Question 1

Provide a definition of each of the follow accounting terms.
 $$\begin{array} { | l | l | } 
\hline \text { Accounting Term } & \text { Definition } \
\hline \text { Compound journal entry } & \
\hline \text { Journal } & \
\hline \text { Account } & \
\hline
\end{array}$$

Accepted Answer

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

Question 2

Donaldson's Delivery Company began operations on January 1, 2019. The following Trial Balance was prepared on December 31, 2019. Donaldson's Delivery Service Company 
Trial Balance
December 31, 2019
   What is the net income for the year ended December 31, 2019?

Accepted Answer

A)  $15,400 
B)  $22,200 
C)  $24,700 
D)  $74,400 
A)  $15,400 
B)  $22,200 
C)  $24,700 
D)  $74,400

Question 3

Which one of the following account groups normally has a credit balance?

Accepted Answer

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

Question 4

"All debits are increases and all credits are decreases." Is this a correct statement? Explain your answer.

Accepted Answer

This is not a correct statement. The dou

Question 5

Regarding the ledger, which of the following statements is incorrect?

Accepted Answer

A)  Both the chart of accounts and the ledger list the account names and numbers of the business. 
B)  Companies use the ledger to fulfill the task of showing all of the increases and decreases in each account. 
C)  Both the chart of accounts and the ledger provide the balance of each account at a specific point in time. 
D)  The ledger provides more detail than the chart of accounts. 
A)  Both the chart of accounts and the ledger list the account names and numbers of the business. 
B)  Companies use the ledger to fulfill the task of showing all of the increases and decreases in each account. 
C)  Both the chart of accounts and the ledger provide the balance of each account at a specific point in time. 
D)  The ledger provides more detail than the chart of accounts.

Question 6

The higher the debt ratio, the lower the risk of default.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is true of expenses?

Accepted Answer

A)  Expenses increase equity, so an expense account's normal balance is a credit balance. 
B)  Expenses decrease equity, so an expense account's normal balance is a credit balance. 
C)  Expenses increase equity, so an expense account's normal balance is a debit balance. 
D)  Expenses decrease equity, so an expense account's normal balance is a debit balance. 
A)  Expenses increase equity, so an expense account's normal balance is a credit balance. 
B)  Expenses decrease equity, so an expense account's normal balance is a credit balance. 
C)  Expenses increase equity, so an expense account's normal balance is a debit balance. 
D)  Expenses decrease equity, so an expense account's normal balance is a debit balance.

Question 8

Data from a trial balance is used to prepare the income statement, statement of retained earnings, and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 9

The trial balance is one of the basic financial statements that is issued to external users of the business.

Accepted Answer

A) True 
 B)False

Question 10

A compound journal entry has more than two accounts, but the total dollar value of the debits still must equal the total dollar value of the credits.

Accepted Answer

A) True 
 B)False

Question 11

Transactions are first record in a ________.

Accepted Answer

A)  chart of accounts 
B)  trial balance 
C)  journal 
D)  ledger 
A)  chart of accounts 
B)  trial balance 
C)  journal 
D)  ledger

Question 12

Provide an explanation for each of the follow liability accounts.
 $$\begin{array} { | l | l | } 
\hline \text { Account Name } & \text { Explanation } \
\hline \text { Accounts Payable } & \
\
\

\hline\text { Unearned Revenue } \
\
\
\hline \text { Accrued Liability } & \
 & \
& \
\hline
\end{array}$$

Accepted Answer

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

Question 13

The account title used for recording the payment of rent in advance for an office building 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 14

A business purchases equipment in exchange for a note payable. This transaction results in ________.

Accepted Answer

A)  no journal entry because no cash has been paid 
B)  a debit to Notes Payable and a credit to Equipment 
C)  an increase in liabilities 
D)  a debit to Equipment and a credit to Accounts Payable 
A)  no journal entry because no cash has been paid 
B)  a debit to Notes Payable and a credit to Equipment 
C)  an increase in liabilities 
D)  a debit to Equipment and a credit to Accounts Payable

Question 15

Which one of the following account groups normally has a debit balance?

Accepted Answer

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

Question 16

A listing of all accounts in numerical order is called a(n) ________.

Accepted Answer

A)  Ledger 
B)  Journal 
C)  Income statement 
D)  Chart of accounts 
A)  Ledger 
B)  Journal 
C)  Income statement 
D)  Chart of accounts

Question 17

A shortened form of the ledger is called a ________.

Accepted Answer

A)  working account 
B)  summary account 
C)  chart of accounts 
D)  T-account 
A)  working account 
B)  summary account 
C)  chart of accounts 
D)  T-account

Question 18

A business purchased land for $250,000 cash. Record the transaction in the journal.

Accepted Answer

\[\begin{array} { | l | r | r

Question 19

A chart of accounts provides more detail than a ledger.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following represents the correct flow of accounting data?

Accepted Answer

A)  transactions occur; transactions are analyzed; transactions are journalized and posted; source documents are prepared 
B)  transactions occur; source documents are prepared; transactions are journalized and posted; 
C)  transactions occur; source documents are prepared; transactions are analyzed; transactions are journalized and posted 
D)  source documents are prepared; transactions occur; transactions are analyzed; transactions are journalized and posted 
A)  transactions occur; transactions are analyzed; transactions are journalized and posted; source documents are prepared 
B)  transactions occur; source documents are prepared; transactions are journalized and posted; 
C)  transactions occur; source documents are prepared; transactions are analyzed; transactions are journalized and posted 
D)  source documents are prepared; transactions occur; transactions are analyzed; transactions are journalized and posted

Exam 2: Recording Business Transactions

Provide a definition of each of the follow accounting terms. Accounting Term Definition Compound journal entry Journal Account

Donaldson's Delivery Company began operations on January 1, 2019. The following Trial Balance was prepared on December 31, 2019. Donaldson's Delivery Service Company Trial Balance December 31, 2019 What is the net income for the year ended December 31, 2019?

Which one of the following account groups normally has a credit balance?

"All debits are increases and all credits are decreases." Is this a correct statement? Explain your answer.

Regarding the ledger, which of the following statements is incorrect?

The higher the debt ratio, the lower the risk of default.

Which of the following statements is true of expenses?

Data from a trial balance is used to prepare the income statement, statement of retained earnings, and the balance sheet.

The trial balance is one of the basic financial statements that is issued to external users of the business.

A compound journal entry has more than two accounts, but the total dollar value of the debits still must equal the total dollar value of the credits.

Transactions are first record in a ________.

Provide an explanation for each of the follow liability accounts. Account Name Explanation Accounts Payable Unearned Revenue Accrued Liability

The account title used for recording the payment of rent in advance for an office building is ________.

A business purchases equipment in exchange for a note payable. This transaction results in ________.

Which one of the following account groups normally has a debit balance?

A listing of all accounts in numerical order is called a(n) ________.

A shortened form of the ledger is called a ________.

A business purchased land for $250,000 cash. Record the transaction in the journal.

A chart of accounts provides more detail than a ledger.

Which of the following represents the correct flow of accounting data?

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

Filters