Question 1

The normal balance of an account is the increase side of the account.

Accepted Answer

A) True 
 B)False

Question 2

The four-column account ________.

Accepted Answer

A)  is an alternative to using the ledger 
B)  includes the Post. Ref. column which allows a user of the financial data to trace the amount in the journal back to the ledger 
C)  is not frequently used in practice because it provides less information than T-accounts 
D)  adds two additional columns that are used to determine a running balance 
A)  is an alternative to using the ledger 
B)  includes the Post. Ref. column which allows a user of the financial data to trace the amount in the journal back to the ledger 
C)  is not frequently used in practice because it provides less information than T-accounts 
D)  adds two additional columns that are used to determine a running balance

Question 3

The T-account is a summary device that is shaped like a capital T with debits posted on the right side of the vertical line and credits posted on the left side of the vertical line.

Accepted Answer

A) True 
 B)False

Question 4

Source documents provide the evidence and data for accounting transactions.

Accepted Answer

A) True 
 B)False

Question 5

Owner,Withdrawals is a(n)________ account that has a normal ________ balance.

Accepted Answer

A)  liability; credit 
B)  equity; debit 
C)  liability; debit 
D)  equity; credit 
A)  liability; credit 
B)  equity; debit 
C)  liability; debit 
D)  equity; credit

Question 6

When a business records the earning of service revenue,the Service Revenue account is credited.

Accepted Answer

A) True 
 B)False

Question 7

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

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 8

A posting reference column is used ________.

Accepted Answer

A)  while preparing the trial balance using the ledger 
B)  when the information is transferred from the journal to the ledger 
C)  when the information is transferred from the ledger to the post-closing trial balance 
D)  while preparing the balance sheet using the trial balance 
A)  while preparing the trial balance using the ledger 
B)  when the information is transferred from the journal to the ledger 
C)  when the information is transferred from the ledger to the post-closing trial balance 
D)  while preparing the balance sheet using the trial balance

Question 9

The following are selected current month's balances for Morgan Company. $$\begin{array} { | l | r | } 
\hline \text { Accounts Payable } & \$ 8,000 \
\hline \text { Revenue } & 12,000 \
\hline \text { Cash } & 6,450 \
\hline \text { Expenses } & 1,300 \
\hline \text { Furniture } & 11,000 \
\hline \text { Accounts Receivable } & 14,000 \
\hline \text { Morgan, Capital } & 7,250 \
\hline \text { Notes Payable } & 5,500 \
\hline
\end{array}$$ Based on this information,calculate the total amount of credits for the trial balance.

Accepted Answer

A)  $25,500 
B)  $20,750 
C)  $24,750 
D)  $32,750 
A)  $25,500 
B)  $20,750 
C)  $24,750 
D)  $32,750

Question 10

A sole proprietorship has the following transactions: The business receives $20,000 cash from the owner in exchange for capital.
The business purchases $700 of office supplies on account.
The business purchases $4,000 of furniture on account.
The business performs services for various clients totaling $11,000 on account.
The business pays $2,500 for salaries expense and $3,500 for rent expense.
The business pays $700 to a supplier for the office supplies purchased earlier.
The business collects $2,000 from one of its clients for services rendered earlier in the month.
At the end of the month,all journal entries are posted to the ledger.Accounts Receivable will appear as which of the following?

Accepted Answer

A)  Accounts Receivable $$\begin{array} { r | r r } 
\hline 2,000 & 11,000& \
\hline & 9,000 & \mathrm { Bal }
\end{array}$$ 
B)  Accounts Receivable $$\begin{array} { | l | l | } 
\hline & 11,000 \
\hline \text { Bal. } & 11,000 \
\hline
\end{array}$$ 
C)  Accounts Receivable $$\begin{array} { | r | r | r | } 
\hline & 11,000 & 2,000 \
\hline \text { Bal. } & 9,000 & \
\hline
\end{array}$$ 
D)  Accounts Receivable $$\begin{array} { c | c c } 
\hline 11,000 & 2,000 & \
\hline & 9,000& \mathrm { Bal. } \
\hline
\end{array}$$ 
A)  Accounts Receivable $$\begin{array} { r | r r } 
\hline 2,000 & 11,000& \
\hline & 9,000 & \mathrm { Bal }
\end{array}$$ 
B)  Accounts Receivable $$\begin{array} { | l | l | } 
\hline & 11,000 \
\hline \text { Bal. } & 11,000 \
\hline
\end{array}$$ 
C)  Accounts Receivable $$\begin{array} { | r | r | r | } 
\hline & 11,000 & 2,000 \
\hline \text { Bal. } & 9,000 & \
\hline
\end{array}$$ 
D)  Accounts Receivable $$\begin{array} { c | c c } 
\hline 11,000 & 2,000 & \
\hline & 9,000& \mathrm { Bal. } \
\hline
\end{array}$$

Question 11

An account that normally has a debit balance may occasionally have a credit balance.

Accepted Answer

A) True 
 B)False

Question 12

Unearned Revenue is a liability account.

Accepted Answer

A) True 
 B)False

Question 13

A debit always means a decrease,and a credit always means an increase.

Accepted Answer

A) True 
 B)False

Question 14

List the four steps in the flow of accounting data.

Accepted Answer

1.transactions occur
2.source

Question 15

Which of the following accounts increases with a credit?

Accepted Answer

A)  Owner, Withdrawals 
B)  Owner, Capital 
C)  Accounts Receivable 
D)  Prepaid Expense 
A)  Owner, Withdrawals 
B)  Owner, Capital 
C)  Accounts Receivable 
D)  Prepaid Expense

Question 16

Randall's Service Company began operations on January 1,2019.The following Trial Balance was prepared on December 31,2019.Capital contributions during the year were $58,000. Randall's Service Company
Trial Balance
December 31, 2019
 $\begin{array}{lc}
\text { Account Title}&\text { Debit}&\text { Credit}\
\text { Cash } & \$ 25,400 \
\text { Accounts Receivable } & 5,000 \
\text { Prepaid Rent } & 1,200 \
\text { Office Supplies } & 3,400 \
\text { Land } & 45,000 \
\text { Building } & 16,500 \
\text { Equipment } & 23,000\
\text { Accounts Payable } && \$ 15,000 \
\text { Unearned Revenue } && 5,000 \
\text { Notes Payable } && 25,000 \
\text { Randall, Capital } && 58,000\
\text { Randall, Withdrawals } & 6,700 \
\text { Service Revenue } &&80,300 \
\text { Salaries Expense } & 35,000 \
\text { Rent Expense } & 15.000\
\text { Office Expense } & 6,000 \
\text { Repair Expense } & \underline{1,100}&\underline{\quad\quad} \
\text { Total } & \underline{ \$ 183,300}& \underline{ \$ 183,300} 
\end{array}$  What is the December 31,2019 balance of Randall,Capital?

Accepted Answer

A)  $58,000 
B)  $51,300 
C)  $74,500 
D)  $16,500 
A)  $58,000 
B)  $51,300 
C)  $74,500 
D)  $16,500

Question 17

A business renders services to a client and issues a sales invoice.The amount will be collected from the customer at a later time.Which of the following is TRUE at the time the invoice is issued?

Accepted Answer

A)  Equity will decrease. 
B)  Total liabilities will increase. 
C)  Total assets will decrease. 
D)  Net income will increase. 
A)  Equity will decrease. 
B)  Total liabilities will increase. 
C)  Total assets will decrease. 
D)  Net income will increase.

Question 18

When a business makes a cash payment,the Cash account is debited.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following sequences is the normal sequence of flow of accounting data?

Accepted Answer

A)  Ledger → Journal → Source document 
B)  Journal → Source document → Ledger 
C)  Source document → Journal → Ledger 
D)  Source document → Ledger → Journal 
A)  Ledger → Journal → Source document 
B)  Journal → Source document → Ledger 
C)  Source document → Journal → Ledger 
D)  Source document → Ledger → Journal

Question 20

Converse Florists & Co.reported assets of $1,100 and equity of $500.What is its debt ratio? (Round your percentage answer to two decimal places.)

Accepted Answer

A)  54.55% 
B)  45.45% 
C)  100.00% 
D)  59.55% 
A)  54.55% 
B)  45.45% 
C)  100.00% 
D)  59.55%

Exam 2: Recording Business Transactions

The normal balance of an account is the increase side of the account.

The four-column account ________.

The T-account is a summary device that is shaped like a capital T with debits posted on the right side of the vertical line and credits posted on the left side of the vertical line.

Source documents provide the evidence and data for accounting transactions.

Owner,Withdrawals is a(n)________ account that has a normal ________ balance.

When a business records the earning of service revenue,the Service Revenue account is credited.

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

A posting reference column is used ________.

An account that normally has a debit balance may occasionally have a credit balance.

Unearned Revenue is a liability account.

A debit always means a decrease,and a credit always means an increase.

List the four steps in the flow of accounting data.

Which of the following accounts increases with a credit?

A business renders services to a client and issues a sales invoice.The amount will be collected from the customer at a later time.Which of the following is TRUE at the time the invoice is issued?

When a business makes a cash payment,the Cash account is debited.

Which of the following sequences is the normal sequence of flow of accounting data?

Converse Florists & Co.reported assets of $1,100 and equity of $500.What is its debt ratio? (Round your percentage answer to two decimal places.)

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

Filters

Owner,Withdrawals is a(n) account that has a normal balance.