Question 1

Identify the account below that is classified as a liability in a company's chart of accounts:

Accepted Answer

A) Cash 
B) Accounts Receivable 
C) Supplies 
D) Salaries Expense 
E) Unearned Revenue 
A) Cash 
B) Accounts Receivable 
C) Supplies 
D) Salaries Expense 
E) Unearned Revenue

Question 2

If insurance coverage for the next two years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

Accepted Answer

A) True 
 B)False

Question 3

J. Brown Consulting immediately paid $500 cash for utilities for the current month. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.
A)
$\begin{array}{|l|r|r|}
\hline \text { Prepaid Utilities } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 500 & \
\hline \text { Cash } & & 500 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Cash } & 500 & \
\hline \text { Utilities Expense } & & 500 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of J. Brown Consulting immediately paid $500 cash...

Question 4

A company's ledger is:

Accepted Answer

A) A list of all accounts a company uses with an assigned identification number. 
B) A collection of documents that describe transactions and events entering the accounting process. 
C) A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item. 
D) A journal in which transactions are first recorded. 
E) A record containing all accounts and their balances used by the company. 
A) A list of all accounts a company uses with an assigned identification number. 
B) A collection of documents that describe transactions and events entering the accounting process. 
C) A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item. 
D) A journal in which transactions are first recorded. 
E) A record containing all accounts and their balances used by the company.

Question 5

A balanced trial balance is proof that no errors were made in journalizing transactions, posting to the ledger, and preparing the trial balance.

Accepted Answer

A) True 
 B)False

Question 6

Debit means increase and credit means decrease for all accounts.

Accepted Answer

A) True 
 B)False

Question 7

Mary Martin, the owner of Martin Consulting, withdrew $2,000 cash from the company for personal use. Identify the general journal entry below that Martin Consulting will make to record the transaction.
$$\begin{array}{l}
\text { A) }\
\begin{array} { | l | r | r | } 
\hline \text { M. Martin, Capital } & 2,000 & \
\hline \text { Cash } & & 2,000 \
\hline
\end{array}
\end{array}$$
B)
$\begin{array}{|l|r|r|}
\hline \text { M. Martin, Withdrawals } & 2,000 & \
\hline \text { M. Martin, Capital } & & 2,000 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 2,000 & \
\hline \text { M. Martin, Withdrawals } & & 2,000 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 2,000 & \
\hline \text { M. Martin, Capital } & & 2,000 \
\hline
\end{array}$
E)
$\begin{array}{|l|r|r|}
\hline \text { M. Martin, Withdrawals } & 2,000 & \
\hline \text { Cash } & & 2,000 \
\hline
\end{array}$

Accepted Answer

The answer of Mary Martin, the owner of Martin Consulting,...

Question 8

Identify the account below that is classified as an asset account:

Accepted Answer

A) Accounts Payable 
B) Unearned Revenue 
C) J. Jackson, Capital 
D) Service Revenue 
E) Supplies 
A) Accounts Payable 
B) Unearned Revenue 
C) J. Jackson, Capital 
D) Service Revenue 
E) Supplies

Question 9

An account balance is:

Accepted Answer

A) Assets = liabilities + equity. 
B) Always a credit. 
C) The difference between the total debits and total credits for an account including the beginning balance. 
D) The total of the debit side of the account. 
E) The total of the credit side of the account. 
A) Assets = liabilities + equity. 
B) Always a credit. 
C) The difference between the total debits and total credits for an account including the beginning balance. 
D) The total of the debit side of the account. 
E) The total of the credit side of the account.

Question 10

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of On December 3, the ABBJ Company paid...

Question 11

A business uses a credit to record:

Accepted Answer

A) A decrease in an asset account. 
B) A decrease in a capital account. 
C) A decrease in a revenue account. 
D) A decrease in an unearned revenue account. 
E) An increase in an expense account. 
A) A decrease in an asset account. 
B) A decrease in a capital account. 
C) A decrease in a revenue account. 
D) A decrease in an unearned revenue account. 
E) An increase in an expense account.

Question 12

Grills R Us Catering provided $1,000 of catering services and billed its client for the amount owed. Given the choices below, determine the general journal entry that Grills R Us Catering will make to record this transaction.
A)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Unearned Catering Revenue } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Catering Revenue } & 1,000 & \
\hline \text { Accounts Receivable } & & 1,000 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable } & 1,000 & \
\hline \text { Unearned Catering Revenue } & & 1,000 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Grills R Us Catering provided $1,000 of...

Question 13

If cash was incorrectly debited for $100 instead of correctly crediting it for $100, the cash account's balance will be overstated (too high).

Accepted Answer

A) True 
 B)False

Question 14

Using the following list of accounts and identification letters A through J for Homer's Management Co., enter the type of account and its normal balance into the table below. The first item is filled in as an example:
 $\begin{array}{ll}
\text { A. Homer, Capital } & \text { F. Prepaid Rent } \
\text { B. Interest Payable } & \text { G. Advertising Expense } \
\text { C. Land } & \text { H. Unearned Rent Revenue } \
\text { D. Homer, Withdrawals } & \text { I. Commissions Earned } \
\text { E. Fees Earned } & \text { J. Notes Receivable }
\end{array}$ 
 $$\begin{array} { l | c | c | c | c | c } 
&{ \text { Type of Account } } &&& { \text { Normal Bal ance } } \
\hline & \text { Astst } & \text { Liability } & \text { Equity } & \text { Debit } & \text { Credit } \
\hline \text { A } & & & \text { X } & & \text { X } \
\hline \text { B } & & & & & \
\hline \text { C } & & & & & \
\hline \text { D } & & & & & \
\hline \text { E } & & & & & \
\hline \text { F } & & & & & \
\hline \text { G } & & & & & \
\hline \text { H } & & & & & \
\hline \text { I } & & & & & \
\hline \text { J } & & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of Using the following list of accounts and...

Question 15

The right side of a T-account is a(n):

Accepted Answer

A) Increase. 
B) Account balance. 
C) Decrease. 
D) Debit. 
E) Credit. 
A) Increase. 
B) Account balance. 
C) Decrease. 
D) Debit. 
E) Credit.

Question 16

Which of the following statements is not true:

Accepted Answer

A) Accounts receivable are increased by customer payments. 
B) Accounts receivable are held by a seller. 
C) Accounts receivable are classified as assets. 
D) Accounts receivable are increased by billings to customers. 
E) Accounts receivable arise from credit sales. 
A) Accounts receivable are increased by customer payments. 
B) Accounts receivable are held by a seller. 
C) Accounts receivable are classified as assets. 
D) Accounts receivable are increased by billings to customers. 
E) Accounts receivable arise from credit sales.

Question 17

The same four basic financial statements are prepared by both U.S. GAAP and IFRS.

Accepted Answer

A) True 
 B)False

Question 18

The detail of individual revenue and expense accounts is reported on the statement of owner's equity.

Accepted Answer

A) True 
 B)False

Question 19

The balance column in a ledger account is:

Accepted Answer

A) A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction. 
B) Another name for the withdrawals account. 
C) An account entered on the balance sheet. 
D) An account used to record the transfers of assets from a business to its owner. 
E) A column for showing the balance of the account after each entry is posted. 
A) A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction. 
B) Another name for the withdrawals account. 
C) An account entered on the balance sheet. 
D) An account used to record the transfers of assets from a business to its owner. 
E) A column for showing the balance of the account after each entry is posted.

Question 20

An owner's withdrawal account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Identify the account below that is classified as a liability in a company's chart of accounts:

If insurance coverage for the next two years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

A company's ledger is:

A balanced trial balance is proof that no errors were made in journalizing transactions, posting to the ledger, and preparing the trial balance.

Debit means increase and credit means decrease for all accounts.

Identify the account below that is classified as an asset account:

An account balance is:

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

A business uses a credit to record:

If cash was incorrectly debited for $100 instead of correctly crediting it for $100, the cash account's balance will be overstated (too high).

The right side of a T-account is a(n):

Which of the following statements is not true:

The same four basic financial statements are prepared by both U.S. GAAP and IFRS.

The detail of individual revenue and expense accounts is reported on the statement of owner's equity.

The balance column in a ledger account is:

An owner's withdrawal account normally has a debit balance.

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

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Exam 2: Analyzing and Recording Transactions

Identify the account below that is classified as a liability in a company's chart of accounts:

If insurance coverage for the next two years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

A company's ledger is:

A balanced trial balance is proof that no errors were made in journalizing transactions, posting to the ledger, and preparing the trial balance.

Debit means increase and credit means decrease for all accounts.

Identify the account below that is classified as an asset account:

An account balance is:

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

A business uses a credit to record:

If cash was incorrectly debited for $100 instead of correctly crediting it for $100, the cash account's balance will be overstated (too high).

The right side of a T-account is a(n):

Which of the following statements is not true:

The same four basic financial statements are prepared by both U.S. GAAP and IFRS.

The detail of individual revenue and expense accounts is reported on the statement of owner's equity.

The balance column in a ledger account is:

An owner's withdrawal account normally has a debit balance.

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