Question 1

An account with a normal debit balance is most often an asset or revenue account.

Accepted Answer

A) True 
 B)False

Question 2

The T-account is only used by beginning accounting students.

Accepted Answer

A) True 
 B)False

Question 3

A company had credit sales of $30,000 and cash sales of $10,000 during the month of May. Also during May, the company paid wages of $1,000 and utilities of $800. It also received payments from customers on account totaling $4,000. What was the company's net income for the month?

Accepted Answer

A)  $10,000 
B)  $38,200 
C)  $41,000 
D)  $44,000 
A)  $10,000 
B)  $38,200 
C)  $41,000 
D)  $44,000

Question 4

When a business purchases land on account:

Accepted Answer

A)  both assets and stockholders' equity are increased. 
B)  assets are decreased and stockholder's equity is increased. 
C)  both assets and liabilities are increased. 
D)  assets are increased and liabilities are decreased. 
A)  both assets and stockholders' equity are increased. 
B)  assets are decreased and stockholder's equity is increased. 
C)  both assets and liabilities are increased. 
D)  assets are increased and liabilities are decreased.

Question 5

Posting is:

Accepted Answer

A)  copying the information from the journal to the trial balance. 
B)  entering the data into the journal. 
C)  copying the information from the journal to the ledger. 
D)  copying the information from the ledger to the financial statements. 
A)  copying the information from the journal to the trial balance. 
B)  entering the data into the journal. 
C)  copying the information from the journal to the ledger. 
D)  copying the information from the ledger to the financial statements.

Question 6

Each journal entry should contain a brief description of the transaction.

Accepted Answer

A) True 
 B)False

Question 7

The ledger is the book of original entry.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statement about the rules of debits and credits is correct?

Accepted Answer

A)  An asset is increased by a debit. 
B)  Dividends are decreased by debits. 
C)  A liability is increased by a debit. 
D)  Revenue is increased by a debit. 
A)  An asset is increased by a debit. 
B)  Dividends are decreased by debits. 
C)  A liability is increased by a debit. 
D)  Revenue is increased by a debit.

Question 9

If a journal entry debits Accounts Payable and credits Cash, it can be determined that:

Accepted Answer

A)  cash will have a credit balance. 
B)  accounts payable increased. 
C)  cash was increased. 
D)  accounts payable decreased. 
A)  cash will have a credit balance. 
B)  accounts payable increased. 
C)  cash was increased. 
D)  accounts payable decreased.

Question 10

An account is increased by a debit and has a debit balance. This account is:

Accepted Answer

A)  an expense account. 
B)  a liability account. 
C)  an asset account. 
D)  both an expense account and an asset account. 
A)  an expense account. 
B)  a liability account. 
C)  an asset account. 
D)  both an expense account and an asset account.

Question 11

Which accounts are increased by debits?

Accepted Answer

A)  Cash and accounts payable 
B)  Salaries expense and common stock. 
C)  Accounts receivable and utilities expense 
D)  Accounts payable and service revenue 
A)  Cash and accounts payable 
B)  Salaries expense and common stock. 
C)  Accounts receivable and utilities expense 
D)  Accounts payable and service revenue

Question 12

A company had credit sales of $30,000 and cash sales of $10,000 during the month of May. Also during May, the company paid wages of $1,000 and utilities of $800. It also received payments from customers on account totaling $4,000. At the beginning of May, the company had a cash balance of $25,000. What is the company's cash balance at the end of May?

Accepted Answer

A)  $23,200 
B)  $25,000 
C)  $37,200 
D)  $65,000 
A)  $23,200 
B)  $25,000 
C)  $37,200 
D)  $65,000

Question 13

An important rule to remember when analyzing the impact of business transactions on accounts is:

Accepted Answer

A)  net income increases stockholders' equity. 
B)  if expenses exceed revenues, the company will have a net income. 
C)  a net loss does not affect stockholders' equity. 
D)  stockholders' equity includes the two categories of income statement accounts, revenues and liabilities. 
A)  net income increases stockholders' equity. 
B)  if expenses exceed revenues, the company will have a net income. 
C)  a net loss does not affect stockholders' equity. 
D)  stockholders' equity includes the two categories of income statement accounts, revenues and liabilities.

Question 14

Below is the trial balance for Puff Toys.
     When trying to determine why the trial balance does not balance, it was discovered that:
1. Several of the accounts listed in the trial balance are in the wrong column. All accounts have normal balances.
2. The accountant forgot to record a credit to sales revenue of $1,000.
3. A transaction to record the payment of rent of $1,000 for the month was not recorded at all.
Required:
Prepare a corrected trial balance in good form.

Accepted Answer

The answer of Below is the trial balance for Puff...

Question 15

Which error will be uncovered by a trial balance?

Accepted Answer

A)  The bookkeeper recorded the same journal entry three times. 
B)  The bookkeeper forgot to record a journal entry for a large amount. 
C)  The bookkeeper recorded both the debit and credit of a journal entry as $200 instead of $700. 
D)  The bookkeeper recorded a journal entry with a debit of $400 and a credit of $930. 
A)  The bookkeeper recorded the same journal entry three times. 
B)  The bookkeeper forgot to record a journal entry for a large amount. 
C)  The bookkeeper recorded both the debit and credit of a journal entry as $200 instead of $700. 
D)  The bookkeeper recorded a journal entry with a debit of $400 and a credit of $930.

Question 16

The journalizing process involves all of the following steps except for:

Accepted Answer

A)  determining whether each account is increased or decreased by the transaction. 
B)  copying the information from the journal to the ledger. 
C)  entering the debit side on the left margin of the journal. 
D)  specifying each account affected by the transaction and classifying the account by type. 
A)  determining whether each account is increased or decreased by the transaction. 
B)  copying the information from the journal to the ledger. 
C)  entering the debit side on the left margin of the journal. 
D)  specifying each account affected by the transaction and classifying the account by type.

Question 17

The ledger:

Accepted Answer

A)  is a grouping of all of the balance sheet accounts. 
B)  is a grouping of all the T-accounts, with their balances. 
C)  contains the same information in the same format as the journal. 
D)  is used only by large corporations. 
A)  is a grouping of all of the balance sheet accounts. 
B)  is a grouping of all the T-accounts, with their balances. 
C)  contains the same information in the same format as the journal. 
D)  is used only by large corporations.

Question 18

The total debits to an account must equal the total credits to the account.

Accepted Answer

A) True 
 B)False

Question 19

Although a trial balance can be taken at any time, the most common time is at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 20

Notes payable, accounts payable, taxes payable and salaries payable are all examples of:

Accepted Answer

A)  liabilities. 
B)  revenues. 
C)  expenses. 
D)  assets. 
A)  liabilities. 
B)  revenues. 
C)  expenses. 
D)  assets.

An account with a normal debit balance is most often an asset or revenue account.

The T-account is only used by beginning accounting students.

A company had credit sales of $30,000 and cash sales of $10,000 during the month of May. Also during May, the company paid wages of $1,000 and utilities of $800. It also received payments from customers on account totaling $4,000. What was the company's net income for the month?

When a business purchases land on account:

Posting is:

Each journal entry should contain a brief description of the transaction.

The ledger is the book of original entry.

Which of the following statement about the rules of debits and credits is correct?

If a journal entry debits Accounts Payable and credits Cash, it can be determined that:

An account is increased by a debit and has a debit balance. This account is:

Which accounts are increased by debits?

An important rule to remember when analyzing the impact of business transactions on accounts is:

Which error will be uncovered by a trial balance?

The journalizing process involves all of the following steps except for:

The ledger:

The total debits to an account must equal the total credits to the account.

Although a trial balance can be taken at any time, the most common time is at the end of the accounting period.

Notes payable, accounts payable, taxes payable and salaries payable are all examples of:

The Financial Statements

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

The Income Statement, the Statement of Comprehensive Income, the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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Exam 2: Transaction Analysis

An account with a normal debit balance is most often an asset or revenue account.

The T-account is only used by beginning accounting students.

A company had credit sales of $30,000 and cash sales of $10,000 during the month of May. Also during May, the company paid wages of $1,000 and utilities of $800. It also received payments from customers on account totaling $4,000. What was the company's net income for the month?

When a business purchases land on account:

Posting is:

Each journal entry should contain a brief description of the transaction.

The ledger is the book of original entry.

Which of the following statement about the rules of debits and credits is correct?

If a journal entry debits Accounts Payable and credits Cash, it can be determined that:

An account is increased by a debit and has a debit balance. This account is:

Which accounts are increased by debits?

An important rule to remember when analyzing the impact of business transactions on accounts is:

Which error will be uncovered by a trial balance?

The journalizing process involves all of the following steps except for:

The ledger:

The total debits to an account must equal the total credits to the account.

Although a trial balance can be taken at any time, the most common time is at the end of the accounting period.

Notes payable, accounts payable, taxes payable and salaries payable are all examples of:

The Financial Statements

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

The Income Statement, the Statement of Comprehensive Income, the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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