Question 1

A listing of all account titles in numerical order is a(n):

Accepted Answer

A)  ledger. 
B)  journal. 
C)  chart of accounts. 
D)  income statement. 
A)  ledger. 
B)  journal. 
C)  chart of accounts. 
D)  income statement.

Question 2

The trial balance is one of the three basic financial statements.

Accepted Answer

A) True 
 B)False

Question 3

The following are the current month's balances for Toys Galore:
$$\begin{array} { | l | l | } 
\hline \text { Accounts payable } & \$ 10,000 \
\hline \text { Revenue } & 3000 \
\hline \text { Cash } & 3000 \
\hline \text { Expenses } & 1200 \
\hline \text { Furniture } & 11,000 \
\hline \text { Accounts receivable } & 15,000 \
\hline \text { Iones, capital } & 7250 \
\hline \text { Loan payable } & 6500 \
\hline
\end{array}$$
Calculate the total amount of credits for the trial balance.

Accepted Answer

A)  $31,750 
B)  $23,750 
C)  $24,500 
D)  $21,750 
A)  $31,750 
B)  $23,750 
C)  $24,500 
D)  $21,750

Question 4

Which of the following is NOT an example of a source document?

Accepted Answer

A)  Bank deposit slip 
B)  Purchase invoice 
C)  Journal 
D)  Sales invoice 
A)  Bank deposit slip 
B)  Purchase invoice 
C)  Journal 
D)  Sales invoice

Question 5

Which of the following accounts is an example of a liability?

Accepted Answer

A)  Bills payable 
B)  Service revenue 
C)  Accounts receivable 
D)  Building 
A)  Bills payable 
B)  Service revenue 
C)  Accounts receivable 
D)  Building

Question 6

A journal entry for a $70 payment for rent expense was posted as a debit to Salaries expense and a credit to Cash.This error will cause which of the following conditions 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 $140. 
C)  The sum of the credits will exceed the sum of the debits by $140. 
D)  The sum of the debits will exceed the sum of the credits by $70. 
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 $140. 
C)  The sum of the credits will exceed the sum of the debits by $140. 
D)  The sum of the debits will exceed the sum of the credits by $70.

Question 7

The Accounts receivable account of Nuptials Ltd is shown below.
Accounts receivable
20,000
3000
 
5000
 
Calculate the ending balance of the account.

Accepted Answer

A)  $18,000, debit 
B)  $5000, credit 
C)  $28,000, debit 
D)  $23,000, debit 
A)  $18,000, debit 
B)  $5000, credit 
C)  $28,000, debit 
D)  $23,000, debit

Question 8

The drawings account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

A business buys $500 in supplies on credit.Which account is credited?

Accepted Answer

A)  Service revenue 
B)  Cash 
C)  Supplies 
D)  Accounts payable 
A)  Service revenue 
B)  Cash 
C)  Supplies 
D)  Accounts payable

Question 11

Which of the following accounts is an owners' equity account?

Accepted Answer

A)  Accrued liability 
B)  Prepaid expense 
C)  Accounts payable 
D)  Capital 
A)  Accrued liability 
B)  Prepaid expense 
C)  Accounts payable 
D)  Capital

Question 12

The first step of journalising an entry is to:

Accepted Answer

A)  identify the transaction from source documents. 
B)  post the accounts to the ledger. 
C)  determine whether each account is increased or decreased. 
D)  record the transaction in the journal, including a brief explanation. 
A)  identify the transaction from source documents. 
B)  post the accounts to the ledger. 
C)  determine whether each account is increased or decreased. 
D)  record the transaction in the journal, including a brief explanation.

Question 13

In a typical chart of accounts,liabilities appear before assets.

Accepted Answer

A) True 
 B)False

Question 14

Debit refers to the right side of the T-account and credit refers to the left side.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is FALSE?

Accepted Answer

A)  A trial balance shows total debits and total credits. 
B)  A trial balance is created before the balance sheet is prepared. 
C)  A trial balance presents data in debit and credit format, but a balance sheet does not. 
D)  A trial balance shows total amounts for assets, liabilities and equity. 
A)  A trial balance shows total debits and total credits. 
B)  A trial balance is created before the balance sheet is prepared. 
C)  A trial balance presents data in debit and credit format, but a balance sheet does not. 
D)  A trial balance shows total amounts for assets, liabilities and equity.

Question 16

Which of the following accounts is an example of an owners' equity account?

Accepted Answer

A)  Cash 
B)  Equipment 
C)  Drawings 
D)  Accounts payable 
A)  Cash 
B)  Equipment 
C)  Drawings 
D)  Accounts payable

Question 17

A company received $75 000 from a customer 'on account'.The journal entry would be to:

Accepted Answer

A)  debit Accounts receivable and credit Sales revenue. 
B)  debit Sales revenue and credit Accounts receivable. 
C)  debit Cash and credit Accounts receivable. 
D)  debit Accounts receivable and credit Cash. 
A)  debit Accounts receivable and credit Sales revenue. 
B)  debit Sales revenue and credit Accounts receivable. 
C)  debit Cash and credit Accounts receivable. 
D)  debit Accounts receivable and credit Cash.

Question 18

In a trial balance,total debits are always equal to total credits.

Accepted Answer

A) True 
 B)False

Question 19

The normal sequence of information flow in an accounting system is:

Accepted Answer

A)  source document, ledger, journal. 
B)  journal, source document, ledger. 
C)  source document, journal, ledger. 
D)  ledger, journal, source document. 
A)  source document, ledger, journal. 
B)  journal, source document, ledger. 
C)  source document, journal, ledger. 
D)  ledger, journal, source document.

Question 20

A business collects cash from a customer in payment of accounts receivable.Which account is debited?

Accepted Answer

A)  Cash 
B)  Service revenue 
C)  Accounts receivable 
D)  Supplies 
A)  Cash 
B)  Service revenue 
C)  Accounts receivable 
D)  Supplies

Exam 2: Recording Business Transactions

A listing of all account titles in numerical order is a(n):

The trial balance is one of the three basic financial statements.

The following are the current month's balances for Toys Galore: Accounts payable \ 10,000 Revenue 3000 Cash 3000 Expenses 1200 Furniture 11,000 Accounts receivable 15,000 Iones, capital 7250 Loan payable 6500 Calculate the total amount of credits for the trial balance.

Which of the following is NOT an example of a source document?

Which of the following accounts is an example of a liability?

A journal entry for a $70 payment for rent expense was posted as a debit to Salaries expense and a credit to Cash.This error will cause which of the following conditions on the trial balance?

The Accounts receivable account of Nuptials Ltd is shown below. Accounts receivable 20,000 3000 5000 Calculate the ending balance of the account.

The drawings account is increased by a debit.

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

A business buys $500 in supplies on credit.Which account is credited?

Which of the following accounts is an owners' equity account?

The first step of journalising an entry is to:

In a typical chart of accounts,liabilities appear before assets.

Debit refers to the right side of the T-account and credit refers to the left side.

Which of the following statements is FALSE?

Which of the following accounts is an example of an owners' equity account?

A company received $75 000 from a customer 'on account'.The journal entry would be to:

In a trial balance,total debits are always equal to total credits.

The normal sequence of information flow in an accounting system is:

A business collects cash from a customer in payment of accounts receivable.Which account is debited?

The Role of Accounting in Decision Making

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities,debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Introduction to Managerial Accounting and the Master Budget

Job Costing

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

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