Question 1

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 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  journalizing. 
B)  posting. 
C)  compounding. 
D)  sourcing. 
A)  journalizing. 
B)  posting. 
C)  compounding. 
D)  sourcing.

Question 4

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

Accepted Answer

A)  liabilities and a debit balance. 
B)  assets and a debit balance. 
C)  liabilities and a credit balance. 
D)  assets and a credit balance. 
A)  liabilities and a debit balance. 
B)  assets and a debit balance. 
C)  liabilities and a credit balance. 
D)  assets and a credit balance.

Question 5

An amount owed but not paid is called a(n):

Accepted Answer

A)  prepaid expense. 
B)  adjusted liability. 
C)  accrued liability. 
D)  note receivable. 
A)  prepaid expense. 
B)  adjusted liability. 
C)  accrued liability. 
D)  note receivable.

Question 6

Which of the following groups of accounts normally have a credit balance?

Accepted Answer

A)  assets and liabilities 
B)  capital and assets 
C)  liabilities and owner's equity 
D)  assets and expenses 
A)  assets and liabilities 
B)  capital and assets 
C)  liabilities and owner's equity 
D)  assets and expenses

Question 7

Which of the following is a liability account?

Accepted Answer

A)  Service Revenue 
B)  Building 
C)  Accounts Receivable 
D)  Unearned Revenue 
A)  Service Revenue 
B)  Building 
C)  Accounts Receivable 
D)  Unearned Revenue

Question 8

Unearned revenue is a liability account.

Accepted Answer

A) True 
 B)False

Question 9

The following are the current month's balances for Toys Galore: $$\begin{array} { | l | r | } 
\hline \text { Accounts Payable } & \$ 8,000 \
\hline \text { Revenue } & 10,000 \
\hline \text { Cash } & 5,000 \
\hline \text { Expenses } & 1,750 \
\hline \text { Fumiture } & 12,000 \
\hline \text { Accounts Receivable } & 14,000 \
\hline \text { Tones, Capital } & 8,250 \
\hline \text { Notes Payable } & 6,500 \
\hline
\end{array}$$ Calculate the total amount of credits for the trial balance.

Accepted Answer

A)  $24,500 
B)  $22,750 
C)  $24,750 
D)  $32,750 
A)  $24,500 
B)  $22,750 
C)  $24,750 
D)  $32,750

Question 10

A business paid salaries of $6,000 in cash. Provide the journal entry (debits first, credits second.)

Accepted Answer

None

Question 11

The normal balance of an account is the increase side of the account.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

The ability of a company to repay its liabilities can be determined from its:

Accepted Answer

A)  bankers. 
B)  creditors. 
C)  debt ratio. 
D)  journal. 
A)  bankers. 
B)  creditors. 
C)  debt ratio. 
D)  journal.

Question 14

A journal entry for a $250 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $520 and a credit to Cash for $250. Which of the following statements correctly states the effect of the error on the trial balance?

Accepted Answer

A)  The sum of the credits will exceed the sum of the debits by $270. 
B)  The sum of the debits will exceed the sum of the credits by $250. 
C)  The sum of the debits will exceed the sum of the credits by $270. 
D)  The sum of the debits will exceed the sum of the credits by $520. 
A)  The sum of the credits will exceed the sum of the debits by $270. 
B)  The sum of the debits will exceed the sum of the credits by $250. 
C)  The sum of the debits will exceed the sum of the credits by $270. 
D)  The sum of the debits will exceed the sum of the credits by $520.

Question 15

Which of the following is an asset account?

Accepted Answer

A)  Salaries Expense 
B)  Accounts Payable 
C)  Service Revenue 
D)  Prepaid Expense 
A)  Salaries Expense 
B)  Accounts Payable 
C)  Service Revenue 
D)  Prepaid Expense

Question 16

A shortened form of an account in the ledger is called a:

Accepted Answer

A)  trial balance. 
B)  balance sheet. 
C)  chart of accounts. 
D)  T-account. 
A)  trial balance. 
B)  balance sheet. 
C)  chart of accounts. 
D)  T-account.

Question 17

A business renders services to a client and issues a sales invoice. The amount will be collected from the customer at a later time. Which of the following would be true at the time the invoice is issued?

Accepted Answer

A)  Owner's equity will decrease. 
B)  Total liabilities will increase. 
C)  Total assets will decrease. 
D)  Net income will increase. 
A)  Owner's equity will decrease. 
B)  Total liabilities will increase. 
C)  Total assets will decrease. 
D)  Net income will increase.

Question 18

When a business makes a cash payment, the Cash account is debited.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is the fifth and last step in the journalizing and posting process?

Accepted Answer

A)  posting the accounts to the ledger 
B)  identifying each account affected and its type 
C)  determining whether the accounting equation is in balance 
D)  determining whether each account has increased or decreased 
A)  posting the accounts to the ledger 
B)  identifying each account affected and its type 
C)  determining whether the accounting equation is in balance 
D)  determining whether each account has increased or decreased

Question 20

The earnings that result from delivering goods or services to customers are called:

Accepted Answer

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

Exam 2: Recording Business Transactions

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

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

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

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

An amount owed but not paid is called a(n):

Which of the following groups of accounts normally have a credit balance?

Which of the following is a liability account?

Unearned revenue is a liability account.

The following are the current month's balances for Toys Galore: Accounts Payable \ 8,000 Revenue 10,000 Cash 5,000 Expenses 1,750 Fumiture 12,000 Accounts Receivable 14,000 Tones, Capital 8,250 Notes Payable 6,500 Calculate the total amount of credits for the trial balance.

A business paid salaries of $6,000 in cash. Provide the journal entry (debits first, credits second.)

The normal balance of an account is the increase side of the account.

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

The ability of a company to repay its liabilities can be determined from its:

A journal entry for a $250 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $520 and a credit to Cash for $250. Which of the following statements correctly states the effect of the error on the trial balance?

Which of the following is an asset account?

A shortened form of an account in the ledger is called a:

A business renders services to a client and issues a sales invoice. The amount will be collected from the customer at a later time. Which of the following would be true at the time the invoice is issued?

When a business makes a cash payment, the Cash account is debited.

Which of the following is the fifth and last step in the journalizing and posting process?

The earnings that result from delivering goods or services to customers are called:

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

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