Question 1

The four-column account ________.

Accepted Answer

A)  is an alternative to using the ledger 
B)  includes the Post. Ref. column which allows a user of the financial data to trace the amount in the journal back to the ledger 
C)  is not frequently used in practice because it provides less information than T-accounts 
D)  adds two additional columns that are used to determine a running balance 
A)  is an alternative to using the ledger 
B)  includes the Post. Ref. column which allows a user of the financial data to trace the amount in the journal back to the ledger 
C)  is not frequently used in practice because it provides less information than T-accounts 
D)  adds two additional columns that are used to determine a running balance

Question 2

Liabilities are economic resources that are expected to benefit the business in the future.

Accepted Answer

A) True 
 B)False

Question 3

The following transactions for the month of March have been journalized and posted to the proper accounts. Mar, 1 The business received $\$ 7,000$ cash and issued common stock to stockholders.
Mar. 2 Paid the first month's rent of $\$ 700$.
Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $8,000.
Mar. 4 Iurchased office supplies for $\$ 700 \mathrm { cash }$.
Mar. 5 Eilled a client for $\$ 10,000$ of design services completed.
Mar. 6 Received $\$ 7,800$ on account for the services previously recorded. What is the balance in Cash on March 6?

Accepted Answer

A)  $11,100 
B)  $10,400 
C)  $13,400 
D)  $11,800 
A)  $11,100 
B)  $10,400 
C)  $13,400 
D)  $11,800

Question 4

For expenses, the category of account and its normal balance is ________.

Accepted Answer

A)  equity and a credit balance 
B)  assets and a debit balance 
C)  assets and a credit balance 
D)  equity and a debit balance 
A)  equity and a credit balance 
B)  assets and a debit balance 
C)  assets and a credit balance 
D)  equity and a debit balance

Question 5

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance.

Accepted Answer

A) True 
 B)False

Question 6

An asset account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 7

The following are selected current month's balances for Allbright Enterprises. $$\begin{array} { | l | r | } 
\hline \text { Accounts Payable } & \$ 8,000 \
\hline \text { Revenue } & 12,000 \
\hline \text { Cash } & 6,000 \
\hline \text { Expenses } & 1,300 \
\hline \text { Furniture } & 10,000 \
\hline \text { Accounts Receivable } & 14,000 \
\hline \text { Common Stock } & 7,250 \
\hline \text { Notes Payable } & 4,050 \
\hline
\end{array}$$ Based on this information, calculate is the total amount of debits for the trial balance?

Accepted Answer

A)  $24,000 
B)  $25,300 
C)  $30,000 
D)  $31,300 
A)  $24,000 
B)  $25,300 
C)  $30,000 
D)  $31,300

Question 8

Companies use a ledger to show all of the increases and decreases in each account along with their balances.

Accepted Answer

A) True 
 B)False

Question 9

After initially recording a transaction, the data is then transferred to the ________.

Accepted Answer

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

Question 10

Prepaid Rent is a liability account.

Accepted Answer

A) True 
 B)False

Question 11

Randall's Service Company began operations on January 1, 2019. The following Trial Balance was prepared on December 31, 2019. Capital contributions during the year were $54,000. Randall's Service Company
Trial Balance
December 31, 2019
   What is the December 31, 2019 balance of Retained Earnings?

Accepted Answer

A)  $33,100 
B)  $19,300 
C)  $20,500 
D)  $25,500 
A)  $33,100 
B)  $19,300 
C)  $20,500 
D)  $25,500

Question 12

The system of accounting in which every transaction affects at least two accounts is called the double-entry system.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A business makes a payment in cash for advertising expense. Which of the following accounts is credited?

Accepted Answer

A)  Prepaid Advertising 
B)  Accounts Receivable 
C)  Cash 
D)  Advertising Expense 
A)  Prepaid Advertising 
B)  Accounts Receivable 
C)  Cash 
D)  Advertising Expense

Question 15

Watson Foods, Inc. reported the following transactions for September 2019. 
A. The business received $22,000 cash and issued common stock. It was credited to Common Stock.
B. The business purchased office equipment for $9,000 for which $3,500 cash was paid and the balance was put on a note payable.
C.Paid insurance expense of $1,800 cash.
D. Paid the September utility bill for $900 cash.
E. Paid $2,000 cash for September rent.
F. The business had sales of $10,000 in September. Of these sales, 60% were cash sales, and the balance was credit sales.
G. The business paid $7,000 cash for office furniture.
What are the total liabilities at the end of September, 2019?

Accepted Answer

A)  $10,000 
B)  $1,800 
C)  $5,500 
D)  $9,000 
A)  $10,000 
B)  $1,800 
C)  $5,500 
D)  $9,000

Question 16

List the four steps in the flow of accounting data.

Accepted Answer

1. Transactions occur.
2. Sour

Question 17

A business performs services for its customer for $50,000 on account. Record the transaction in the journal.

Accepted Answer

\[\begin{array} { | c | r | r | } 
\hlin

Question 18

A business buys $300 of office supplies on account. Which of the following accounts is debited?

Accepted Answer

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

Question 19

Which one of the following account groups will decrease with a debit?

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 20

Which of the following statements is true of a trial balance?

Accepted Answer

A)  A trial balance is the first step in the accounting cycle. 
B)  A trial balance is also known as a balance sheet. 
C)  A trial balance is a list of all accounts with their balances. 
D)  A trial balance is also known as the chart of accounts. 
A)  A trial balance is the first step in the accounting cycle. 
B)  A trial balance is also known as a balance sheet. 
C)  A trial balance is a list of all accounts with their balances. 
D)  A trial balance is also known as the chart of accounts.

Exam 2: Recording Business Transactions

The four-column account ________.

Liabilities are economic resources that are expected to benefit the business in the future.

For expenses, the category of account and its normal balance is ________.

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance.

An asset account is increased by a debit.

Companies use a ledger to show all of the increases and decreases in each account along with their balances.

After initially recording a transaction, the data is then transferred to the ________.

Prepaid Rent is a liability account.

Randall's Service Company began operations on January 1, 2019. The following Trial Balance was prepared on December 31, 2019. Capital contributions during the year were $54,000. Randall's Service Company Trial Balance December 31, 2019 What is the December 31, 2019 balance of Retained Earnings?

The system of accounting in which every transaction affects at least two accounts is called the double-entry system.

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

A business makes a payment in cash for advertising expense. Which of the following accounts is credited?

List the four steps in the flow of accounting data.

A business performs services for its customer for $50,000 on account. Record the transaction in the journal.

A business buys $300 of office supplies on account. Which of the following accounts is debited?

Which one of the following account groups will decrease with a debit?

Which of the following statements is true of a trial balance?

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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