Question 1

Purchasing supplies and paying cash for them would:

Accepted Answer

A)  increase total assets 
B)  decrease total assets 
C)  have no effect on total assets 
D)  increase total liabilities and shareholders' equity 
A)  increase total assets 
B)  decrease total assets 
C)  have no effect on total assets 
D)  increase total liabilities and shareholders' equity C

Question 2

Fox Ltd. had the following trial balance on October 31, 2014.
   The following errors caused the trial balance not to balance:
a. Recorded a $2,000 debit to Note Payable as a debit to Note Receivable.
b. Posted a $3,000 credit to Accounts Payable as $300.
c. Recorded a cash revenue transaction by debiting Cash for $6,000 and crediting Accounts Receivable for $6,000.
d. The Common Shares account is understated by $11,100.
Prepare a corrected trial balance as of October 31, 2014. All accounts have a normal balance.

Accepted Answer

@#IMG-DLM&_TB4002_00

Question 3

Which of the following statements regarding a trial balance is false?

Accepted Answer

A)  A trial balance may be taken at any time the postings are up to date. 
B)  A trial balance is a list of all accounts with their balances. 
C)  A trial balance is the same as a balance sheet. 
D)  A trial balance provides a check on the equality of debits and credits. 
A)  A trial balance may be taken at any time the postings are up to date. 
B)  A trial balance is a list of all accounts with their balances. 
C)  A trial balance is the same as a balance sheet. 
D)  A trial balance provides a check on the equality of debits and credits. C

Question 4

The purchase of office equipment on account would increase an asset and decrease a liability account.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following items would not be included in the journal entry for a transaction?

Accepted Answer

A)  the names of the source documents used to record the accounting transaction 
B)  the titles of the accounts that will be used as debits and credits in the transaction 
C)  the date the accounting transaction was entered into the accounting system 
D)  the dollar amounts used to record the debits and credits in the transaction 
A)  the names of the source documents used to record the accounting transaction 
B)  the titles of the accounts that will be used as debits and credits in the transaction 
C)  the date the accounting transaction was entered into the accounting system 
D)  the dollar amounts used to record the debits and credits in the transaction

Question 6

What type of account is Prepaid Rent?

Accepted Answer

A)  a liability 
B)  an expense 
C)  shareholders' equity 
D)  an asset 
A)  a liability 
B)  an expense 
C)  shareholders' equity 
D)  an asset

Question 7

An owner makes an investment of cash into the business. Such a transaction would include a:

Accepted Answer

A)  debit to Common shares 
B)  credit to Cash 
C)  debit to Cash 
D)  debit to Accounts Receivable 
A)  debit to Common shares 
B)  credit to Cash 
C)  debit to Cash 
D)  debit to Accounts Receivable

Question 8

Which of the following statements regarding accounts is false?

Accepted Answer

A)  An asset is increased by a debit and decreased by a credit. 
B)  Revenue is increased by a debit and an expense is increased by a credit. 
C)  A liability is decreased by a debit and increased by a credit. 
D)  Revenue is increased by a credit and an expense is increased by a debit. 
A)  An asset is increased by a debit and decreased by a credit. 
B)  Revenue is increased by a debit and an expense is increased by a credit. 
C)  A liability is decreased by a debit and increased by a credit. 
D)  Revenue is increased by a credit and an expense is increased by a debit.

Question 9

The left side of a T-account is always the side that increases the balance of the account.

Accepted Answer

A) True 
 B)False

Question 10

A trial balance is:

Accepted Answer

A)  prepared before the posting process is completed 
B)  a list of income statement accounts with their balances 
C)  a list of balance sheet accounts with their balances 
D)  a list of all accounts with their balances 
A)  prepared before the posting process is completed 
B)  a list of income statement accounts with their balances 
C)  a list of balance sheet accounts with their balances 
D)  a list of all accounts with their balances

Question 11

A trial balance is a useful device because it provides a check on accuracy by showing whether:

Accepted Answer

A)  total assets equal total liabilities 
B)  total debits equal total credits 
C)  total revenues plus gains equal total expenses plus losses 
D)  total of all the income statement accounts equals the total of all the balance sheet accounts 
A)  total assets equal total liabilities 
B)  total debits equal total credits 
C)  total revenues plus gains equal total expenses plus losses 
D)  total of all the income statement accounts equals the total of all the balance sheet accounts

Question 12

An owner investment of a building, valued at $100,000 with an $80,000 outstanding mortgage, transferring this asset into the business would:

Accepted Answer

A)  increase assets by $20,000 
B)  increase assets by $80,000 
C)  increase shareholders' equity by $20,000 
D)  increase shareholders' equity by $100,000 
A)  increase assets by $20,000 
B)  increase assets by $80,000 
C)  increase shareholders' equity by $20,000 
D)  increase shareholders' equity by $100,000

Question 13

A credit always decreases an asset account.

Accepted Answer

A) True 
 B)False

Question 14

The account called Accrued Liabilities is really an expense account and not a liability account.

Accepted Answer

A) True 
 B)False

Question 15

Note payable, accounts payable, and salary payable are all examples of:

Accepted Answer

A)  assets 
B)  revenue 
C)  expenses 
D)  liabilities 
A)  assets 
B)  revenue 
C)  expenses 
D)  liabilities

Question 16

The normal balance of Accounts Receivable is a ________ because it is a(n) ________ account.

Accepted Answer

A)  credit, liability 
B)  debit, expense 
C)  credit, shareholders' equity 
D)  debit, asset 
A)  credit, liability 
B)  debit, expense 
C)  credit, shareholders' equity 
D)  debit, asset

Question 17

Expenses increase shareholders equity. That is why they are credits.

Accepted Answer

A) True 
 B)False

Question 18

Accounts receivable normally has a credit balance.

Accepted Answer

A) True 
 B)False

Question 19

A junior bookkeeper, Bob Delisle, prepared the following trial balance on April 30, 2014, for Big Party Inc.. Prepare a corrected trial balance based on the incorrect trial balance and the additional data.
     Additional data:
1. Cash is overstated by $1,140.
2. Note Payable is understated by $1,440.
3. Service Revenue is understated by $6,400.

Accepted Answer

@#IMG-DLM&_TB4002_00

Question 20

Making a cash payment to settle a debt would include a:

Accepted Answer

A)  debit to Cash and a credit to Accounts Receivable 
B)  debit to Accounts Receivable and a credit to Cash 
C)  debit to Accounts Payable and a credit to Cash 
D)  debit to Accounts Payable and a credit to Accounts Receivable 
A)  debit to Cash and a credit to Accounts Receivable 
B)  debit to Accounts Receivable and a credit to Cash 
C)  debit to Accounts Payable and a credit to Cash 
D)  debit to Accounts Payable and a credit to Accounts Receivable

Purchasing supplies and paying cash for them would:

Which of the following statements regarding a trial balance is false?

The purchase of office equipment on account would increase an asset and decrease a liability account.

Which of the following items would not be included in the journal entry for a transaction?

What type of account is Prepaid Rent?

An owner makes an investment of cash into the business. Such a transaction would include a:

Which of the following statements regarding accounts is false?

The left side of a T-account is always the side that increases the balance of the account.

A trial balance is:

A trial balance is a useful device because it provides a check on accuracy by showing whether:

An owner investment of a building, valued at $100,000 with an $80,000 outstanding mortgage, transferring this asset into the business would:

A credit always decreases an asset account.

The account called Accrued Liabilities is really an expense account and not a liability account.

Note payable, accounts payable, and salary payable are all examples of:

The normal balance of Accounts Receivable is a because it is a(n) account.

Expenses increase shareholders equity. That is why they are credits.

Accounts receivable normally has a credit balance.

Making a cash payment to settle a debt would include a:

The Financial Statements

Accrual Accounting and the Financial Statements

Internal Control and Cash

Short-Term Investments and Receivables

Inventory and Cost of Goods Sold

Property, Plant, and Equipment, and Intangible Assets

Long-Term Investments and the Time Value of Money

Liabilities

Shareholders Equity

The Income Statement, the Statement of Comprehensive Income, and the Statement of Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 2: Recording Business Transactions

Purchasing supplies and paying cash for them would:

Which of the following statements regarding a trial balance is false?

The purchase of office equipment on account would increase an asset and decrease a liability account.

Which of the following items would not be included in the journal entry for a transaction?

What type of account is Prepaid Rent?

An owner makes an investment of cash into the business. Such a transaction would include a:

Which of the following statements regarding accounts is false?

The left side of a T-account is always the side that increases the balance of the account.

A trial balance is:

A trial balance is a useful device because it provides a check on accuracy by showing whether:

An owner investment of a building, valued at $100,000 with an $80,000 outstanding mortgage, transferring this asset into the business would:

A credit always decreases an asset account.

The account called Accrued Liabilities is really an expense account and not a liability account.

Note payable, accounts payable, and salary payable are all examples of:

The normal balance of Accounts Receivable is a ________ because it is a(n) ________ account.

Expenses increase shareholders equity. That is why they are credits.

Accounts receivable normally has a credit balance.

Making a cash payment to settle a debt would include a:

The Financial Statements

Accrual Accounting and the Financial Statements

Internal Control and Cash

Short-Term Investments and Receivables

Inventory and Cost of Goods Sold

Property, Plant, and Equipment, and Intangible Assets

Long-Term Investments and the Time Value of Money

Liabilities

Shareholders Equity

The Income Statement, the Statement of Comprehensive Income, and the Statement of Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters

The normal balance of Accounts Receivable is a because it is a(n) account.