Question 1

Debits must always equal credits.

Accepted Answer

A) True 
 B)False

Question 2

The credit side is always the right side of the account.

Accepted Answer

A) True 
 B)False

Question 3

The right side of any account is the:

Accepted Answer

A) debit side. 
B) credit side. 
C) ending balance. 
D) footings. 
A) debit side. 
B) credit side. 
C) ending balance. 
D) footings.

Question 4

What would be the effect on accounts if the owner withdrew cash?

Accepted Answer

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

Question 5

Which of the following is prepared first?

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 6

Determine the beginning owner's equity of a business having beginning assets of $10,000, ending liabilities of $5,000. During the year the liabilities decreased by $1,000.
$ ________

Accepted Answer

$4,000 [$1

Question 7

Carrie flew to San Francisco on a business trip. The purchase price of the ticket was $422 and it was bought on account. The entry to record the transaction is:

Accepted Answer

A) debit Accounts Payable, $422; credit Travel Expense, $422. 
B) debit Capital, $422; credit Accounts Payable, $422. 
C) debit Travel Expense, $422; credit Accounts Payable, $422. 
D) debit Travel Expense, $422; credit Cash, $422. 
A) debit Accounts Payable, $422; credit Travel Expense, $422. 
B) debit Capital, $422; credit Accounts Payable, $422. 
C) debit Travel Expense, $422; credit Accounts Payable, $422. 
D) debit Travel Expense, $422; credit Cash, $422.

Question 8

Office Supplies had a normal starting balance of $75. There were debit postings of $80 and credit postings of $60 during the month. The ending balance is:

Accepted Answer

A) $55 debit. 
B) $55 credit. 
C) $95 debit. 
D) $95 credit. 
A) $55 debit. 
B) $55 credit. 
C) $95 debit. 
D) $95 credit.

Question 9

Determine the beginning owner's equity of a business having an ending owner's equity of $3,500, additional investments of $600 withdrawals of $500, and net loss of $750.
$ ________

Accepted Answer

$4,150 [$3

Question 10

What is X-cel Company's net income or net loss if it had Revenue of $1,800, Salary Expense of $500, Utility Expense of $250, and Withdrawals of $5,000 during October?

Accepted Answer

A) $50 net income 
B) $1,050 net loss 
C) $1,050 net income 
D) $50 net loss 
A) $50 net income 
B) $1,050 net loss 
C) $1,050 net income 
D) $50 net loss

Question 11

A debit may signify a(n):

Accepted Answer

A) increase in asset accounts. 
B) increase in liability accounts. 
C) increase in the capital account. 
D) decrease in expense accounts. 
A) increase in asset accounts. 
B) increase in liability accounts. 
C) increase in the capital account. 
D) decrease in expense accounts.

Question 12

The beginning balance in the Computers account was $2,000. The company purchased an additional $1000 worth of computers. The balance in the account is:

Accepted Answer

A) debit of $2,000. 
B) credit of $3,000. 
C) debit of $3,000. 
D) credit of $2,000. 
A) debit of $2,000. 
B) credit of $3,000. 
C) debit of $3,000. 
D) credit of $2,000.

Question 13

What would be the effect on accounts if the business provided services to a customer on account?

Accepted Answer

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

Question 14

An account is said to have a debit balance if:

Accepted Answer

A) the footing of the debits exceeds the footing of the credits. 
B) there are more entries on the debit side than on the credit side. 
C) its normal balance is debit without regard to the amounts or number of entries on the debit side. 
D) the last entry of the accounting period was posted on the debit side. 
A) the footing of the debits exceeds the footing of the credits. 
B) there are more entries on the debit side than on the credit side. 
C) its normal balance is debit without regard to the amounts or number of entries on the debit side. 
D) the last entry of the accounting period was posted on the debit side.

Question 15

A credit to an asset account was posted to a revenue account. This error would cause:

Accepted Answer

A) assets to be overstated. 
B) revenue to be overstated. 
C) expenses to be overstated. 
D) Both A and C are correct. 
A) assets to be overstated. 
B) revenue to be overstated. 
C) expenses to be overstated. 
D) Both A and C are correct.

Question 16

Which of the following groups of accounts have a normal credit balance?

Accepted Answer

A) Revenue, liabilities, and capital 
B) Assets, capital, and withdrawals 
C) Liabilities, expenses, and assets 
D) Assets, expenses, and withdrawals 
A) Revenue, liabilities, and capital 
B) Assets, capital, and withdrawals 
C) Liabilities, expenses, and assets 
D) Assets, expenses, and withdrawals

Question 17

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

Question 18

Selected accounts from the ledger of Thomas Company appear below. For each account, indicate the following:
a. In the first column at right, indicate the type of each account using the following abbreviations:
   b. In the second column, indicate the normal balance of the account by inserting a Dr. or Cr.

Accepted Answer

The answer of Selected accounts from the ledger of Thomas...

Question 19

A credit to a liability account was posted to an expense account. This error would cause:

Accepted Answer

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

Question 20

Only one account is affected in every transaction.

Accepted Answer

A) True 
 B)False

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

Debits must always equal credits.

The credit side is always the right side of the account.

The right side of any account is the:

What would be the effect on accounts if the owner withdrew cash?

Which of the following is prepared first?

Determine the beginning owner's equity of a business having beginning assets of $10,000, ending liabilities of $5,000. During the year the liabilities decreased by $1,000. $ ________

Carrie flew to San Francisco on a business trip. The purchase price of the ticket was $422 and it was bought on account. The entry to record the transaction is:

Office Supplies had a normal starting balance of $75. There were debit postings of $80 and credit postings of $60 during the month. The ending balance is:

Determine the beginning owner's equity of a business having an ending owner's equity of $3,500, additional investments of $600 withdrawals of $500, and net loss of $750. $ ________

What is X-cel Company's net income or net loss if it had Revenue of $1,800, Salary Expense of $500, Utility Expense of $250, and Withdrawals of $5,000 during October?

A debit may signify a(n):

The beginning balance in the Computers account was $2,000. The company purchased an additional $1000 worth of computers. The balance in the account is:

What would be the effect on accounts if the business provided services to a customer on account?

An account is said to have a debit balance if:

A credit to an asset account was posted to a revenue account. This error would cause:

Which of the following groups of accounts have a normal credit balance?

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

A credit to a liability account was posted to an expense account. This error would cause:

Only one account is affected in every transaction.

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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