. 
C) A revenue account. 
D) An expense account. 
E) A liability account. 
A) The owner's withdrawals account. 
B) The owner's capital account. 
C) A revenue account. 
D) An expense account. 
E) A liability account.

Question 18

Larry Bar opened a frame shop and completed these transactions: 1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000.
2. Purchased $70 of office supplies on credit.
3. Paid $1,200 cash for the receptionist's salary.
4. Sold a custom frame service and collected $1,500 cash on the sale.
5. Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

Accepted Answer

A) $38,700. 
B) $40,300. 
C) $300. 
D) $41,500. 
E) $38,500. 
A) $38,700. 
B) $40,300. 
C) $300. 
D) $41,500. 
E) $38,500.

Question 19

A company provided $12,000 of consulting services, and was immediately paid in cash by the customer.Identify the journal entry below that properly records this transaction.
$$\begin{array}{l}
\text { A) }\
\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 12,000 & \
\hline \text { Consulting services revenue } & & 12,000 \
\hline
\end{array}
\end{array}$$
B)
$\begin{array}{|l|r|r|}
\hline \text { Accounts receivable } & 12,000 & \
\hline \text { Cash } & & 12,000 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Consulting services revenue } & 12,000 & \
\hline \text { Cash } & & 12,000 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|l|}
\hline \text { Cash } & 12,000 & \
\hline \text { Consulting services revenue } & & 12,000 \
\hline
\end{array}$
E)
$\begin{array}{|l|r|l|}
\hline \text { Accounts payable } & 12,000 & \
\hline \text { Consulting services revenue } & & 12,000 \
\hline
\end{array}$

Accepted Answer

The answer of A company provided $12,000 of consulting services,...

Question 20

Match between columns
                        Premises: To increase Salaries Expense.
To decrease Cash
To decrease Accounts Receivable.
To increase Owner, Capital
To increase Owner, Withdrawals.
To decrease Accounts Payable.
To decrease Supplies.
To increase Revenue.

Accepted Answer

The Answer of Debit and Credit is...

If a company purchases equipment paying cash, the journal entry to record this transaction will include a debit to Cash.

A double-entry accounting system is an accounting system:

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

Ralph Pine Consulting received its telephone bill in the amount of $300, and immediately paid it. Pine's general journal entry to record this transaction will include a

A credit entry:

Unearned revenues refer to a(n):

Explain the recording and posting processes.

The first step in the processing of a transaction is to analyze the transaction and source documents.

An asset created by prepayment of an insurance premium is:

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Unearned revenues are classified as liabilities.

The numbering system used in a company's chart of accounts:

Identify the account below that is classified as a liability account:

A revenue account normally has a debit balance.

Identify the account used by businesses to record the transfer of assets from a business to its owner for personal use:

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Filters

Exam 2: Analyzing and Recording Transactions

If a company purchases equipment paying cash, the journal entry to record this transaction will include a debit to Cash.

A double-entry accounting system is an accounting system:

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

Ralph Pine Consulting received its telephone bill in the amount of $300, and immediately paid it. Pine's general journal entry to record this transaction will include a

A credit entry:

Unearned revenues refer to a(n):

Explain the recording and posting processes.

The first step in the processing of a transaction is to analyze the transaction and source documents.

An asset created by prepayment of an insurance premium is:

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

Unearned revenues are classified as liabilities.

The numbering system used in a company's chart of accounts:

Identify the account below that is classified as a liability account:

A revenue account normally has a debit balance.

Identify the account used by businesses to record the transfer of assets from a business to its owner for personal use:

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Filters