Question 1

The account title used for recording the prepayment of rent for a building in the future is:

Accepted Answer

A)  prepaid rent. 
B)  rent payable. 
C)  rent revenue. 
D)  rent expense. 
A)  prepaid rent. 
B)  rent payable. 
C)  rent revenue. 
D)  rent expense.

Question 2

Withdrawals is a(n) ________ account that has a normal ________ balance.

Accepted Answer

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

Question 3

Which of the following journal entries would be recorded if a business renders service and receives cash of $900 from the customer?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Service revenue } & 900 & \
\hline \text { Cash } & & 900 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Service revenue } & 900 & \
\hline \text { Accounts payable } & & 900 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 900 & \
\hline \text { Service revenue } & & 900 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Service revenue } & 900 & \
\hline \text { Accounts receivable } & & 900 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Service revenue } & 900 & \
\hline \text { Cash } & & 900 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Service revenue } & 900 & \
\hline \text { Accounts payable } & & 900 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 900 & \
\hline \text { Service revenue } & & 900 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Service revenue } & 900 & \
\hline \text { Accounts receivable } & & 900 \
\hline
\end{array}$$

Question 4

A business makes a payment in cash for advertising expense. Which of the following accounts will be credited?

Accepted Answer

A)  Notes Payable 
B)  Accounts receivable 
C)  Cash 
D)  Advertising expense 
A)  Notes Payable 
B)  Accounts receivable 
C)  Cash 
D)  Advertising expense

Question 5

Which of the following accounts decreases with a credit?

Accepted Answer

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

Question 6

A business collects cash from a customer on settlement of accounts receivable. Which of the following accounts will be 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 7

The percentage of assets that are financed with liabilities can be calculated using the:

Accepted Answer

A)  accounting equation. 
B)  debt ratio. 
C)  journal. 
D)  ledger. 
A)  accounting equation. 
B)  debt ratio. 
C)  journal. 
D)  ledger.

Question 8

Which of the following journal entries would be recorded if a business purchased $800 of office supplies on account?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts payable } & 800 & \
\hline \text { Office Supplies } & & 800 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Office Supplies } & 800 & \
\hline \text { Accounts payable } & & 800 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Office Supplies } & 800 & \
\hline \text { Cash } & & 800 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Office Supplies } & & 800 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts payable } & 800 & \
\hline \text { Office Supplies } & & 800 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Office Supplies } & 800 & \
\hline \text { Accounts payable } & & 800 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Office Supplies } & 800 & \
\hline \text { Cash } & & 800 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Office Supplies } & & 800 \
\hline
\end{array}$$

Question 9

When is a trial balance usually prepared?

Accepted Answer

A)  after each entry is journalized 
B)  before the financial statements are prepared 
C)  after the financial statements are prepared 
D)  at the beginning of an accounting period 
A)  after each entry is journalized 
B)  before the financial statements are prepared 
C)  after the financial statements are prepared 
D)  at the beginning of an accounting period

Question 10

Which type of account is Owner's Capital?

Accepted Answer

A)  equity 
B)  asset 
C)  liability 
D)  revenue 
A)  equity 
B)  asset 
C)  liability 
D)  revenue

Question 11

The trial balance verifies the equality of debits and credits.

Accepted Answer

A) True 
 B)False

Question 12

A business repays the amount borrowed on a note payable by cash. Which of the following accounts will be debited?

Accepted Answer

A)  Cash 
B)  Bank 
C)  Notes Payable 
D)  Notes Receivable 
A)  Cash 
B)  Bank 
C)  Notes Payable 
D)  Notes Receivable

Question 13

Which of the following journal entries would be recorded if a business makes a cash payment to a supplier of $750 on account (the business had purchased office supplies on account in the previous month)?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline\text {Cash} & 750 & \
\hline \text { Accounts Payable } & & 750 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts Payable } & 750 & \
\hline \text { Cash } & & 750 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 750 & \
\hline \text {Office Supplies  } & & 750 \
\hline 
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts Payable } & 750 & \
\hline \text { Office Supplies } & & 750 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline\text {Cash} & 750 & \
\hline \text { Accounts Payable } & & 750 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts Payable } & 750 & \
\hline \text { Cash } & & 750 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 750 & \
\hline \text {Office Supplies  } & & 750 \
\hline 
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts Payable } & 750 & \
\hline \text { Office Supplies } & & 750 \
\hline
\end{array}$$

Question 14

A business collects cash from a customer on settlement of accounts receivable. Which of the following accounts will be 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 15

Source documents provide the evidence and data for accounting transactions.

Accepted Answer

A) True 
 B)False

Question 16

The trial balance is an internal document used only by employees of the company.

Accepted Answer

A) True 
 B)False

Question 17

A business renders services to a customer for $26,000 on account. Which of the following accounts will be debited?

Accepted Answer

A)  Cash 
B)  Accounts Receivable 
C)  Service Revenue 
D)  Bank 
A)  Cash 
B)  Accounts Receivable 
C)  Service Revenue 
D)  Bank

Question 18

A payment of an expense in advance is called a prepaid expense.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is true of the Owner's Capital account?

Accepted Answer

A)  It is an equity account that has a normal credit balance. 
B)  It is a liability account that has a normal credit balance. 
C)  It is a liability account that has a normal debit balance. 
D)  It is an equity account that has a normal debit balance. 
A)  It is an equity account that has a normal credit balance. 
B)  It is a liability account that has a normal credit balance. 
C)  It is a liability account that has a normal debit balance. 
D)  It is an equity account that has a normal debit balance.

Question 20

A chart of accounts is a detailed record of the changes in a particular asset, liability, or owner's equity.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

The account title used for recording the prepayment of rent for a building in the future is:

Withdrawals is a(n) ________ account that has a normal ________ balance.

Which of the following journal entries would be recorded if a business renders service and receives cash of $900 from the customer?

A business makes a payment in cash for advertising expense. Which of the following accounts will be credited?

Which of the following accounts decreases with a credit?

A business collects cash from a customer on settlement of accounts receivable. Which of the following accounts will be credited?

The percentage of assets that are financed with liabilities can be calculated using the:

Which of the following journal entries would be recorded if a business purchased $800 of office supplies on account?

When is a trial balance usually prepared?

Which type of account is Owner's Capital?

The trial balance verifies the equality of debits and credits.

A business repays the amount borrowed on a note payable by cash. Which of the following accounts will be debited?

Which of the following journal entries would be recorded if a business makes a cash payment to a supplier of $750 on account (the business had purchased office supplies on account in the previous month)?

A business collects cash from a customer on settlement of accounts receivable. Which of the following accounts will be debited?

Source documents provide the evidence and data for accounting transactions.

The trial balance is an internal document used only by employees of the company.

A business renders services to a customer for $26,000 on account. Which of the following accounts will be debited?

A payment of an expense in advance is called a prepaid expense.

Which of the following statements is true of the Owner's Capital account?

A chart of accounts is a detailed record of the changes in a particular asset, liability, or owner's equity.

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

Withdrawals is a(n) account that has a normal balance.