Question 1

Accounting transactions are first recorded in a book or record called a:

Accepted Answer

A)  file 
B)  ledger 
C)  journal 
D)  source document 
A)  file 
B)  ledger 
C)  journal 
D)  source document

Question 2

The normal balance of the Supplies account is a ________ because it is a(n) ________ account.

Accepted Answer

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

Question 3

The retained earnings account represents the money invested by shareholders into the business since its inception.

Accepted Answer

A) True 
 B)False

Question 4

The accounting transaction to record payment of the telephone bill would include a:

Accepted Answer

A)  credit to Cash 
B)  credit to Accounts Payable 
C)  credit to Utilities Expense 
D)  debit to Accounts Receivable 
A)  credit to Cash 
B)  credit to Accounts Payable 
C)  credit to Utilities Expense 
D)  debit to Accounts Receivable

Question 5

For each of the following independent scenarios, fill in the blanks with the appropriate dollar amount.

Accepted Answer

@#IMG-DLM&_TB4002_00

Question 6

The costs of operating a business are usually called:

Accepted Answer

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

Question 7

Every accounting transaction involves an increase in at least one account and a decrease in at least one other account.

Accepted Answer

A) True 
 B)False

Question 8

Given the following transactions for Clip Corporation, prepare a trial balance as of March 31, 2014.
a. Owner invested $15,250 cash and $6,500 worth of equipment into the business received common shares in return.
b. Purchased supplies on account, $450.
c. Rented office space paying one months rent, $850.
d. Performed services for a customer on account, $1,400.
e. Purchased a truck by paying $1,000 down and signing a note for the remainder of $8,500.
f. Performed services for a customer and immediately collected $800 cash.
g. Paid employees salaries of $1,200.
h. Owner received a dividend of $500.

Accepted Answer

@#IMG-DLM&_TB4002_00

Question 9

The payment of the owner's personal expenses from the business's chequebook should be recorded with a debit to:

Accepted Answer

A)  Cash 
B)  Dividends 
C)  Common shares 
D)  Accounts Receivable 
A)  Cash 
B)  Dividends 
C)  Common shares 
D)  Accounts Receivable

Question 10

When the owner of a business invests cash into the business, which of the following accounts is debited?

Accepted Answer

A)  Dividends 
B)  Cash 
C)  Common Shares 
D)  Accounts Receivable 
A)  Dividends 
B)  Cash 
C)  Common Shares 
D)  Accounts Receivable

Question 11

A credit increases the balance of which types of accounts?

Accepted Answer

A)  revenue and assets 
B)  liabilities and assets 
C)  liabilities and expenses 
D)  shareholders' equity and liabilities 
A)  revenue and assets 
B)  liabilities and assets 
C)  liabilities and expenses 
D)  shareholders' equity and liabilities

Question 12

The purchase of a building with a cash down payment and a written promise to pay the balance in the future would include a:

Accepted Answer

A)  credit to Cash and a credit to Note Payable 
B)  debit to Cash and a credit to Buildings 
C)  debit to Note Payable and a credit to Cash 
D)  debit to Cash and a debit to Note Payable 
A)  credit to Cash and a credit to Note Payable 
B)  debit to Cash and a credit to Buildings 
C)  debit to Note Payable and a credit to Cash 
D)  debit to Cash and a debit to Note Payable

Question 13

The collection of cash from a customer on account would:

Accepted Answer

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

Question 14

Which of the following accounts normally has a debit balance?

Accepted Answer

A)  Dividends 
B)  Retained Earnings 
C)  Share capital 
D)  Revenue 
A)  Dividends 
B)  Retained Earnings 
C)  Share capital 
D)  Revenue

Question 15

Which of the following business events may not be recorded in a company's general ledger?

Accepted Answer

A)  The company paid each of its employees a Christmas bonus. 
B)  The company issued 100 shares of common stock. 
C)  The company purchased two acres of land for future plant expansion. 
D)  A lawsuit has been filed by one of the company's customers (against the company). 
A)  The company paid each of its employees a Christmas bonus. 
B)  The company issued 100 shares of common stock. 
C)  The company purchased two acres of land for future plant expansion. 
D)  A lawsuit has been filed by one of the company's customers (against the company).

Question 16

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

Accepted Answer

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

Question 17

Posting, a part of the accounting process, refers to:

Accepted Answer

A)  copying amounts from the accounts in the general ledger to the journal 
B)  copying amounts from the financial statements to the general ledger 
C)  copying amounts from the journal to the appropriate accounts in the general ledger 
D)  copying amounts from the general ledger to the financial statements 
A)  copying amounts from the accounts in the general ledger to the journal 
B)  copying amounts from the financial statements to the general ledger 
C)  copying amounts from the journal to the appropriate accounts in the general ledger 
D)  copying amounts from the general ledger to the financial statements

Question 18

The trial balance is used to prepare the income statement.

Accepted Answer

A) True 
 B)False

Question 19

The Dividends account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 20

Debits are always recorded (journalized) after credits.

Accepted Answer

A) True 
 B)False

Accounting transactions are first recorded in a book or record called a:

The normal balance of the Supplies account is a because it is a(n) account.

The retained earnings account represents the money invested by shareholders into the business since its inception.

The accounting transaction to record payment of the telephone bill would include a:

For each of the following independent scenarios, fill in the blanks with the appropriate dollar amount.

The costs of operating a business are usually called:

Every accounting transaction involves an increase in at least one account and a decrease in at least one other account.

The payment of the owner's personal expenses from the business's chequebook should be recorded with a debit to:

When the owner of a business invests cash into the business, which of the following accounts is debited?

A credit increases the balance of which types of accounts?

The purchase of a building with a cash down payment and a written promise to pay the balance in the future would include a:

The collection of cash from a customer on account would:

Which of the following accounts normally has a debit balance?

Which of the following business events may not be recorded in a company's general ledger?

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

Posting, a part of the accounting process, refers to:

The trial balance is used to prepare the income statement.

The Dividends account normally has a debit balance.

Debits are always recorded (journalized) after credits.

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

Accounting transactions are first recorded in a book or record called a:

The normal balance of the Supplies account is a ________ because it is a(n) ________ account.

The retained earnings account represents the money invested by shareholders into the business since its inception.

The accounting transaction to record payment of the telephone bill would include a:

For each of the following independent scenarios, fill in the blanks with the appropriate dollar amount.

The costs of operating a business are usually called:

Every accounting transaction involves an increase in at least one account and a decrease in at least one other account.

The payment of the owner's personal expenses from the business's chequebook should be recorded with a debit to:

When the owner of a business invests cash into the business, which of the following accounts is debited?

A credit increases the balance of which types of accounts?

The purchase of a building with a cash down payment and a written promise to pay the balance in the future would include a:

The collection of cash from a customer on account would:

Which of the following accounts normally has a debit balance?

Which of the following business events may not be recorded in a company's general ledger?

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

Posting, a part of the accounting process, refers to:

The trial balance is used to prepare the income statement.

The Dividends account normally has a debit balance.

Debits are always recorded (journalized) after credits.

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 the Supplies account is a because it is a(n) account.

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