Question 1

When a business records an expense incurred,the expense account is always credited.

Accepted Answer

A) True 
 B)False

Question 2

A business makes a payment of $1440 on a loan payable,consisting of a $110 interest payment and a $1330 principal payment.Which of the following journal entries would be recorded?

Accepted Answer

A) Loan payable is credited for $1330,Cash is credited for $110 and Interest expense is debited for $1440. 
B) Cash is credited for $1440,Loan payable is debited for $1330 and Interest expense is debited for $110. 
C) Loan payable is credited for $1440,Cash is debited for $1330 and Interest expense is debited for $110. 
D) Cash is credited for $1330,Interest expense is credited for $110 and Loan payable is debited for $1440. 
A) Loan payable is credited for $1330,Cash is credited for $110 and Interest expense is debited for $1440. 
B) Cash is credited for $1440,Loan payable is debited for $1330 and Interest expense is debited for $110. 
C) Loan payable is credited for $1440,Cash is debited for $1330 and Interest expense is debited for $110. 
D) Cash is credited for $1330,Interest expense is credited for $110 and Loan payable is debited for $1440.

Question 3

When recording a transaction in a journal,the credit side is entered first,followed by the debit side.

Accepted Answer

A) True 
 B)False

Question 4

The following are the current month's balances for Toys Galore,before preparing the trial balance. $$\begin{array} { | l | l | } 
\hline \text { Accounts payable } & \$ 8000 \
\hline \text { Revenue } & 5000 \
\hline \text { Cash } & 5000 \
\hline \text { Expenses } & 17,500 \
\hline \text { Furniture } & 10,000 \
\hline \text { Accounts receivable } & 14,000 \
\hline \text { Iones, capital } & \
\hline \text { Loan payable } & 5500 \
\hline
\end{array}$$ What amount should be shown for Jones,capital on the trial balance?

Accepted Answer

A) $30,000 
B) $52,000 
C) $28,000 
D) $14,500 
A) $30,000 
B) $52,000 
C) $28,000 
D) $14,500

Question 5

Which of the following journal entries would be recorded if Jane Brown started a business and then deposited cash of $6 000 into the business bank account?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Tane Brown, capital } & 6000 & \
\hline \text { Cash } & & 6000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Tane Brown, capital } & 6000 & \
\hline \text { Accounts payable } & & 6000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 6000 & \
\hline \text { Cash } & & 6000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 6000 & \
\hline \text { Jane Brown, capital } & & 6000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Tane Brown, capital } & 6000 & \
\hline \text { Cash } & & 6000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Tane Brown, capital } & 6000 & \
\hline \text { Accounts payable } & & 6000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 6000 & \
\hline \text { Cash } & & 6000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 6000 & \
\hline \text { Jane Brown, capital } & & 6000 \
\hline
\end{array}$$

Question 6

A trial balance is the list of all of a company's accounts along with their account numbers.

Accepted Answer

A) True 
 B)False

Question 7

When is a trial balance usually prepared?

Accepted Answer

A) After financial statements are published 
B) After balancing the ledger accounts 
C) After each entry is journalised 
D) At the beginning of an accounting period 
A) After financial statements are published 
B) After balancing the ledger accounts 
C) After each entry is journalised 
D) At the beginning of an accounting period

Question 8

A business pays cash back to the owner.Which account is credited?

Accepted Answer

A) Service revenue 
B) Drawings 
C) Accounts payable 
D) Cash 
A) Service revenue 
B) Drawings 
C) Accounts payable 
D) Cash

Question 9

The following transactions for the month of March have been journalised and posted to the proper accounts.

Mar 1 Martinez invested $9000 cash in his new design services business.
Mar 2 Paid the first month's rent of $900.
Mar 3 Purchased equipment by paying $4000 cash and executing a loan payable for $9000.
Mar 4 Purchased office supplies for $750 cash.
Mar 5 Billed a client for $8000 of design services completed.
Mar 6 Received $7900 on account for the services previously recorded.
What is the balance in Cash?

Accepted Answer

A) $12,900 
B) $11,250 
C) $12,150 
D) $15,250 
A) $12,900 
B) $11,250 
C) $12,150 
D) $15,250

Question 10

A business pays $500 cash for supplies.Which account is debited?

Accepted Answer

A) Service revenue 
B) Cash 
C) Accounts payable 
D) Supplies 
A) Service revenue 
B) Cash 
C) Accounts payable 
D) Supplies

Question 11

Which of the following is NOT an example of a source document?

Accepted Answer

A) Bank deposit slip 
B) Purchase invoice 
C) Journal 
D) Sales invoice 
A) Bank deposit slip 
B) Purchase invoice 
C) Journal 
D) Sales invoice

Question 12

For liabilities and revenues,a debit increases the account.

Accepted Answer

A) True 
 B)False

Question 13

The following transactions for the month of March have been journalised and posted to the proper accounts.

Mar 1 Martinez invested $7000 cash in his new design services business.
Mar 2 Paid the first month's rent of $600.
Mar 3 Purchased equipment by paying $3000 cash and executing a loan payable for $3000.
Mar 4 Purchased office supplies for $550 cash.
Mar 5 Billed a client for $10,000 of design services completed.
Mar 6 Received $8000 on account for the services previously recorded.
What is the balance in Accounts receivable?

Accepted Answer

A) $2000 
B) $10,000 
C) $3000 
D) $8000 
A) $2000 
B) $10,000 
C) $3000 
D) $8000

Question 14

For Revenues,the category of account and its normal balance are:

Accepted Answer

A) Assets and a debit balance. 
B) Liabilities and a credit balance. 
C) Owners' equity and a debit balance. 
D) Owners' equity and a credit balance. 
A) Assets and a debit balance. 
B) Liabilities and a credit balance. 
C) Owners' equity and a debit balance. 
D) Owners' equity and a credit balance.

Question 15

Which of the following accounts is a liability?

Accepted Answer

A) Accounts payable 
B) Prepaid expenses 
C) Service revenue 
D) Salary expense 
A) Accounts payable 
B) Prepaid expenses 
C) Service revenue 
D) Salary expense

Question 16

Which of the following accounts is an example of an owners' equity account?

Accepted Answer

A) Cash 
B) Equipment 
C) Drawings 
D) Accounts payable 
A) Cash 
B) Equipment 
C) Drawings 
D) Accounts payable

Question 17

Which of the following journal entries would be recorded if a business purchased $200 in supplies on credit?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 200 & \
\hline \text { Supplies } & & 200 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Supplies } & 200 & \
\hline \text { Cash } & & 200 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 200 & \
\hline \text { Supplies } & & 200 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Supplies } & 200 & \
\hline \text { Accounts payable } & & 200 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 200 & \
\hline \text { Supplies } & & 200 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Supplies } & 200 & \
\hline \text { Cash } & & 200 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 200 & \
\hline \text { Supplies } & & 200 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Supplies } & 200 & \
\hline \text { Accounts payable } & & 200 \
\hline
\end{array}$$

Question 18

Which of the following statements CORRECTLY describes a trial balance?

Accepted Answer

A) A trial balance is the first step in the accounting cycle. 
B) A trial balance is a list of all accounts with their balances. 
C) A trial balance is also known as a balance sheet. 
D) A trial balance is also known as the chart of accounts. 
A) A trial balance is the first step in the accounting cycle. 
B) A trial balance is a list of all accounts with their balances. 
C) A trial balance is also known as a balance sheet. 
D) A trial balance is also known as the chart of accounts.

Question 19

A business buys $500 in supplies on credit.Which account is credited?

Accepted Answer

A) Service revenue 
B) Cash 
C) Supplies 
D) Accounts payable 
A) Service revenue 
B) Cash 
C) Supplies 
D) Accounts payable

Question 20

The first step of journalising an entry is to:

Accepted Answer

A) identify the transaction from source documents. 
B) post the accounts to the ledger. 
C) determine whether each account is increased or decreased. 
D) record the transaction in the journal,including a brief explanation. 
A) identify the transaction from source documents. 
B) post the accounts to the ledger. 
C) determine whether each account is increased or decreased. 
D) record the transaction in the journal,including a brief explanation.

When a business records an expense incurred,the expense account is always credited.

A business makes a payment of $1440 on a loan payable,consisting of a $110 interest payment and a $1330 principal payment.Which of the following journal entries would be recorded?

When recording a transaction in a journal,the credit side is entered first,followed by the debit side.

Which of the following journal entries would be recorded if Jane Brown started a business and then deposited cash of $6 000 into the business bank account?

A trial balance is the list of all of a company's accounts along with their account numbers.

When is a trial balance usually prepared?

A business pays cash back to the owner.Which account is credited?

A business pays $500 cash for supplies.Which account is debited?

Which of the following is NOT an example of a source document?

For liabilities and revenues,a debit increases the account.

For Revenues,the category of account and its normal balance are:

Which of the following accounts is a liability?

Which of the following accounts is an example of an owners' equity account?

Which of the following journal entries would be recorded if a business purchased $200 in supplies on credit?

Which of the following statements CORRECTLY describes a trial balance?

A business buys $500 in supplies on credit.Which account is credited?

The first step of journalising an entry is to:

The Role of Accounting in Decision Making

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters

Exam 2: Recording Business Transactions

When a business records an expense incurred,the expense account is always credited.

A business makes a payment of $1440 on a loan payable,consisting of a $110 interest payment and a $1330 principal payment.Which of the following journal entries would be recorded?

When recording a transaction in a journal,the credit side is entered first,followed by the debit side.

Which of the following journal entries would be recorded if Jane Brown started a business and then deposited cash of $6 000 into the business bank account?

A trial balance is the list of all of a company's accounts along with their account numbers.

When is a trial balance usually prepared?

A business pays cash back to the owner.Which account is credited?

A business pays $500 cash for supplies.Which account is debited?

Which of the following is NOT an example of a source document?

For liabilities and revenues,a debit increases the account.

For Revenues,the category of account and its normal balance are:

Which of the following accounts is a liability?

Which of the following accounts is an example of an owners' equity account?

Which of the following journal entries would be recorded if a business purchased $200 in supplies on credit?

Which of the following statements CORRECTLY describes a trial balance?

A business buys $500 in supplies on credit.Which account is credited?

The first step of journalising an entry is to:

The Role of Accounting in Decision Making

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters