Question 1

Accounts Payable is a(n) ________ account and has a normal ________ balance.

Accepted Answer

A)  liability; debit 
B)  asset; debit 
C)  liability; credit 
D)  asset; credit 
A)  liability; debit 
B)  asset; debit 
C)  liability; credit 
D)  asset; credit

Question 2

Provide a definition of each of the follow accounting terms.
 $$\begin{array} { | l | l | } 
\hline \text { Accounting Term } & \text { Definition } \
\hline \text { Chart of accounts } & \
\hline \text { Posting } & \
\hline \text { Normal balance } & \
\hline
\end{array}$$

Accepted Answer

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

Question 3

Baytown Paper Company has a debt ratio of 25%, which means that 75% of the assets are financed by creditors.

Accepted Answer

A) True 
 B)False

Question 4

Each category of the accounting equation contains accounts.

Accepted Answer

A) True 
 B)False

Question 5

For each transaction, identify which account is debited and which account is credited. Use proper account titles.
 $$\begin{array} { | l | l | l | } 
\hline  { \text { Transaction } } & \text { Debit } & \text { Credit } \
\hline \text { Received cash on account from a } & & \
\text { Eustomer } & & \
\hline \text { Paid cash dividends to } & & \
\text { Etockholders } & & \
\hline \text { Purchased office supplies on } & & \
\text { account } & & \
\hline\text { Received cash from customers for } & & \
\text { pervices to be performed next } & & \
\text { month } & & \
\hline \text { Paid employee's salary } & & \
\hline 
\end{array}$$

Accepted Answer

None

Question 6

Which of the following is provided in a typical chart of accounts?

Accepted Answer

A)  Account balance 
B)  Account number 
C)  Dates of transactions 
D)  Transaction amounts 
A)  Account balance 
B)  Account number 
C)  Dates of transactions 
D)  Transaction amounts

Question 7

A business pays $800 cash for office supplies. 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 8

Journalizing a transaction involves ________.

Accepted Answer

A)  calculating the balance in an account using journal entries 
B)  posting the account balances in the chart of accounts 
C)  preparing a summary of account balances 
D)  recording the data only in the journal 
A)  calculating the balance in an account using journal entries 
B)  posting the account balances in the chart of accounts 
C)  preparing a summary of account balances 
D)  recording the data only in the journal

Question 9

The stockholders' claim to the assets of a business is called equity or stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 10

When a business collects cash, the Cash account is debited.

Accepted Answer

A) True 
 B)False

Question 11

A chart of accounts is a list of all of a company's accounts with their account numbers.

Accepted Answer

A) True 
 B)False

Question 12

A trial balance is the list of only a company's asset and liability accounts, along with their account numbers, at a point in time.

Accepted Answer

A) True 
 B)False

Question 13

Employees worked and a business paid salaries of $6,000 in cash. Record the transaction in the journal.

Accepted Answer

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

Question 14

A business repays the amount borrowed on a note with cash. Which of the following accounts is debited?

Accepted Answer

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

Question 15

The following are the current month's balances for selected accounts of Sandlin Marketing Company. $$\begin{array} { | l | r | } 
\hline \text { Accounts Payable } & \$ 9,000 \
\hline \text { Revenue } & 8,000 \
\hline \text { Cash } & 7,650 \
\hline \text { Expenses } & 1,100 \
\hline \text { Furniture } & 11,000 \
\hline \text { Accounts Receivable } & 12,000 \
\hline \text { Common Stock } & 10,250 \
\hline \text { Notes Payable } & 4,500 \
\hline
\end{array}$$ What is the net income for Sandlin Marketing for the current month?

Accepted Answer

A)  $8,000 
B)  $6,900 
C)  $9,100 
D)  $15,650 
A)  $8,000 
B)  $6,900 
C)  $9,100 
D)  $15,650

Question 16

What are two ways in which a company can improve its debt ratio?

Accepted Answer

Increase a

Question 17

A business makes a cash payment of $12,000 to a supplier for supplies purchased two weeks earlier. Which of the following accounts is debited?

Accepted Answer

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

Question 18

The Accounts Payable account of Waterford, Inc. has the following postings: $$\begin{array} { l | l } 
 { \text { Accounts Receivable } } \
\hline 17,000 & 27,000 \
8,000 & 12,000 \
&
\end{array}$$ Calculate the ending balance of the account.

Accepted Answer

A)  $12,000 credit 
B)  $14,000 debit 
C)  $14,000 credit 
D)  $8,000 debit 
A)  $12,000 credit 
B)  $14,000 debit 
C)  $14,000 credit 
D)  $8,000 debit

Question 19

A business pays cash for dividends. Which of the following accounts is credited?

Accepted Answer

A)  Common Stock 
B)  Dividends 
C)  Cash 
D)  Retained Earnings 
A)  Common Stock 
B)  Dividends 
C)  Cash 
D)  Retained Earnings

Question 20

A trial balance is a list of all of the ledger accounts of a company with their balances at a point in time.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

Accounts Payable is a(n) ________ account and has a normal ________ balance.

Provide a definition of each of the follow accounting terms. Accounting Term Definition Chart of accounts Posting Normal balance

Baytown Paper Company has a debt ratio of 25%, which means that 75% of the assets are financed by creditors.

Each category of the accounting equation contains accounts.

Which of the following is provided in a typical chart of accounts?

A business pays $800 cash for office supplies. Which of the following accounts is credited?

Journalizing a transaction involves ________.

The stockholders' claim to the assets of a business is called equity or stockholders' equity.

When a business collects cash, the Cash account is debited.

A chart of accounts is a list of all of a company's accounts with their account numbers.

A trial balance is the list of only a company's asset and liability accounts, along with their account numbers, at a point in time.

Employees worked and a business paid salaries of $6,000 in cash. Record the transaction in the journal.

A business repays the amount borrowed on a note with cash. Which of the following accounts is debited?

What are two ways in which a company can improve its debt ratio?

A business makes a cash payment of $12,000 to a supplier for supplies purchased two weeks earlier. Which of the following accounts is debited?

The Accounts Payable account of Waterford, Inc. has the following postings: Accounts Receivable 17,000 27,000 8,000 12,000 Calculate the ending balance of the account.

A business pays cash for dividends. Which of the following accounts is credited?

A trial balance is a list of all of the ledger accounts of a company with their balances at a point in time.

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

Accounts Payable is a(n) account and has a normal balance.