Question 1

Which of the following is an asset account?

Accepted Answer

A)  Wages Payable 
B)  Notes Payable 
C)  Unearned Revenue 
D)  Accounts Receivable 
A)  Wages Payable 
B)  Notes Payable 
C)  Unearned Revenue 
D)  Accounts Receivable

Question 2

The trial balance is also known as the balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

The left side of the T-account for Accounts Receivable is the debit side and the left side of the T-account for Accounts Payable is the credit side.

Accepted Answer

A) True 
 B)False

Question 4

A chart of accounts provides more detail than a ledger.

Accepted Answer

A) True 
 B)False

Question 5

A business collects cash from a customer for services that were performed one month earlier.Which of the following accounts is 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 6

Regarding the double-entry system,which of the following statements is incorrect?

Accepted Answer

A)  A transaction would be incomplete if only one side were recorded. 
B)  Because of technology, the use of the double-entry system of accounting is optional. 
C)  The double-entry system is a system of accounting in which every transaction affects at least two accounts. 
D)  If office supplies are purchased on account, the account Office Supplies increases and the account Accounts Payable increases. 
A)  A transaction would be incomplete if only one side were recorded. 
B)  Because of technology, the use of the double-entry system of accounting is optional. 
C)  The double-entry system is a system of accounting in which every transaction affects at least two accounts. 
D)  If office supplies are purchased on account, the account Office Supplies increases and the account Accounts Payable increases.

Question 7

In reviewing the T-account for Accounts Payable,you find that the beginning balance is zero,the total increases are $7,200 and the total decreases are $4,000.This means that the ending balance of the account is a credit balance of $3,200.

Accepted Answer

A) True 
 B)False

Question 8

Mason's Restaurant and Catering is a sole proprietorship owned by Michael Mason.The business had the following transactions during the month of May.
 May 1 Mason contributed $\$ 45,000$ cash in exchange for capital.
 $\quad $ $\quad $5 Paid monthly rent on the restaurant equipment, $\$ 1,650$.
 $\quad $ $\quad $12 Purchased office supplies on account, $\$ 1,500$.
 $\quad $ $\quad $15 Borrowed $\$ 25,000$ from the bank for business use.
 $\quad $ $\quad $26 Paid $\$ 30,000$ cash for a delivery van.
 $\quad $ $\quad $28 Paid $\$ 1,500$ on account.
 $\quad $ $\quad $29 The business received $\$ 1,600$ for catering services for a wedding on June 11 .
 $\quad $ $\quad $31 Revenues earned during the month included $\$ 20,500$ cash and $\$ 14,500$ on account.
Received the May utility bill for $\$ 1,000$. The amount is due on June 10 and will be paid 31 on that date.
 $\quad $ $\quad $31 Paid employees' salaries $\$ 5,500$; restaurant rent $\$ 3,000$ and advertising for May $\$ 800$.
 $\quad $ $\quad $Record a compound entry.
 $\quad $ $\quad $Received the bill for catering food and supplies used in May, $\$ 8,500$.
 $\quad $ $\quad $31 The bill is due on June 15 and will be paid on that date
 $\quad $ $\quad $31 Michael Mason withdrew $\$ 6,000$ cash from the business for personal use. The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Delivery Van; Accounts Payable; Utilities Payable; Unearned Revenue; Notes Payable; Mason,Capital; Mason,Withdrawals; Service Revenue; Salaries Expense; Equipment Rent Expense; Restaurant Rent Expense; Utilities Expense; Catering Expense; and Advertising Expense.
Required: Journalize each transaction.Explanations are not needed.

Accepted Answer

@#IMG-DLM& \[\begin{array} { | l | l | r | r | }

Question 9

"All debits are increases and all credits are decreases." Is this a correct statement? Explain your answer.

Accepted Answer

This is not a correct statement.The doub

Question 10

Which of the following is a source document that provides the evidence and data for accounting transactions?

Accepted Answer

A)  Journal 
B)  Sales invoice 
C)  Ledger 
D)  Trial balance 
A)  Journal 
B)  Sales invoice 
C)  Ledger 
D)  Trial balance

Question 11

The first step in the flow of accounting data is the preparation of source documents.

Accepted Answer

A) True 
 B)False

Question 12

A business purchases $1,000 of office supplies on account.Which of the following accounts is debited?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Prepaid Asset 
A)  Cash 
B)  Accounts Payable 
C)  Office Supplies 
D)  Prepaid Asset

Question 13

An owner's withdrawals and expenses increase owner's equity.

Accepted Answer

A) True 
 B)False

Question 14

The system of accounting in which every transaction affects at least two accounts is called the double-entry system.

Accepted Answer

A) True 
 B)False

Question 15

A chart of accounts is a list of all of a company's accounts with their account numbers.

Accepted Answer

A) True 
 B)False

Question 16

An accounting entry that is characterized by having multiple debits and/or multiple credits is called a ________ entry.

Accepted Answer

A)  balanced 
B)  posted 
C)  chart of accounts 
D)  compound journal 
A)  balanced 
B)  posted 
C)  chart of accounts 
D)  compound journal

Question 17

Explain the difference between Prepaid Rent and Unearned Revenue.

Accepted Answer

Prepaid Rent is an asset account that re

Question 18

A business performs services for a customer for $26,000 on account.Which of the following accounts is 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 19

A business purchases $500 of office supplies on account.What is the effect on the accounting equation?

Accepted Answer

A)  Office Supplies increase and Cash decreases 
B)  Office Supplies increase and Accounts Payable increase 
C)  Office Supplies increase and Accounts Payable decrease 
D)  Total assets increase and total liabilities decrease 
A)  Office Supplies increase and Cash decreases 
B)  Office Supplies increase and Accounts Payable increase 
C)  Office Supplies increase and Accounts Payable decrease 
D)  Total assets increase and total liabilities decrease

Question 20

Durable Plastics Company had the following total assets,liabilities,and equity as of December 31. $$\begin{array} { | l | r | } 
\hline \text { Total Assets } & \$ 420,000 \
\hline \text { Total Liabilities } & 133,000 \
\hline \text { Total Equity } & 287,000 \
\hline
\end{array}$$ What is the company's debt ratio as of December 31? (Round your percentage answer to two decimal places.)

Accepted Answer

A)  31.67% 
B)  68.33% 
C)  100.00% 
D)  46.34% 
A)  31.67% 
B)  68.33% 
C)  100.00% 
D)  46.34%

Exam 2: Recording Business Transactions

Which of the following is an asset account?

The trial balance is also known as the balance sheet.

The left side of the T-account for Accounts Receivable is the debit side and the left side of the T-account for Accounts Payable is the credit side.

A chart of accounts provides more detail than a ledger.

A business collects cash from a customer for services that were performed one month earlier.Which of the following accounts is debited?

Regarding the double-entry system,which of the following statements is incorrect?

In reviewing the T-account for Accounts Payable,you find that the beginning balance is zero,the total increases are $7,200 and the total decreases are $4,000.This means that the ending balance of the account is a credit balance of $3,200.

"All debits are increases and all credits are decreases." Is this a correct statement? Explain your answer.

Which of the following is a source document that provides the evidence and data for accounting transactions?

The first step in the flow of accounting data is the preparation of source documents.

A business purchases $1,000 of office supplies on account.Which of the following accounts is debited?

An owner's withdrawals and expenses increase owner's equity.

The system of accounting in which every transaction affects at least two accounts is called the double-entry system.

A chart of accounts is a list of all of a company's accounts with their account numbers.

An accounting entry that is characterized by having multiple debits and/or multiple credits is called a ________ entry.

Explain the difference between Prepaid Rent and Unearned Revenue.

A business performs services for a customer for $26,000 on account.Which of the following accounts is debited?

A business purchases $500 of office supplies on account.What is the effect on the accounting equation?

Durable Plastics Company had the following total assets,liabilities,and equity as of December 31. Total Assets \ 420,000 Total Liabilities 133,000 Total Equity 287,000 What is the company's debt ratio as of December 31? (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

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