Question 1

The account names in the chart of accounts are standardized and thus are the same for all businesses.

Accepted Answer

A) True 
 B)False

Question 2

On October 31,a business pays $1,500 cash for television ads that appeared during October.Which of the following accounts is debited?

Accepted Answer

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

Question 3

The Owner,Capital account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 4

A sole proprietorship has the following transactions: The business received $20,000 cash from the owner in exchange for capital.
The business purchases $600 of office supplies on account.
The business purchases $3,000 of furniture on account.
The business performs services to various clients totaling $11,000 on account.
The business pays out $3,000 for salaries expense and $4,500 for rent expense.
The business pays $600 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 Payable will appear as
Which of the following?

Accepted Answer

A)  Accounts Payable $$\begin{array} { r | r r } 
600 & 600 & \
&3,000 & \
\hline & 3,000& \mathrm { Bal. } \
\hline
\end{array}$$ 
B)  Accounts Payable $$\begin{array} { r | r r } 
\hline & 600& \
& 3,000 & \
\hline & 3,600 & \mathrm { Bal. } \
\hline
\end{array}$$ 
C)  Accounts Payable $$\begin{array} { l | r | r } 
& 600 & \
& 3,000 & \
& & 600 \
\hline \text { Bal. } & 3,000 & \
\hline
\end{array}$$ 
D)  Accounts Payable $$\begin{array} { r | r r } 
& 600& \
& 3,000& \
&600 & \
\hline & 4,200 & \mathrm { Bal. } \
\hline
\end{array}$$ 
A)  Accounts Payable $$\begin{array} { r | r r } 
600 & 600 & \
&3,000 & \
\hline & 3,000& \mathrm { Bal. } \
\hline
\end{array}$$ 
B)  Accounts Payable $$\begin{array} { r | r r } 
\hline & 600& \
& 3,000 & \
\hline & 3,600 & \mathrm { Bal. } \
\hline
\end{array}$$ 
C)  Accounts Payable $$\begin{array} { l | r | r } 
& 600 & \
& 3,000 & \
& & 600 \
\hline \text { Bal. } & 3,000 & \
\hline
\end{array}$$ 
D)  Accounts Payable $$\begin{array} { r | r r } 
& 600& \
& 3,000& \
&600 & \
\hline & 4,200 & \mathrm { Bal. } \
\hline
\end{array}$$

Question 5

Consider the following accounts and identify each as an asset (A),liability (L),or equity (E).
 $$\begin{array} { | l | l | } 
\hline \text { Owner, Withdrawals } &\quad\quad\quad\quad \
\hline \text { Unearned Revenue } & \
\hline \text { Office Supplies } & \
\hline \text { Rent Expense } & \
\hline \text { Accounts Receivable } & \
\hline
\end{array}$$

Accepted Answer

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

Question 6

Which of the following sequences states the order in which accounts are listed on a trial balance?

Accepted Answer

A)  Equity → Assets → Liabilities 
B)  Liabilities → Assets → Equity 
C)  Assets → Equity → Liabilities 
D)  Assets → Liabilities → Equity 
A)  Equity → Assets → Liabilities 
B)  Liabilities → Assets → Equity 
C)  Assets → Equity → Liabilities 
D)  Assets → Liabilities → Equity

Question 7

When using a four-column account,the posting reference column allows the user of the financial data to trace the amounts in the journal back to the ledger.

Accepted Answer

A) True 
 B)False

Question 8

State whether the normal balance of each of the following accounts is a debit or credit.
 $$\begin{array} { | l | l | } 
\hline \text { Account } & \text { Normal Balance } \
\hline \text { Service Revenue } & \
\hline \text { Tones, Withdrawals } & \
\hline \text { Accounts Payable } & \
\hline \text { Prepaid Insurance } & \
\hline
\end{array}$$

Accepted Answer

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

Question 9

When a business collects cash,the Cash account is debited.

Accepted Answer

A) True 
 B)False

Question 10

Prepaid Rent is a(n)________ account and has a normal ________ balance.

Accepted Answer

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

Question 11

A business performs services for its customer for $50,000 on account.Record the transaction in the journal.

Accepted Answer

\[\begin{array} { | l | r | r | } 
\hlin

Question 12

The trial balance is an internal document used only by employees of the company.

Accepted Answer

A) True 
 B)False

Question 13

A bank deposit slip is a source document that shows the total of all checks written by a company.

Accepted Answer

A) True 
 B)False

Question 14

A business pays $800 cash for office supplies.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 15

Revenues and the owner's contributions in the business increase owner's equity.

Accepted Answer

A) True 
 B)False

Question 16

Amounts earned from delivering goods or services to customers are called ________.

Accepted Answer

A)  notes receivable 
B)  unearned revenues 
C)  withdrawals 
D)  revenues 
A)  notes receivable 
B)  unearned revenues 
C)  withdrawals 
D)  revenues

Question 17

Which of the following statements regarding the accounting equation is incorrect?

Accepted Answer

A)  The equation is the basic tool of accounting. 
B)  The equation consists of three categories: assets, liabilities, and equity. 
C)  Each category of the accounting equation contains accounts. 
D)  The equation can be stated as assets plus liabilities equals equity. 
A)  The equation is the basic tool of accounting. 
B)  The equation consists of three categories: assets, liabilities, and equity. 
C)  Each category of the accounting equation contains accounts. 
D)  The equation can be stated as assets plus liabilities equals equity.

Question 18

The Accounts Payable account of Waterford Company has the following postings:   Calculate the ending balance of the account.

Accepted Answer

A)  $14,000 credit 
B)  $18,000 debit 
C)  $18,000 credit 
D)  $7,000 debit 
A)  $14,000 credit 
B)  $18,000 debit 
C)  $18,000 credit 
D)  $7,000 debit

Question 19

The proportion of assets that are financed with debt can be calculated using the ________ ratio.

Accepted Answer

A)  quick 
B)  debt 
C)  asset 
D)  cash 
A)  quick 
B)  debt 
C)  asset 
D)  cash

Question 20

A T-account is a summary device with credits posted on the left side of the vertical line.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

The account names in the chart of accounts are standardized and thus are the same for all businesses.

On October 31,a business pays $1,500 cash for television ads that appeared during October.Which of the following accounts is debited?

The Owner,Capital account is increased by a debit.

Consider the following accounts and identify each as an asset (A),liability (L),or equity (E). Owner, Withdrawals Unearned Revenue Office Supplies Rent Expense Accounts Receivable

Which of the following sequences states the order in which accounts are listed on a trial balance?

When using a four-column account,the posting reference column allows the user of the financial data to trace the amounts in the journal back to the ledger.

State whether the normal balance of each of the following accounts is a debit or credit. Account Normal Balance Service Revenue Tones, Withdrawals Accounts Payable Prepaid Insurance

When a business collects cash,the Cash account is debited.

Prepaid Rent is a(n)________ account and has a normal ________ balance.

A business performs services for its customer for $50,000 on account.Record the transaction in the journal.

The trial balance is an internal document used only by employees of the company.

A bank deposit slip is a source document that shows the total of all checks written by a company.

A business pays $800 cash for office supplies.Which of the following accounts is credited?

Revenues and the owner's contributions in the business increase owner's equity.

Amounts earned from delivering goods or services to customers are called ________.

Which of the following statements regarding the accounting equation is incorrect?

The Accounts Payable account of Waterford Company has the following postings: Calculate the ending balance of the account.

The proportion of assets that are financed with debt can be calculated using the ________ ratio.

A T-account is a summary device with credits posted on the left side of the vertical line.

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

Prepaid Rent is a(n) account and has a normal balance.