Question 1

A business pays cash back to the owner. Which of the following accounts will be debited?

Accepted Answer

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

Question 2

A business has the following transactions: the business is started by receiving $20,000 from the owner. The business purchases $500 of office supplies on account. The business purchases $2,000 of furniture on account. The business renders services to various clients totaling $10,000 on account. The business pays out $2,000 for salaries expense and $3,000 for Rent Expense. Business pays $500 to supplier for the office supplies purchased earlier. The business collects $3,000 from one of its clients for services rendered earlier in the month. At the end of the month, all journal entries are posted to the ledger. The Accounts Receivable account will appear as:

Accepted Answer

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

Question 3

The following transactions for the month of March have been journalized and posted to the proper accounts. Mar. I Martinez invested $\$ 9,000$ cash in his new design services business.
Mar. 2 Paid the first month 5 rent of \$800.
Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $5,000.
Mar. 4 Purchased office supplies for $\$ 750$ cash.
Mar. 5 Eilled a client for $\$ 10,000$ of design services completed.
Mar. 6 Received $8,000 on account for the services previously recorded.
-According to the above transactions. What is the ending balance in the Service Revenue account?

Accepted Answer

A)  $19,000 
B)  $9,000 
C)  $10,000 
D)  $8,000 
A)  $19,000 
B)  $9,000 
C)  $10,000 
D)  $8,000

Question 4

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

Accepted Answer

A)  owner's equity and a credit balance. 
B)  assets and a debit balance. 
C)  assets 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)  assets and a credit balance. 
D)  owner's equity and a debit balance.

Question 5

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

Accepted Answer

A)  owner's equity and a credit balance. 
B)  assets and a debit balance. 
C)  assets 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)  assets and a credit balance. 
D)  owner's equity and a debit balance.

Question 6

The Salaries Payable account is a(n):

Accepted Answer

A)  liability account with a normal debit balance. 
B)  asset account with a normal debit balance. 
C)  liability account with a normal credit balance. 
D)  asset account with a normal credit balance. 
A)  liability account with a normal debit balance. 
B)  asset account with a normal debit balance. 
C)  liability account with a normal credit balance. 
D)  asset account with a normal credit balance.

Question 7

An accounting entry that is characterized by having multiple debits and/or multiple credits is called a ________ entry.

Accepted Answer

A)  balanced 
B)  posted 
C)  chart of accounts 
D)  compound journal 
A)  balanced 
B)  posted 
C)  chart of accounts 
D)  compound journal

Question 8

________ represents a debt owed for renting a building currently.

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 9

A business purchased $3,500 of office supplies for cash. Which of the following sets of ledger accounts reflect the posting of this transaction?

Accepted Answer

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

Question 10

A payable involves a future receipt of cash.

Accepted Answer

A) True 
 B)False

Question 11

Debit refers to the right side of the T-account and credit refers to the left side.

Accepted Answer

A) True 
 B)False

Question 12

A business makes a cash payment of $12,000 to a creditor. Which of the following accounts will be credited?

Accepted Answer

A)  Cash 
B)  Accounts payable 
C)  Bank 
D)  Accounts receivable 
A)  Cash 
B)  Accounts payable 
C)  Bank 
D)  Accounts receivable

Question 13

Which of the following factors is assessed using the debt ratio?

Accepted Answer

A)  expenses 
B)  revenues 
C)  risk 
D)  income 
A)  expenses 
B)  revenues 
C)  risk 
D)  income

Question 14

The trial balance summarizes the balances of assets, liabilities, and equity.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is true of revenue?

Accepted Answer

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

Question 16

When a business records revenue earned, the Revenue account is credited.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a financial statement that presents a business's accounting equation?

Accepted Answer

A)  chart of accounts 
B)  trial balance 
C)  income statement 
D)  balance sheet 
A)  chart of accounts 
B)  trial balance 
C)  income statement 
D)  balance sheet

Question 18

A business borrows cash by signing a note payable. Which of the following accounts will be credited?

Accepted Answer

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

Question 19

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 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

The balances in the accounts of liabilities and revenues are increased with a credit.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

A business pays cash back to the owner. Which of the following accounts will be debited?

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

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

The Salaries Payable account is a(n):

An accounting entry that is characterized by having multiple debits and/or multiple credits is called a ________ entry.

________ represents a debt owed for renting a building currently.

A business purchased $3,500 of office supplies for cash. Which of the following sets of ledger accounts reflect the posting of this transaction?

A payable involves a future receipt of cash.

Debit refers to the right side of the T-account and credit refers to the left side.

A business makes a cash payment of $12,000 to a creditor. Which of the following accounts will be credited?

Which of the following factors is assessed using the debt ratio?

The trial balance summarizes the balances of assets, liabilities, and equity.

Which of the following statements is true of revenue?

When a business records revenue earned, the Revenue account is credited.

Which of the following is a financial statement that presents a business's accounting equation?

A business borrows cash by signing a note payable. Which of the following accounts will be credited?

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 credited?

The balances in the accounts of liabilities and revenues are increased with a credit.

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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