Question 1

The normal sequence of information flow in an accounting system is:

Accepted Answer

A) ledger, journal, source document. 
B) journal, source document, ledger. 
C) source document, journal, ledger. 
D) source document, ledger, journal. 
A) ledger, journal, source document. 
B) journal, source document, ledger. 
C) source document, journal, ledger. 
D) source document, ledger, journal.

Question 2

Posting a transaction means:

Accepted Answer

A) calculating the balance in an account. 
B) finding the account number in the chart of accounts. 
C) recording the transaction including a brief explanation. 
D) copying the information from the journal to the ledger. 
A) calculating the balance in an account. 
B) finding the account number in the chart of accounts. 
C) recording the transaction including a brief explanation. 
D) copying the information from the journal to the ledger.

Question 3

Which of the following journal entries would be recorded if a business purchases equipment for $2,500 cash and supplies for $450 cash?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 4

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

Accepted Answer

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

Question 5

The balance of an account is the:

Accepted Answer

A) amount remaining in an account. 
B) account number, as shown in the chart of accounts. 
C) sum of the debits only. 
D) sum of the credits only. 
A) amount remaining in an account. 
B) account number, as shown in the chart of accounts. 
C) sum of the debits only. 
D) sum of the credits only.

Question 6

Which of the following accounts is NOT an example of a liability?

Accepted Answer

A) Wages payable 
B) Notes payable 
C) Accounts payable 
D) Accounts receivable 
A) Wages payable 
B) Notes payable 
C) Accounts payable 
D) Accounts receivable

Question 7

Which of the following accounts decreases with a debit?

Accepted Answer

A) Notes payable 
B) Prepaid insurance 
C) Cash 
D) Land 
A) Notes payable 
B) Prepaid insurance 
C) Cash 
D) Land

Question 8

The process of copying from the journal to the ledger is called posting.

Accepted Answer

A) True 
 B)False

Question 9

In a previous month, the business purchased supplies for $800 on account. Now the business makes a cash payment of $800 to the supplier. Please provide the journal entry (debits first, credits second.)

Accepted Answer

The answer of In a previous month, the business purchased...

Question 10

The trial balance is generally used only inside the business and is not published with the other financial statements.

Accepted Answer

A) True 
 B)False

Question 11

The following are the ending month's balances for Toys Galore.   What is the total amount of credits for the trial balance?

Accepted Answer

A) $21,630 
B) $16,400 
C) $20,580 
D) $30,310 
A) $21,630 
B) $16,400 
C) $20,580 
D) $30,310

Question 12

A business renders services to a customer for $16,000 on account. Which account is credited?

Accepted Answer

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

Question 13

Which of the following statements is TRUE?

Accepted Answer

A) A trial balance is in the same format as a balance sheet. 
B) A trial balance presents data in debit and credit format, but a balance sheet does not. 
C) A trial balance shows total amounts for assets, liabilities, and equity. 
D) A trial balance is created after the balance sheet is prepared. 
A) A trial balance is in the same format as a balance sheet. 
B) A trial balance presents data in debit and credit format, but a balance sheet does not. 
C) A trial balance shows total amounts for assets, liabilities, and equity. 
D) A trial balance is created after the balance sheet is prepared.

Question 14

When is a trial balance usually prepared?

Accepted Answer

A) After each entry is journalized 
B) Before financial statements are prepared 
C) After financial statements are published 
D) At the beginning of an accounting period 
A) After each entry is journalized 
B) Before financial statements are prepared 
C) After financial statements are published 
D) At the beginning of an accounting period

Question 15

An account is the detailed record of the changes in a particular asset, liability, or owner's equity.

Accepted Answer

A) True 
 B)False

Question 16

For liabilities and revenues, a debit increases the account.

Accepted Answer

A) True 
 B)False

Question 17

In a trial balance, total debits are always equal to total credits.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following journal entries would be recorded if a business makes a cash payment to a supplier of $600 "on account" (the business had purchased supplies on account in the previous month)?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 19

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

Accepted Answer

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

Question 20

A business has the following transactions: the business is started by receiving $20,000 from the owner. The business purchases $500 of supplies on account. The business purchases $2,000 of furniture on account. The business renders services to various clients totaling $9,000 on account. The business pays out $2,000 for Salary expense and $3,000 for Rent expense. Business pays $500 to supplier for the supplies purchased earlier. The business collects $1,500 from one of its clients for services rendered earlier in the month. At the end of the month, all journal entries are posted to the ledger. The Accounts receivable account will appear as follows:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Exam 2: Recording Business Transactions

The normal sequence of information flow in an accounting system is:

Posting a transaction means:

Which of the following journal entries would be recorded if a business purchases equipment for $2,500 cash and supplies for $450 cash?

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

The balance of an account is the:

Which of the following accounts is NOT an example of a liability?

Which of the following accounts decreases with a debit?

The process of copying from the journal to the ledger is called posting.

In a previous month, the business purchased supplies for $800 on account. Now the business makes a cash payment of $800 to the supplier. Please provide the journal entry (debits first, credits second.)

The trial balance is generally used only inside the business and is not published with the other financial statements.

The following are the ending month's balances for Toys Galore. What is the total amount of credits for the trial balance?

A business renders services to a customer for $16,000 on account. Which account is credited?

Which of the following statements is TRUE?

When is a trial balance usually prepared?

An account is the detailed record of the changes in a particular asset, liability, or owner's equity.

For liabilities and revenues, a debit increases the account.

In a trial balance, total debits are always equal to total credits.

Which of the following journal entries would be recorded if a business makes a cash payment to a supplier of $600 "on account" (the business had purchased supplies on account in the previous month)?

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

Accounting and the Business Environment

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, Bonds Payable, and Classification of Liabilities on the Balance Sheet

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

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