Question 1

Which of the following journal entries would be recorded if Christy Jones started a business and deposited cash of $3,000 into the business's bank account?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 3,000 & \
\hline \text {Christy Jones, Capital  } & & 3,000 \
\hline 
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts Payable } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Christy Jones, Capital } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Christy Jones, Capital } & 3,000 & \
\hline \text { Accounts Payable } & & 3,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 3,000 & \
\hline \text {Christy Jones, Capital  } & & 3,000 \
\hline 
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts Payable } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Christy Jones, Capital } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Christy Jones, Capital } & 3,000 & \
\hline \text { Accounts Payable } & & 3,000 \
\hline
\end{array}$$ A

Question 2

Liabilities are economic resources that are expected to benefit the business in the future.

Accepted Answer

A) True 
 B)False  False

Question 3

The Owner's Withdrawals account is increased by a debit.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following is a collection of all the accounts, the changes in those accounts, and their balances?

Accepted Answer

A)  source document 
B)  journal 
C)  ledger 
D)  trial balance 
A)  source document 
B)  journal 
C)  ledger 
D)  trial balance

Question 5

Sandra invests $40,000 in her new business by depositing the cash in the business's bank account. Which of the following accounts will be debited?

Accepted Answer

A)  Accounts Receivable 
B)  Cash 
C)  Sandra, Capital 
D)  Accounts Payable 
A)  Accounts Receivable 
B)  Cash 
C)  Sandra, Capital 
D)  Accounts Payable

Question 6

A business makes a payment of $1,400 on a note payable, consisting of a $200 interest payment and a $1,200 principal payment. Which of the following journal entries would be recorded?

Accepted Answer

A)  Cash is credited for $1,200; Interest Expense is credited for $200; and Notes Payable is debited for $1,400. 
B)  Notes Payable is credited for $1,200; Cash is credited for $200; and Interest Expense is debited for $1,400. 
C)  Cash is credited for $1,400; Notes payable is debited for $1,200; and Interest Expense is debited for $200. 
D)  Notes Payable is credited for $1,400; Cash is debited for $1,200; and Interest Expense is debited for $200. 
A)  Cash is credited for $1,200; Interest Expense is credited for $200; and Notes Payable is debited for $1,400. 
B)  Notes Payable is credited for $1,200; Cash is credited for $200; and Interest Expense is debited for $1,400. 
C)  Cash is credited for $1,400; Notes payable is debited for $1,200; and Interest Expense is debited for $200. 
D)  Notes Payable is credited for $1,400; Cash is debited for $1,200; and Interest Expense is debited for $200.

Question 7

A liability created when a business collects cash from customers in advance of providing services or delivering goods is called:

Accepted Answer

A)  notes receivable. 
B)  unearned revenues. 
C)  capital. 
D)  revenues. 
A)  notes receivable. 
B)  unearned revenues. 
C)  capital. 
D)  revenues.

Question 8

The Accounts Payable account is a(n) ________ account and carries a ________ normal balance.

Accepted Answer

A)  liability; debit 
B)  asset; debit 
C)  liability; credit 
D)  asset; credit 
A)  liability; debit 
B)  asset; debit 
C)  liability; credit 
D)  asset; credit

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is an asset account?

Accepted Answer

A)  Cash 
B)  Notes Payable 
C)  Owner's Withdrawals 
D)  Expenses 
A)  Cash 
B)  Notes Payable 
C)  Owner's Withdrawals 
D)  Expenses

Question 11

Grace Company has a debt ratio of 25%; this means that 75% of the assets are financed by creditors of the corporation.

Accepted Answer

A) True 
 B)False

Question 12

Carol Instruments sells musical instruments. On December 31, 2015, after its first month of business, Carol Instruments had the following balances in its accounts, listed alphabetically.
 $$\begin{array} { | l | r | } 
\hline \text { Accounts Receivable } & \$ 5,000 \
\hline \text { Accounts Payable } & 15,000 \
\hline \text { Advertising Expense } & 2,000 \
\hline \text { Building } & 16,500 \
\hline \text { Cash } & ? ? ? \
\hline \text { Carol, Capital } & 50,000 \
\hline \text { Carol, Withdrawals } & 1,200 \
\hline \text { Equipment } & 2,000 \
\hline \text { Land } & 70,000 \
\hline \text { Notes Payable } & 60,000 \
\hline \text { Salaries Expense } & 4,000 \
\hline \text { Service Revenue } & 72,000 \
\hline \text { Office Supplies } & 3,400 \
\hline \text { Utilities Expense } & 4,100 \
\hline
\end{array}$$ Determine the balance in the cash account and prepare the trial balance.

Accepted Answer

In the given problem, the Cash

Question 13

A trial balance is a list of all of the accounts of a company with their balances.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following accounts increases with a debit?

Accepted Answer

A)  Cash 
B)  Interest Payable 
C)  Accounts Payable 
D)  Smith, Capital 
A)  Cash 
B)  Interest Payable 
C)  Accounts Payable 
D)  Smith, Capital

Question 15

Which of the following statements is true of a trial balance?

Accepted Answer

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

Question 16

An account that normally has a debit balance may occasionally have a credit balance.

Accepted Answer

A) True 
 B)False

Question 17

At the end of a month, a business shows the following balances in its ledger.
   Use this data to prepare a trial balance.

Accepted Answer

None

Question 18

A business makes a cash payment to a supplier on account (for Office Supplies which were purchased earlier.) Which of the following accounts will be debited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Utilities Expense 
A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Utilities Expense

Question 19

A business pays $500 cash for office supplies. Which of the following accounts will be credited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Utilities Expense 
A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Utilities Expense

Question 20

Which of the following accounts has a normal debit balance?

Accepted Answer

A)  Revenue 
B)  Notes Payable 
C)  Cash 
D)  Accounts Payable 
A)  Revenue 
B)  Notes Payable 
C)  Cash 
D)  Accounts Payable

Exam 2: Recording Business Transactions

Which of the following journal entries would be recorded if Christy Jones started a business and deposited cash of $3,000 into the business's bank account?

Liabilities are economic resources that are expected to benefit the business in the future.

The Owner's Withdrawals account is increased by a debit.

Which of the following is a collection of all the accounts, the changes in those accounts, and their balances?

Sandra invests $40,000 in her new business by depositing the cash in the business's bank account. Which of the following accounts will be debited?

A business makes a payment of $1,400 on a note payable, consisting of a $200 interest payment and a $1,200 principal payment. Which of the following journal entries would be recorded?

A liability created when a business collects cash from customers in advance of providing services or delivering goods is called:

The Accounts Payable account is a(n) ________ account and carries a ________ normal balance.

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

Which of the following is an asset account?

Grace Company has a debt ratio of 25%; this means that 75% of the assets are financed by creditors of the corporation.

A trial balance is a list of all of the accounts of a company with their balances.

Which of the following accounts increases with a debit?

Which of the following statements is true of a trial balance?

An account that normally has a debit balance may occasionally have a credit balance.

At the end of a month, a business shows the following balances in its ledger. Use this data to prepare a trial balance.

A business makes a cash payment to a supplier on account (for Office Supplies which were purchased earlier.) Which of the following accounts will be debited?

A business pays $500 cash for office supplies. Which of the following accounts will be credited?

Which of the following accounts has a normal debit balance?

Accounting and the Business Environment

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

The Accounts Payable account is a(n) account and carries a normal balance.