Question 1

A business makes a cash payment for advertising expense. Which account is credited?

Accepted Answer

A) Cash 
B) Service revenue 
C) Accounts receivable 
D) Advertising expense 
A) Cash 
B) Service revenue 
C) Accounts receivable 
D) Advertising expense

Question 2

Which of the following accounts is an owner's equity account?

Accepted Answer

A) Accrued liability 
B) Accounts payable 
C) Prepaid expense 
D) Capital 
A) Accrued liability 
B) Accounts payable 
C) Prepaid expense 
D) Capital

Question 3

The following transactions have been journalized and posted to the proper accounts. 1. Mark Call invested $7,000 cash in his new design services business.
2. The business paid the first month's rent with $700 cash.
3. The business purchased equipment by paying $2,000 down and executing a note payable for $4,500.
4. The business purchased supplies for $850 cash.
5. The business billed its clients a total of $4,000 for design services rendered.
6. The business collected $3,000 on account from one of its clients.
What is the balance in Service revenue?

Accepted Answer

A) $1,000 
B) $3,000 
C) $4,000 
D) $3,150 
A) $1,000 
B) $3,000 
C) $4,000 
D) $3,150

Question 4

In a typical chart of accounts, liabilities appear before assets.

Accepted Answer

A) True 
 B)False

Question 5

For Capital, 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 6

A business purchases supplies for $200 on account. Please provide the journal entry (debits first, credits second.)

Accepted Answer

The answer of A business purchases supplies for $200 on...

Question 7

Journalizing 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 8

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

Question 9

A business collects cash from a customer in payment of accounts receivable. Which account is credited?

Accepted Answer

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

Question 10

A business purchases equipment for cash in the amount of $8,000. Which account is credited?

Accepted Answer

A) Cash 
B) Accounts payable 
C) Utilities expense 
D) Equipment 
A) Cash 
B) Accounts payable 
C) Utilities expense 
D) Equipment

Question 11

The accounting process of copying a transaction from the journal to the ledger is called:

Accepted Answer

A) journalizing. 
B) posting. 
C) proofing. 
D) footing. 
A) journalizing. 
B) posting. 
C) proofing. 
D) footing.

Question 12

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

Question 13

A liability account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 14

A listing of all account titles in numerical order is a(n):

Accepted Answer

A) ledger. 
B) journal. 
C) income statement. 
D) chart of accounts. 
A) ledger. 
B) journal. 
C) income statement. 
D) chart of accounts.

Question 15

Prepaid expenses are recorded as:

Accepted Answer

A) assets. 
B) liabilities. 
C) debits and credits. 
D) owner's equity. 
A) assets. 
B) liabilities. 
C) debits and credits. 
D) owner's equity.

Question 16

The drawing (withdrawals)account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 17

A journal entry includes BOTH debit and credit amounts.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following journal entries would be recorded if a business purchased $200 of supplies by paying cash?

Accepted Answer

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

Question 19

Which of the following journal entries would be recorded if a business collects $1,000 cash on account from a customer for services performed at an earlier date?

Accepted Answer

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

Question 20

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

Accepted Answer

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

Exam 2: Recording Business Transactions

A business makes a cash payment for advertising expense. Which account is credited?

Which of the following accounts is an owner's equity account?

In a typical chart of accounts, liabilities appear before assets.

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

A business purchases supplies for $200 on account. Please provide the journal entry (debits first, credits second.)

Journalizing a transaction means:

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

A business collects cash from a customer in payment of accounts receivable. Which account is credited?

A business purchases equipment for cash in the amount of $8,000. Which account is credited?

The accounting process of copying a transaction from the journal to the ledger is called:

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

A liability account is increased by a debit.

A listing of all account titles in numerical order is a(n):

Prepaid expenses are recorded as:

The drawing (withdrawals)account is increased by a debit.

A journal entry includes BOTH debit and credit amounts.

Which of the following journal entries would be recorded if a business purchased $200 of supplies by paying cash?

Which of the following journal entries would be recorded if a business collects $1,000 cash on account from a customer for services performed at an earlier date?

For Drawing, 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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