Question 1

Each category of the accounting equation contains accounts.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a financial statement that presents a business's accounting equation?

Accepted Answer

A)  Chart of Accounts 
B)  Trial Balance 
C)  Income Statement 
D)  Balance Sheet 
A)  Chart of Accounts 
B)  Trial Balance 
C)  Income Statement 
D)  Balance Sheet

Question 3

________ represents a debt owed for renting a building.

Accepted Answer

A)  Prepaid Rent 
B)  Rent Payable 
C)  Rent Revenue 
D)  Rent Expense 
A)  Prepaid Rent 
B)  Rent Payable 
C)  Rent Revenue 
D)  Rent Expense

Question 4

The Owner,Withdrawals account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 5

Employees worked and a business paid salaries of $6,000 in cash.Record the transaction in the journal.

Accepted Answer

None

Question 6

Provide a definition of each of the following accounting terms.
 $$\begin{array} { | l | l | } 
\hline \text { Accounting Term } & \text { Definition } \
\hline \text { Chart of accounts } & \
\hline \text { Posting } & \
\hline \text { Normal balance } & \
\hline
\end{array}$$

Accepted Answer

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

Question 7

A business purchased land for $250,000 cash.Record the transaction in the journal.

Accepted Answer

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

Question 8

A listing of all accounts in numerical order is called a(n)________.

Accepted Answer

A)  Ledger 
B)  Journal 
C)  Income statement 
D)  Chart of accounts 
A)  Ledger 
B)  Journal 
C)  Income statement 
D)  Chart of accounts

Question 9

A journal entry for a $85 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash.Which of the following statements correctly states the effect of the error on the trial balance?

Accepted Answer

A)  The sum of the credits will equal the sum of the debits. 
B)  The sum of the debits will exceed the sum of the credits by $85. 
C)  The sum of the debits will exceed the sum of the credits by $170. 
D)  The sum of the credits will exceed the sum of the debits by $170. 
A)  The sum of the credits will equal the sum of the debits. 
B)  The sum of the debits will exceed the sum of the credits by $85. 
C)  The sum of the debits will exceed the sum of the credits by $170. 
D)  The sum of the credits will exceed the sum of the debits by $170.

Question 10

Regarding T-accounts,which of the following statements is correct?

Accepted Answer

A)  A T-account is a more detailed form of an account in the journal. 
B)  The right side of a T-account is a debit for asset accounts and a credit for equity accounts. 
C)  Debits are posted on the right side of the vertical line. 
D)  A T-account is a summary device with credits posted on the right side of the vertical line. 
A)  A T-account is a more detailed form of an account in the journal. 
B)  The right side of a T-account is a debit for asset accounts and a credit for equity accounts. 
C)  Debits are posted on the right side of the vertical line. 
D)  A T-account is a summary device with credits posted on the right side of the vertical line.

Question 11

Wilson Furniture Company is a sole proprietorship.Wilson contributed $40,000 of cash in exchange for capital.Which of the following accounts will be debited?

Accepted Answer

A)  Accounts Receivable 
B)  Cash 
C)  Wilson, Capital 
D)  Accounts Payable 
A)  Accounts Receivable 
B)  Cash 
C)  Wilson, Capital 
D)  Accounts Payable

Question 12

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

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 13

Which of the following journal entries would be recorded if a business performs services and receives cash of $900 from the customer?

Accepted Answer

A)  $\begin{array}{|l|r|r|}
\hline \text { Service Revenue } & 900 \
\hline \text { Cash } &&900 \
\hline
\end{array}$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts Receivable } & 900 & \
\hline \text { Service Revenue } & & 900 \
\hline
\end{array}$$ 
C)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 900 \
\hline \text { Service Revenue } &&900 \
\hline
\end{array}$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Service Revenue } & 900 & \
\hline \text { Accounts Receivable } & & 900 \
\hline
\end{array}$$ 
A)  $\begin{array}{|l|r|r|}
\hline \text { Service Revenue } & 900 \
\hline \text { Cash } &&900 \
\hline
\end{array}$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts Receivable } & 900 & \
\hline \text { Service Revenue } & & 900 \
\hline
\end{array}$$ 
C)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 900 \
\hline \text { Service Revenue } &&900 \
\hline
\end{array}$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Service Revenue } & 900 & \
\hline \text { Accounts Receivable } & & 900 \
\hline
\end{array}$$

Question 14

Briefly describe each of the following source documents:
 $$\begin{array} { | l | l | } 
\hline \text { Source Document } & \text { Description } \
\hline \text { Bank checks } & \
\hline \text { Sales invoices } & \
\hline
\end{array}$$

Accepted Answer

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

Question 15

Which of the following journal entries would be recorded if a sole proprietor,Stan Johnson,contributed $3,000 cash to his business?

Accepted Answer

A)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 3,000 \
\hline \text { Johnson, Capital } &&3,000 \
\hline
\end{array}$ 
B)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 3,000 \
\hline \text { Service Revenue } &&3,000 \
\hline
\end{array}$ 
C)  $\begin{array}{|c|r|r|}
\hline \text { Johnson, Capital } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 3,000 \
\hline \text { Uneamed Revenue } &&3,000 \
\hline
\end{array}$ 
A)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 3,000 \
\hline \text { Johnson, Capital } &&3,000 \
\hline
\end{array}$ 
B)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 3,000 \
\hline \text { Service Revenue } &&3,000 \
\hline
\end{array}$ 
C)  $\begin{array}{|c|r|r|}
\hline \text { Johnson, Capital } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Cash } & 3,000 \
\hline \text { Uneamed Revenue } &&3,000 \
\hline
\end{array}$

Question 16

When is a trial balance usually prepared?

Accepted Answer

A)  after each entry is journalized 
B)  before the financial statements are prepared 
C)  after the financial statements are prepared 
D)  at the beginning of an accounting period 
A)  after each entry is journalized 
B)  before the financial statements are prepared 
C)  after the financial statements are prepared 
D)  at the beginning of an accounting period

Question 17

For each transaction,identify which account is debited and which account is credited.Use proper account titles.
 $$\begin{array} { | l | l | l | } 
\hline { \text { Transaction } } & \text { Debit } & \text { Credit } \
\hline \text { Received a bill for utilities to } & & \
\text { be paid next month } & & \
\hline \text { Performed services on account } & & \
\hline \text { Paid cash for a 12-month } & & \
\text { insurance policy, coverage } & & \
\text { starting next month } & & \
\hline \text { Paid rent for the current month } & & \
\hline \text { Borrowed cash from the bank } & & \
\text { for business use; a note was } & & \
\text { signed } & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each transaction,identify which account is debited...

Question 18

A shortened form of the ledger is called a ________.

Accepted Answer

A)  working account 
B)  summary account 
C)  chart of accounts 
D)  T-account 
A)  working account 
B)  summary account 
C)  chart of accounts 
D)  T-account

Question 19

A business purchases equipment by paying $7,517 in cash and issuing a note payable of $19,410.Which of the following occurs?

Accepted Answer

A)  Cash is credited for $7,517, Equipment is credited for $26,927, and Notes Payable is debited for $19,410. 
B)  Cash is credited for $7,517, Equipment is debited for $26,927, and Notes Payable is credited for $19,410. 
C)  Cash is debited for $7,517, Equipment is debited for $19,410, and Notes Payable is credited for $26,927. 
D)  Cash is debited for $7,517, Equipment is credited for $19,410, and Notes Payable is debited for $11,893. 
A)  Cash is credited for $7,517, Equipment is credited for $26,927, and Notes Payable is debited for $19,410. 
B)  Cash is credited for $7,517, Equipment is debited for $26,927, and Notes Payable is credited for $19,410. 
C)  Cash is debited for $7,517, Equipment is debited for $19,410, and Notes Payable is credited for $26,927. 
D)  Cash is debited for $7,517, Equipment is credited for $19,410, and Notes Payable is debited for $11,893.

Question 20

The debt ratio shows the proportion of assets financed with debt.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

Each category of the accounting equation contains accounts.

Which of the following is a financial statement that presents a business's accounting equation?

________ represents a debt owed for renting a building.

The Owner,Withdrawals account is increased by a debit.

Employees worked and a business paid salaries of $6,000 in cash.Record the transaction in the journal.

Provide a definition of each of the following accounting terms. Accounting Term Definition Chart of accounts Posting Normal balance

A business purchased land for $250,000 cash.Record the transaction in the journal.

A listing of all accounts in numerical order is called a(n)________.

A journal entry for a $85 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash.Which of the following statements correctly states the effect of the error on the trial balance?

Regarding T-accounts,which of the following statements is correct?

Wilson Furniture Company is a sole proprietorship.Wilson contributed $40,000 of cash in exchange for capital.Which of the following accounts will be debited?

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

Which of the following journal entries would be recorded if a business performs services and receives cash of $900 from the customer?

Briefly describe each of the following source documents: Source Document Description Bank checks Sales invoices

Which of the following journal entries would be recorded if a sole proprietor,Stan Johnson,contributed $3,000 cash to his business?

When is a trial balance usually prepared?

A shortened form of the ledger is called a ________.

A business purchases equipment by paying $7,517 in cash and issuing a note payable of $19,410.Which of the following occurs?

The debt ratio shows the proportion of assets financed with debt.

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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