Question 1

A business performs services for a customer for $26,000 on account. Which of the following accounts is 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 2

Consider the following accounts and identify each as an asset (A), liability (L), or equity (E).
 $$\begin{array} { | l | l | } 
\hline \text { Dividends } &\quad\quad\quad\quad \
\hline \text { Unearned Revenue } & \
\hline \text { Office Supplies } & \
\hline \text { Rent Expense } & \
\hline \text { Retained Earnings } & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | } 
\hline \t

Question 3

Which of the following is a liability account?

Accepted Answer

A)  Service Revenue 
B)  Building 
C)  Prepaid Rent 
D)  Unearned Revenue 
A)  Service Revenue 
B)  Building 
C)  Prepaid Rent 
D)  Unearned Revenue

Question 4

Explain the difference between Accounts Receivable and Accounts Payable.

Accepted Answer

Accounts Receivable is an asset account

Question 5

A business makes a cash payment to a supplier on account for office supplies that were purchased earlier. Which of the following accounts is credited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Office Supplies Expense 
A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Office Supplies Expense

Question 6

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 is true at the time the invoice is issued?

Accepted Answer

A)  Equity will decrease. 
B)  Total liabilities will increase. 
C)  Total assets will decrease. 
D)  Net income will increase. 
A)  Equity will decrease. 
B)  Total liabilities will increase. 
C)  Total assets will decrease. 
D)  Net income will increase.

Question 7

________ represents a debt owed for renting a building.

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 8

In a computerized environment, the posting process is completed automatically when the user enters the journal entry.

Accepted Answer

A) True 
 B)False

Question 9

A bank deposit slip is a source document that shows the total of all checks written by a company.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following journal entries would be recorded if a corporation issued common stock and received $3,000?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 3,000 & \
\hline \text { Common Stock } & & 3,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 3,000 & \
\hline \text { Service Revenue } & & 3,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Common Stock } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 3,000 & \
\hline \text { Unearned Revenue } & & 3,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 3,000 & \
\hline \text { Common Stock } & & 3,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 3,000 & \
\hline \text { Service Revenue } & & 3,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Common Stock } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 3,000 & \
\hline \text { Unearned Revenue } & & 3,000 \
\hline
\end{array}$$

Question 11

Which is a true statement regarding the accounting equation?

Accepted Answer

A)  The equation can be stated as assets minus liabilities equals equity. 
B)  The equation consists of three parts: assets, liabilities, and net income. 
C)  The equation is an optional tool for accountants to use. 
D)  The equation does not need to balance during a specific period. 
A)  The equation can be stated as assets minus liabilities equals equity. 
B)  The equation consists of three parts: assets, liabilities, and net income. 
C)  The equation is an optional tool for accountants to use. 
D)  The equation does not need to balance during a specific period.

Question 12

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance. List three actions that can then be used to find the errors.

Accepted Answer

1. Search the trial balance fo

Question 13

The Common Stock account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 14

Debits in the journal are always posted as debits in the ledger.

Accepted Answer

A) True 
 B)False

Question 15

The Accounts Receivable account of Brownstone, Inc. has the following postings: $$\begin{array} { l | l } 
 { \text { Accounts Receivable } } \
\hline 23,000 & 3,000 \
2,000 &
\end{array}$$ Calculate the ending balance of the account.

Accepted Answer

A)  $28,000 debit 
B)  $25,000 debit 
C)  $3,000 credit 
D)  $22,000 debit 
A)  $28,000 debit 
B)  $25,000 debit 
C)  $3,000 credit 
D)  $22,000 debit

Question 16

A liability account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 17

Revenues and stockholders' contributions in the business increase equity.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

A cash payment of $5,000 was made for dividends. Which of the following accounts is debited?

Accepted Answer

A)  Cash 
B)  Dividends 
C)  Dividend Expense 
D)  Common Stock 
A)  Cash 
B)  Dividends 
C)  Dividend Expense 
D)  Common Stock

Exam 2: Recording Business Transactions

A business performs services for a customer for $26,000 on account. Which of the following accounts is debited?

Consider the following accounts and identify each as an asset (A), liability (L), or equity (E). Dividends Unearned Revenue Office Supplies Rent Expense Retained Earnings

Which of the following is a liability account?

Explain the difference between Accounts Receivable and Accounts Payable.

A business makes a cash payment to a supplier on account for office supplies that were purchased earlier. Which of the following accounts is credited?

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 is true at the time the invoice is issued?

________ represents a debt owed for renting a building.

In a computerized environment, the posting process is completed automatically when the user enters the journal entry.

A bank deposit slip is a source document that shows the total of all checks written by a company.

Which of the following journal entries would be recorded if a corporation issued common stock and received $3,000?

Which is a true statement regarding the accounting equation?

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance. List three actions that can then be used to find the errors.

The Common Stock account is increased by a debit.

Debits in the journal are always posted as debits in the ledger.

The Accounts Receivable account of Brownstone, Inc. has the following postings: Accounts Receivable 23,000 3,000 2,000 Calculate the ending balance of the account.

A liability account is increased by a debit.

Revenues and stockholders' contributions in the business increase equity.

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

A cash payment of $5,000 was made for dividends. Which of the following accounts is debited?

Accounting and the Business Environment

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based Just-In-Time

Cost Volume Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Understanding Accounting Information Systems and their Components

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