Question 1

A formal account that has columns for date, explanation, post reference, debit, and credit is called the:

Accepted Answer

A) T account. 
B) standard account form. 
C) ledger. 
D) chart of accounts. 
A) T account. 
B) standard account form. 
C) ledger. 
D) chart of accounts.

Question 2

When the owner invests personal equipment in the business, cash is increased.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a financial statement?

Accepted Answer

A) Balance sheet 
B) Income statement 
C) Statement of owner's equity 
D) Trial balance 
A) Balance sheet 
B) Income statement 
C) Statement of owner's equity 
D) Trial balance

Question 4

The ledger is:

Accepted Answer

A) a group of accounts that records data from business transactions. 
B) a tool used to make sure that all accounts have normal balances. 
C) a chronological record of the day's transactions. 
D) a tool used to ensure that debits equal credits. 
A) a group of accounts that records data from business transactions. 
B) a tool used to make sure that all accounts have normal balances. 
C) a chronological record of the day's transactions. 
D) a tool used to ensure that debits equal credits.

Question 5

A compound entry is when more than one transaction occurs.

Accepted Answer

A) True 
 B)False

Question 6

The trial balance is a financial statement.

Accepted Answer

A) True 
 B)False

Question 7

An accounting device used to record increases and decreases in individual assets, liabilities, capital, revenue, expenses, and withdrawals is a(n):

Accepted Answer

A) chart of accounts. 
B) account. 
C) trial balance. 
D) footing. 
A) chart of accounts. 
B) account. 
C) trial balance. 
D) footing.

Question 8

An account that would be increased by a credit is:

Accepted Answer

A) Cash. 
B) Accounts Receivable. 
C) Utilities Expense. 
D) Accounts Payable. 
A) Cash. 
B) Accounts Receivable. 
C) Utilities Expense. 
D) Accounts Payable.

Question 9

The beginning balance in Cash was $3,500. Additional cash of $2,000 was received. Checks were written totaling $2,500. The cash balance is:

Accepted Answer

A) $2,000. 
B) $6,000. 
C) $4,500. 
D) $3,000. 
A) $2,000. 
B) $6,000. 
C) $4,500. 
D) $3,000.

Question 10

A liability would be credited and an expense debited if:

Accepted Answer

A) the business paid a creditor. 
B) the business incurred an expense and did not pay the expense immediately. 
C) the business bought supplies on account. 
D) the business bought supplies for cash. 
A) the business paid a creditor. 
B) the business incurred an expense and did not pay the expense immediately. 
C) the business bought supplies on account. 
D) the business bought supplies for cash.

Question 11

A chart of accounts:

Accepted Answer

A) is set up in alphabetical order. 
B) includes account balances. 
C) is a listing of all the accounts used by a company. 
D) All of the above are correct. 
A) is set up in alphabetical order. 
B) includes account balances. 
C) is a listing of all the accounts used by a company. 
D) All of the above are correct.

Question 12

The debit side of all accounts decreases the balance and the credit side increases all accounts.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following errors would cause the trial balance to be out of balance?

Accepted Answer

A) An entry is posted twice. 
B) An entry is not posted at all. 
C) A debit is entered as $200 and the credit is entered at $2,000. 
D) None of these answers are correct. 
A) An entry is posted twice. 
B) An entry is not posted at all. 
C) A debit is entered as $200 and the credit is entered at $2,000. 
D) None of these answers are correct.

Question 14

A ledger:

Accepted Answer

A) is a group of accounts and their balances. 
B) can replace the financial statements. 
C) is the same as a chart of accounts. 
D) None of these answers are correct. 
A) is a group of accounts and their balances. 
B) can replace the financial statements. 
C) is the same as a chart of accounts. 
D) None of these answers are correct.

Question 15

When recording transactions in two or more accounts and the totals of the debits and credits are equal, it is called:

Accepted Answer

A) debiting. 
B) crediting. 
C) posting. 
D) double-entry bookkeeping. 
A) debiting. 
B) crediting. 
C) posting. 
D) double-entry bookkeeping.

Question 16

Accounts Payable is an asset account that is increased on the credit side.

Accepted Answer

A) True 
 B)False

Question 17

Identify whether a debit or credit would be correct for each of the following account changes. Use a Dr. (debit)or Cr. (credit)in the space provided.
________ 1. Increase Delivery Van
________ 2. Decrease Accounts Receivable
________ 3. Decrease Accounts Payable
________ 4. Increase Salaries Expense
________ 5. Increase Service Fees
________ 6. Decrease Cash
________ 7. Increase S. McCrae, Capital
________ 8. Increase S. McCrae, Withdrawals
________ 9. Increase Rent Expense
________ 10. Decrease Equipment

Accepted Answer

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

Question 18

After deciding which accounts are affected, the next step in analyzing a transaction is to determine to which categories the accounts belong.

Accepted Answer

A) True 
 B)False

Question 19

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 20

A debit to an asset account was posted to a liability account. This error would cause:

Accepted Answer

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

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

A formal account that has columns for date, explanation, post reference, debit, and credit is called the:

When the owner invests personal equipment in the business, cash is increased.

Which of the following is not a financial statement?

The ledger is:

A compound entry is when more than one transaction occurs.

The trial balance is a financial statement.

An accounting device used to record increases and decreases in individual assets, liabilities, capital, revenue, expenses, and withdrawals is a(n):

An account that would be increased by a credit is:

The beginning balance in Cash was $3,500. Additional cash of $2,000 was received. Checks were written totaling $2,500. The cash balance is:

A liability would be credited and an expense debited if:

A chart of accounts:

The debit side of all accounts decreases the balance and the credit side increases all accounts.

Which of the following errors would cause the trial balance to be out of balance?

A ledger:

When recording transactions in two or more accounts and the totals of the debits and credits are equal, it is called:

Accounts Payable is an asset account that is increased on the credit side.

After deciding which accounts are affected, the next step in analyzing a transaction is to determine to which categories the accounts belong.

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. -

A debit to an asset account was posted to a liability account. This error would cause:

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

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