Question 1

An account is a detailed record of all increases and decreases that have occurred in an individual asset,liability,or equity during a specific period.

Accepted Answer

A) True 
 B)False  True

Question 2

Baytown Paper Company has a debt ratio of 25%,which means that 75% of the assets are financed by creditors.

Accepted Answer

A) True 
 B)False  False

Question 3

Liabilities are economic resources that are expected to benefit the business in the future.

Accepted Answer

A) True 
 B)False  False

Question 4

A note receivable represents an oral promise that a customer will pay a fixed amount of money and interest by a certain date in the future.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is the order of steps to journalize an entry?

Accepted Answer

A)  Identify the accounts and the account type → Decide whether each account increases or decreases, then apply the rules of debits and credits → Record the transaction 
B)  Identify the accounts and the account type → Record the transaction → Decide whether each account increases or decreases, then apply the rules of debits and credits 
C)  Record the transaction → Identify the accounts and the account type → Decide whether each account increases or decreases, then apply the rules of debits and credits 
D)  Decide whether each account increases or decreases, then apply the rules of debits and credits → Identify the accounts and the account type → Record the transaction 
A)  Identify the accounts and the account type → Decide whether each account increases or decreases, then apply the rules of debits and credits → Record the transaction 
B)  Identify the accounts and the account type → Record the transaction → Decide whether each account increases or decreases, then apply the rules of debits and credits 
C)  Record the transaction → Identify the accounts and the account type → Decide whether each account increases or decreases, then apply the rules of debits and credits 
D)  Decide whether each account increases or decreases, then apply the rules of debits and credits → Identify the accounts and the account type → Record the transaction

Question 6

Which of the following statements is TRUE of a trial balance?

Accepted Answer

A)  A trial balance is the first step in the accounting cycle. 
B)  A trial balance is also known as a balance sheet. 
C)  A trial balance is a list of all accounts with their balances. 
D)  A trial balance is also known as the chart of accounts. 
A)  A trial balance is the first step in the accounting cycle. 
B)  A trial balance is also known as a balance sheet. 
C)  A trial balance is a list of all accounts with their balances. 
D)  A trial balance is also known as the chart of accounts.

Question 7

Data from a trial balance is used to prepare the income statement,statement of owner's equity,and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

When a business records an accrued utility liability,the Utilities Expense account is credited.

Accepted Answer

A) True 
 B)False

Question 9

A business makes a cash payment to a supplier for office supplies that were purchased earlier on account.Which of the following accounts is debited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Office Supplies Expense 
A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Office Supplies Expense

Question 10

Provide a definition of each of the following accounting terms.
 $$\begin{array} { | l | l | } 
\hline \text { Accounting Term } & \text { Definition } \
\hline \text { Compound journal entry } & \
\hline \text { Journal } & \
\hline \text { Account } & \
\hline
\end{array}$$

Accepted Answer

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

Question 11

Journalizing a transaction involves ________.

Accepted Answer

A)  calculating the balance in an account using journal entries 
B)  posting the account balances in the chart of accounts 
C)  preparing a summary of account balances 
D)  recording the data only in the journal 
A)  calculating the balance in an account using journal entries 
B)  posting the account balances in the chart of accounts 
C)  preparing a summary of account balances 
D)  recording the data only in the journal

Question 12

Which of the following is the final step in the journalizing and posting process?

Accepted Answer

A)  Posting the accounts to the ledger. 
B)  Identifying each account affected and its type. 
C)  Determining whether the accounting equation is in balance. 
D)  Determining whether each account has increased or decreased. 
A)  Posting the accounts to the ledger. 
B)  Identifying each account affected and its type. 
C)  Determining whether the accounting equation is in balance. 
D)  Determining whether each account has increased or decreased.

Question 13

Consider the following accounts and identify each as an asset (A),liability (L),or equity (E).
 $$\begin{array} { | l | l | } 
\hline \text { Smith, Capital } &\quad\quad\quad\quad\quad \
\hline \text { Unearned Revenue } & \
\hline \text { Building } & \
\hline \text { Interest Revenue } & \
\hline \text { Prepaid Advertising } & \
\hline
\end{array}$$

Accepted Answer

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

Question 14

A business performs services for $26,000 and collects cash from the customer.Which of the following accounts will be 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

Which of the following accounts is an asset?

Accepted Answer

A)  Salaries Expense 
B)  Accounts Payable 
C)  Service Revenue 
D)  Prepaid Expense 
A)  Salaries Expense 
B)  Accounts Payable 
C)  Service Revenue 
D)  Prepaid Expense

Question 16

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance.

Accepted Answer

A) True 
 B)False

Question 17

The accounting equation is made up of four parts or categories.

Accepted Answer

A) True 
 B)False

Question 18

A business makes a payment in cash for advertising expense.Which of the following accounts is credited?

Accepted Answer

A)  Prepaid Advertising 
B)  Accounts Receivable 
C)  Cash 
D)  Advertising Expense 
A)  Prepaid Advertising 
B)  Accounts Receivable 
C)  Cash 
D)  Advertising Expense

Question 19

Provide an explanation for each of the follow liability accounts.
 $$\begin{array} { | l | l | } 
\hline \text { Account Name } & \text { Explanation } \
\hline \text { Accounts Payable } & \
\hline & \
\text { Accrued Liability } & \
\hline & \
\text { Unearned Revenue } & \
\hline
\end{array}$$

Accepted Answer

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

Question 20

The account title used for recording a written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is ________.

Accepted Answer

A)  Prepaid Note 
B)  Notes Payable 
C)  Notes Receivable 
D)  Accounts Receivable 
A)  Prepaid Note 
B)  Notes Payable 
C)  Notes Receivable 
D)  Accounts Receivable

Exam 2: Recording Business Transactions

An account is a detailed record of all increases and decreases that have occurred in an individual asset,liability,or equity during a specific period.

Baytown Paper Company has a debt ratio of 25%,which means that 75% of the assets are financed by creditors.

Liabilities are economic resources that are expected to benefit the business in the future.

A note receivable represents an oral promise that a customer will pay a fixed amount of money and interest by a certain date in the future.

Which of the following is the order of steps to journalize an entry?

Which of the following statements is TRUE of a trial balance?

Data from a trial balance is used to prepare the income statement,statement of owner's equity,and the balance sheet.

When a business records an accrued utility liability,the Utilities Expense account is credited.

A business makes a cash payment to a supplier for office supplies that were purchased earlier on account.Which of the following accounts is debited?

Provide a definition of each of the following accounting terms. Accounting Term Definition Compound journal entry Journal Account

Journalizing a transaction involves ________.

Which of the following is the final step in the journalizing and posting process?

Consider the following accounts and identify each as an asset (A),liability (L),or equity (E). Smith, Capital Unearned Revenue Building Interest Revenue Prepaid Advertising

A business performs services for $26,000 and collects cash from the customer.Which of the following accounts will be debited?

Which of the following accounts is an asset?

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance.

The accounting equation is made up of four parts or categories.

A business makes a payment in cash for advertising expense.Which of the following accounts is credited?

Provide an explanation for each of the follow liability accounts. Account Name Explanation Accounts Payable Accrued Liability Unearned Revenue

The account title used for recording a written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is ________.

Accounting and the Business Environment

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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