Question 1

Debit is abbreviated as DE and Credit is abbreviated as CR.

Accepted Answer

A) True 
 B)False

Question 2

In reviewing the T-account for Accounts Payable, you find that the beginning balance is zero, the total increases are $7,900 and the total decreases are $4,200. This means that the ending balance of the account is a credit balance of $3,700.

Accepted Answer

A) True 
 B)False

Question 3

A business receives $40,000 for services that it will perform over the next four months. Which of the following accounts is credited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Service Revenue 
D)  Unearned Revenue 
A)  Cash 
B)  Accounts Payable 
C)  Service Revenue 
D)  Unearned Revenue

Question 4

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

Accepted Answer

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

Question 5

Wilson Furniture Company received cash of $40,000 and issued common stock. Which of the following accounts will be debited?

Accepted Answer

A)  Accounts Receivable 
B)  Cash 
C)  Common Stock 
D)  Accounts Payable 
A)  Accounts Receivable 
B)  Cash 
C)  Common Stock 
D)  Accounts Payable

Question 6

A business purchases $1,000 of office supplies on account. Which of the following accounts is debited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Prepaid Asset 
A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Prepaid Asset

Question 7

State whether the normal balance of each of the following accounts is a debit or credit.
 $$\begin{array} { | l | l | } 
\hline \text { Account } & \text { Normal Balance } \
\hline \text { Common Stock } & \
\hline \text { Accounts Receivable } & \
\hline \text { Salaries Expense } & \
\hline \text { Unearned Revenue } & \
\hline
\end{array}$$

Accepted Answer

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

Question 8

The following transactions for the month of March have been journalized and posted to the proper accounts. Mar, 1 The business received $8,000 cash and issued common stock to stockholders.
Mar. 2 Paid the first month's rent of $600.
Mar. 3Purchasod equipment by paying $2,000 cash and executing a note payable for $6,000.
Mar. 4 Purchasod office supplies for $\$ 750 \mathrm { cash }$.
Mar. 5 Billed a client for $14,000 of design services completed.
Mar. 6 Received $\$ 5,000$ on account for the services previously recorded. What is the balance in Accounts Receivable?

Accepted Answer

A)  $5,000 
B)  $9,000 
C)  $6,000 
D)  $14,000 
A)  $5,000 
B)  $9,000 
C)  $6,000 
D)  $14,000

Question 9

A liability created when a business receives cash from customers in advance of providing services or delivering goods is called a(n) ________.

Accepted Answer

A)  notes receivable 
B)  unearned revenue 
C)  accrued liability 
D)  service revenue 
A)  notes receivable 
B)  unearned revenue 
C)  accrued liability 
D)  service revenue

Question 10

Which of the following accounts decreases with a debit?

Accepted Answer

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

Question 11

Which of the following is used by both internal and external users?

Accepted Answer

A)  Chart of Accounts 
B)  Trial Balance 
C)  Balance Sheet 
D)  Costing Reports 
A)  Chart of Accounts 
B)  Trial Balance 
C)  Balance Sheet 
D)  Costing Reports

Question 12

A T-account is a summary device with credits posted on the left side of the vertical line.

Accepted Answer

A) True 
 B)False

Question 13

A posting reference column is used ________.

Accepted Answer

A)  while preparing the trial balance using the ledger 
B)  when the information is transferred from the journal to the ledger 
C)  when the information is transferred from the ledger to the post-closing trial balance 
D)  while preparing the balance sheet using the trial balance 
A)  while preparing the trial balance using the ledger 
B)  when the information is transferred from the journal to the ledger 
C)  when the information is transferred from the ledger to the post-closing trial balance 
D)  while preparing the balance sheet using the trial balance

Question 14

A business collects cash from a customer for services that were performed one month earlier. 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 15

Calculate the debt ratio using the following trial balance of Superior Instruments, Inc. as of December 31, 2019.
 Superior Instruments, Inc.
Trial Balance
December 31, 2019
 $\begin{array}{ll}
\text { Account Title } & \text { Debit } &\text { Credit }\
\text { Cash } & \$ 88,800 \
\text { Accounts Receivable } & 5,000 \
\text { Office Supplies } & 3,400 \
\text { Land } & 70,000 \
\text { Building } & 16,500 \
\text { Equipment } & 2,000\
\text { Accounts Payable } & & \$ 15,000 \
\text { Notes Payable } & & 60,000 \
\text { Common Stock } & & 50,000 \
\text { Dividends } & 1,200 &\
\text { Service Revenue } & & 72,000 \
\text { Utilities Expense } & 4,100 & \
\text { Salaries Expense } & 4,000 & \
\text { Advertising Expense } & \underline{2,000} & \underline{\quad \quad}\
\text { Total } & \underline{\$ 197,000 }& \underline{\$ 197,000}

\end{array}$

Accepted Answer

Liabilities
   Assets
   Debt

Question 16

Which of the following is a source document that provides the evidence and data for accounting transactions?

Accepted Answer

A)  Journal 
B)  Sales invoice 
C)  Ledger 
D)  Trial balance 
A)  Journal 
B)  Sales invoice 
C)  Ledger 
D)  Trial balance

Question 17

Adams, Inc. recorded the following journal entry on March 2, 2018. $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 9,000 & \
\hline \text { Unearned Revenue } & & 9,000 \
\hline
\end{array}$$ From the journal entry above, identify the transaction on March 2, 2018.

Accepted Answer

A)  Adams purchased goods worth $9,000 and signed a one-year note for the same amount. 
B)  Adams sold goods for $9,000 cash. 
C)  Adams received $9,000 for services to be performed in a later period. 
D)  Adams paid $9,000 for services to be received at a later date. 
A)  Adams purchased goods worth $9,000 and signed a one-year note for the same amount. 
B)  Adams sold goods for $9,000 cash. 
C)  Adams received $9,000 for services to be performed in a later period. 
D)  Adams paid $9,000 for services to be received at a later date.

Question 18

A business makes a payment of $1,400 on a note payable. Which of the following journal entries would be recorded?

Accepted Answer

A)  Cash is credited and Notes Payable is debited for $1,400. 
B)  Notes Payable is credited and Cash is debited for $1,400. 
C)  Cash is credited and Financing Expense is debited for $1,400. 
D)  Cash is debited and Financing Revenue is credited for $1,400. 
A)  Cash is credited and Notes Payable is debited for $1,400. 
B)  Notes Payable is credited and Cash is debited for $1,400. 
C)  Cash is credited and Financing Expense is debited for $1,400. 
D)  Cash is debited and Financing Revenue is credited for $1,400.

Question 19

An account that normally has a debit balance may occasionally have a credit balance.

Accepted Answer

A) True 
 B)False

Question 20

Jackson Enterprises is a new corporation. The following transactions occurred during the first month of business.
Prepare journal entries and post the journal entries to T-accounts.
Prepare a trial balance at the end of the first month using the following transactions.
a) Received $15,000 cash and issued common stock.
b) Paid the first month's rent with $800 cash.
c) Purchased equipment by paying $4,000 cash and executing a note payable for $4,000.
d) Purchased office supplies for $200 cash. The supplies remain at the end of the month.
e) Billed clients for a total of $7,000 for design services rendered.
f) Received $1,000 cash from clients for services rendered above.

Accepted Answer

None

Exam 2: Recording Business Transactions

Debit is abbreviated as DE and Credit is abbreviated as CR.

In reviewing the T-account for Accounts Payable, you find that the beginning balance is zero, the total increases are $7,900 and the total decreases are $4,200. This means that the ending balance of the account is a credit balance of $3,700.

A business receives $40,000 for services that it will perform over the next four months. Which of the following accounts is credited?

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

Wilson Furniture Company received cash of $40,000 and issued common stock. Which of the following accounts will be debited?

A business purchases $1,000 of office supplies on account. Which of the following accounts is debited?

State whether the normal balance of each of the following accounts is a debit or credit. Account Normal Balance Common Stock Accounts Receivable Salaries Expense Unearned Revenue

A liability created when a business receives cash from customers in advance of providing services or delivering goods is called a(n) ________.

Which of the following accounts decreases with a debit?

Which of the following is used by both internal and external users?

A T-account is a summary device with credits posted on the left side of the vertical line.

A posting reference column is used ________.

A business collects cash from a customer for services that were performed one month earlier. Which of the following accounts is debited?

Which of the following is a source document that provides the evidence and data for accounting transactions?

Adams, Inc. recorded the following journal entry on March 2, 2018. Cash 9,000 Unearned Revenue 9,000 From the journal entry above, identify the transaction on March 2, 2018.

A business makes a payment of $1,400 on a note payable. Which of the following journal entries would be recorded?

An account that normally has a debit balance may occasionally have a credit 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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