Question 1

Which of the following journal entries would be recorded if a business purchased equipment for $3,000 cash?

Accepted Answer

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

Question 2

When a business collects cash, the cash account is always debited.

Accepted Answer

A) True 
 B)False

Question 3

A business makes a payment of $1,200 on a note payable, consisting of a $200 interest payment and a $1,000 principal payment. Which of the following journal entries would be recorded?

Accepted Answer

A) Cash is credited for $1,000; Interest expense is credited for $200; and Notes payable is debited for $1,200. 
B) Notes payable is credited for $1,000; Cash is credited for $200; and Interest expense is debited for $1,200. 
C) Cash is credited for $1,200; Notes payable is debited for $1,000; and Interest expense is debited for $200. 
D) Notes payable is credited for $1,200; Cash is debited for $1,000; and Interest expense is debited for $200. 
A) Cash is credited for $1,000; Interest expense is credited for $200; and Notes payable is debited for $1,200. 
B) Notes payable is credited for $1,000; Cash is credited for $200; and Interest expense is debited for $1,200. 
C) Cash is credited for $1,200; Notes payable is debited for $1,000; and Interest expense is debited for $200. 
D) Notes payable is credited for $1,200; Cash is debited for $1,000; and Interest expense is debited for $200.

Question 4

The following entries were made by the accountant of Patel Pastries during its first month of operation. 1. James Patel, the owner, deposited $3,000 in the business's new checking account.
2. Patel Pastries paid the first month's rent of $400 in cash.
3. Patel Pastries purchased equipment by signing a note payable of $11,000.
4. Cash sales for the month were $4,500.
5. Patel Pastries purchased cooking supplies for $1,400 cash.
After the accountant posts these entries to the general ledger, how much are total assets?

Accepted Answer

A) $16,700 
B) $18,100 
C) $7,100 
D) $6,100 
A) $16,700 
B) $18,100 
C) $7,100 
D) $6,100

Question 5

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

Accepted Answer

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

Question 6

Which of the following accounts increases with a debit?

Accepted Answer

A) Cash 
B) Interest payable 
C) Accounts payable 
D) Capital 
A) Cash 
B) Interest payable 
C) Accounts payable 
D) Capital

Question 7

For Supplies, 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 8

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 total amount of assets after all the above transactions have been completed?

Accepted Answer

A) $7,800 
B) $13,800 
C) $12,800 
D) $14,800 
A) $7,800 
B) $13,800 
C) $12,800 
D) $14,800

Question 9

The following are the ending month's balances for Toys Galore.   What is the total amount of debits 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 10

A company received $75,000 from a customer "on account." The journal entry would be to:

Accepted Answer

A) debit Accounts receivable and credit Sales revenue. 
B) debit Accounts receivable and credit Cash. 
C) debit Cash and credit Accounts receivable. 
D) debit Sales revenue and credit Accounts receivable. 
A) debit Accounts receivable and credit Sales revenue. 
B) debit Accounts receivable and credit Cash. 
C) debit Cash and credit Accounts receivable. 
D) debit Sales revenue and credit Accounts receivable.

Question 11

A business purchased a building by paying part of the purchase price in cash as a down payment and signing a mortgage note for the remainder. The business should:

Accepted Answer

A) debit the mortgage note payable for the amount of the mortgage. 
B) debit the building account for the amount of the mortgage. 
C) debit cash for the amount paid on the down payment. 
D) credit the mortgage note payable for the amount of the mortgage. 
A) debit the mortgage note payable for the amount of the mortgage. 
B) debit the building account for the amount of the mortgage. 
C) debit cash for the amount paid on the down payment. 
D) credit the mortgage note payable for the amount of the mortgage.

Question 12

Both the date of the transaction and a brief description are included in a journal entry.

Accepted Answer

A) True 
 B)False

Question 13

At the end of the month, the business owner takes a withdrawal of $10,000. Please provide the journal entry (debits first, credits second.)

Accepted Answer

The answer of At the end of the month, the...

Question 14

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

Accepted Answer

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

Question 15

The following transactions have been journalized and posted to the proper accounts. Prepare a trial balance in good form.
a. Edward Wilson invested $8,000 cash in his new landscaping business.
b. The business paid the first month's rent with $300 cash.
c. The business purchased equipment by paying $2,000 cash and executing a note payable for $3,000.
d. The business purchased supplies for $200 cash.
e. The business billed clients for a total of $1,000 for design services rendered.
f. The business received $750 cash from clients for services rendered above.
g. The owner took a withdrawal of $2,000.

Accepted Answer

The answer of The following transactions have been journalized and...

Question 16

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

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 17

Which of the following accounts increases with a credit?

Accepted Answer

A) Cash 
B) Capital 
C) Accounts receivable 
D) Prepaid expenses 
A) Cash 
B) Capital 
C) Accounts receivable 
D) Prepaid expenses

Question 18

Which of the following statements about expenses is CORRECT?

Accepted Answer

A) Expenses increase owner's equity, so an expense account's normal balance is a credit balance. 
B) Expenses decrease owner's equity, so an expense account's normal balance is a credit balance. 
C) Expenses increase owner's equity, so an expense account's normal balance is a debit balance. 
D) Expenses decrease owner's equity, so an expense account's normal balance is a debit balance. 
A) Expenses increase owner's equity, so an expense account's normal balance is a credit balance. 
B) Expenses decrease owner's equity, so an expense account's normal balance is a credit balance. 
C) Expenses increase owner's equity, so an expense account's normal balance is a debit balance. 
D) Expenses decrease owner's equity, so an expense account's normal balance is a debit balance.

Question 19

Which of the following is the order of steps to journalize an entry?

Accepted Answer

A) Identify each account affected, determine increase or decrease in each account, record the transaction. 
B) Identify each account affected, record the transaction, determine increase or decrease in each account. 
C) Record the transaction, identify each account affected, determine increase or decrease in each account. 
D) Determine increase or decrease in each account, identify each account affected, record the transaction. 
A) Identify each account affected, determine increase or decrease in each account, record the transaction. 
B) Identify each account affected, record the transaction, determine increase or decrease in each account. 
C) Record the transaction, identify each account affected, determine increase or decrease in each account. 
D) Determine increase or decrease in each account, identify each account affected, record the transaction.

Question 20

In a previous month, the business rendered services of $5,000 to a client on account. Now the business receives $5,000 cash from the client. Please provide the journal entry (debits first, credits second.)

Accepted Answer

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

Exam 2: Recording Business Transactions

Which of the following journal entries would be recorded if a business purchased equipment for $3,000 cash?

When a business collects cash, the cash account is always debited.

A business makes a payment of $1,200 on a note payable, consisting of a $200 interest payment and a $1,000 principal payment. Which of the following journal entries would be recorded?

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

Which of the following accounts increases with a debit?

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

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

A company received $75,000 from a customer "on account." The journal entry would be to:

A business purchased a building by paying part of the purchase price in cash as a down payment and signing a mortgage note for the remainder. The business should:

Both the date of the transaction and a brief description are included in a journal entry.

At the end of the month, the business owner takes a withdrawal of $10,000. Please provide the journal entry (debits first, credits second.)

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

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

Which of the following accounts increases with a credit?

Which of the following statements about expenses is CORRECT?

Which of the following is the order of steps to journalize an entry?

In a previous month, the business rendered services of $5,000 to a client on account. Now the business receives $5,000 cash from the client. Please provide the journal entry (debits first, credits second.)

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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