Question 1

A credit may signify a(n):

Accepted Answer

A) increase in assets. 
B) decrease in liabilities. 
C) increase in capital. 
D) increase in withdrawals. 
A) increase in assets. 
B) decrease in liabilities. 
C) increase in capital. 
D) increase in withdrawals.

Question 2

A credit to an asset account was posted to the Capital account. This error would cause:

Accepted Answer

A) assets to be overstated. 
B) liabilities to be overstated. 
C) Capital to be understated. 
D) Both A and C are correct. 
A) assets to be overstated. 
B) liabilities to be overstated. 
C) Capital to be understated. 
D) Both A and C are correct.

Question 3

A transaction that involves more than one credit or more than one debit is called a compound entry.

Accepted Answer

A) True 
 B)False

Question 4

Extreme Home bought painting equipment on account for $2,100. The entry would include:

Accepted Answer

A) debit to Supplies Expense, $2,100; credit to Cash, $2,100. 
B) debit to Equipment, $2,100; credit to Cash, $2,100. 
C) debit to Equipment, $2,100; credit to Accounts Payable, $2,100. 
D) debit to Supplies Expense, $2,100; credit to Accounts Payable, $2,100. 
A) debit to Supplies Expense, $2,100; credit to Cash, $2,100. 
B) debit to Equipment, $2,100; credit to Cash, $2,100. 
C) debit to Equipment, $2,100; credit to Accounts Payable, $2,100. 
D) debit to Supplies Expense, $2,100; credit to Accounts Payable, $2,100.

Question 5

Equipment is an example of a liability.

Accepted Answer

A) True 
 B)False

Question 6

The Accounts Payable account has total debit postings of $900 and credit postings of $1,500. The balance is:

Accepted Answer

A) $2,200 debit. 
B) $600 credit. 
C) $2,200 credit. 
D) $600 debit. 
A) $2,200 debit. 
B) $600 credit. 
C) $2,200 credit. 
D) $600 debit.

Question 7

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account appears upon.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 8

Accounts receivable increases on the debit side of the account.

Accepted Answer

A) True 
 B)False

Question 9

Accounts Payable appears on the income statement.

Accepted Answer

A) True 
 B)False

Question 10

One asset would be debited and another credited if:

Accepted Answer

A) the business provided services to a cash customer. 
B) the business paid a creditor. 
C) the business bought supplies paying cash. 
D) the business provided services to a credit customer. 
A) the business provided services to a cash customer. 
B) the business paid a creditor. 
C) the business bought supplies paying cash. 
D) the business provided services to a credit customer.

Question 11

Net income or net loss for a period is calculated by the following formula:

Accepted Answer

A) total revenues - total withdrawals. 
B) total revenues - total expenses - total withdrawals. 
C) total revenues - total expenses. 
D) total revenues - total expenses + capital. 
A) total revenues - total withdrawals. 
B) total revenues - total expenses - total withdrawals. 
C) total revenues - total expenses. 
D) total revenues - total expenses + capital.

Question 12

The Beginning Capital account would appear on which financial statement?

Accepted Answer

A) Statement of owner's equity 
B) Balance sheet 
C) Income statement 
D) None of these answers are correct. 
A) Statement of owner's equity 
B) Balance sheet 
C) Income statement 
D) None of these answers are correct.

Question 13

A debit to an expense account was posted to a revenue account. This error would cause:

Accepted Answer

A) assets to be overstated. 
B) liabilities to be overstated. 
C) revenue to be understated. 
D) None of the above are correct. 
A) assets to be overstated. 
B) liabilities to be overstated. 
C) revenue to be understated. 
D) None of the above are correct.

Question 14

The following is a list of accounts and their balances for Myra's Company for the month ended May 31, 20xx. Prepare a trial balance in good form.

Accepted Answer

The answer of The following is a list of accounts...

Question 15

Accounts Receivable indicates amounts owed to us by our clients or customers.

Accepted Answer

A) True 
 B)False

Question 16

The income statement contains:

Accepted Answer

A) liabilities. 
B) revenues. 
C) assets. 
D) Both B and C are correct. 
A) liabilities. 
B) revenues. 
C) assets. 
D) Both B and C are correct.

Question 17

What would be the effect on accounts if the business received the telephone bill but did not pay it immediately.

Accepted Answer

A) An expense would be debited and a liability credited. 
B) Capital would be debited and revenue credited. 
C) An expense would be debited and an asset credited. 
D) An asset would be debited and Capital credited. 
A) An expense would be debited and a liability credited. 
B) Capital would be debited and revenue credited. 
C) An expense would be debited and an asset credited. 
D) An asset would be debited and Capital credited.

Question 18

Identify the normal balance for each of the following accounts by placing a Dr. (debit)or a Cr. (credit)in the space provided.
________ 1. Computer
________ 2. M. Bryant, Withdrawals
________ 3. M. Bryant, Capital
________ 4. Legal Fees
________ 5. Cash
________ 6. Accounts Receivable
________ 7. Accounts Payable
________ 8. Rent Expense
________ 9. Office Equipment
________ 10. Supplies

Accepted Answer

1. Dr.
2. Dr.
3. Cr.

Question 19

Revenues are recorded when earned.

Accepted Answer

A) True 
 B)False

Question 20

A chart of accounts is below. Following is a series of transactions. Indicate for each transaction the accounts that should be debited and credited by inserting the proper account number in the space provided.

Accepted Answer

The answer of A chart of accounts is below. Following...

Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

A credit may signify a(n):

A credit to an asset account was posted to the Capital account. This error would cause:

A transaction that involves more than one credit or more than one debit is called a compound entry.

Extreme Home bought painting equipment on account for $2,100. The entry would include:

Equipment is an example of a liability.

The Accounts Payable account has total debit postings of $900 and credit postings of $1,500. The balance is:

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account appears upon. -

Accounts receivable increases on the debit side of the account.

Accounts Payable appears on the income statement.

One asset would be debited and another credited if:

Net income or net loss for a period is calculated by the following formula:

The Beginning Capital account would appear on which financial statement?

A debit to an expense account was posted to a revenue account. This error would cause:

The following is a list of accounts and their balances for Myra's Company for the month ended May 31, 20xx. Prepare a trial balance in good form.

Accounts Receivable indicates amounts owed to us by our clients or customers.

The income statement contains:

What would be the effect on accounts if the business received the telephone bill but did not pay it immediately.

Revenues are recorded when earned.

A chart of accounts is below. Following is a series of transactions. Indicate for each transaction the accounts that should be debited and credited by inserting the proper account number in the space provided.

Accounting Concepts and Procedures

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes: the Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters