Question 1

The trial balance is one of the three basic financial statements that are issued to external users of the business.

Accepted Answer

A) True 
 B)False

Question 2

In reviewing the T-account for Accounts Receivable,you find that the beginning balance is zero,the total increases are $4,900 and the total decreases are $2,400.This means that the ending balance of the account is a credit balance of $2,500.

Accepted Answer

A) True 
 B)False

Question 3

________ represents a debt owed for renting a building currently.

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

A business prepays four months' office rent.Which of the following accounts is debited?

Accepted Answer

A) Rent Expense 
B) Cash 
C) Prepaid Rent 
D) Unearned Rent 
A) Rent Expense 
B) Cash 
C) Prepaid Rent 
D) Unearned Rent

Question 5

The percentage of assets that are financed with liabilities can be calculated using the ________.

Accepted Answer

A) accounting equation 
B) debt ratio 
C) journal 
D) ledger 
A) accounting equation 
B) debt ratio 
C) journal 
D) ledger

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

The process of transferring data from the ledger to the journal is called posting.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is true of revenues?

Accepted Answer

A) Revenues decrease equity,so a revenue account's normal balance is a credit balance. 
B) Revenues decrease equity,so a revenue account's normal balance is a debit balance. 
C) Revenues increase equity,so a revenue account's normal balance is a debit balance. 
D) Revenues increase equity,so a revenue account's normal balance is a credit balance. 
A) Revenues decrease equity,so a revenue account's normal balance is a credit balance. 
B) Revenues decrease equity,so a revenue account's normal balance is a debit balance. 
C) Revenues increase equity,so a revenue account's normal balance is a debit balance. 
D) Revenues increase equity,so a revenue account's normal balance is a credit balance.

Question 9

A business has the following transactions:
* The business receives $15,000 cash and issues common stock to stockholders.
* The business purchases $600 of office supplies on account.
* The business purchases $3,000 of furniture on account.
* The business renders services to various clients totaling $15,000 on account.
* The business pays $1,500 for salaries expense and $4,500 for rent expense.
* The business pays $800 to a supplier for the office supplies purchased earlier.
* The business collects $4,000 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
  
B)  Accounts Receivable
  
C)  Accounts Receivable
  
D)  Accounts Receivable
  
A)  Accounts Receivable
  
B)  Accounts Receivable
  
C)  Accounts Receivable
  
D)  Accounts Receivable

Question 10

A trial balance is a list of all of the accounts of a company with their balances at a point in time.

Accepted Answer

A) True 
 B)False

Question 11

Provide an explanation for each of the following asset accounts.

Accepted Answer

The answer of Provide an explanation for each of the...

Question 12

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

Accepted Answer

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

Question 13

A compound journal entry has more than two accounts,but the total dollar value of the debits still must equal total dollar value of the credits.

Accepted Answer

A) True 
 B)False

Question 14

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 15

The Owner's Withdrawals account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 16

A business receives $40,000 for services that it will perform over the next four months.Which of the following accounts is credited?

Accepted Answer

A) Cash 
B) Accounts Payable 
C) Service Revenue 
D) Unearned Revenue 
A) Cash 
B) Accounts Payable 
C) Service Revenue 
D) Unearned Revenue

Question 17

After initially recording a transaction,the data is then transferred to the ________.

Accepted Answer

A) chart of accounts 
B) ledger 
C) trial balance 
D) journal 
A) chart of accounts 
B) ledger 
C) trial balance 
D) journal

Question 18

Which of the following is a liability account?

Accepted Answer

A) Accounts Payable 
B) Prepaid Expense 
C) Salaries Expense 
D) Service Revenue 
A) Accounts Payable 
B) Prepaid Expense 
C) Salaries Expense 
D) Service Revenue

Question 19

Accounts Payable is a(n)________ account and has a normal ________ balance.

Accepted Answer

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

Question 20

If the total debits equal the total credits on the trial balance,the individual account balances will be error free.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

The trial balance is one of the three basic financial statements that are issued to external users of the business.

In reviewing the T-account for Accounts Receivable,you find that the beginning balance is zero,the total increases are $4,900 and the total decreases are $2,400.This means that the ending balance of the account is a credit balance of $2,500.

________ represents a debt owed for renting a building currently.

A business prepays four months' office rent.Which of the following accounts is debited?

The percentage of assets that are financed with liabilities can be calculated using the ________.

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

The process of transferring data from the ledger to the journal is called posting.

Which of the following statements is true of revenues?

A trial balance is a list of all of the accounts of a company with their balances at a point in time.

Provide an explanation for each of the following asset accounts.

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

A compound journal entry has more than two accounts,but the total dollar value of the debits still must equal total dollar value of the credits.

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.

The Owner's Withdrawals account is increased by a debit.

A business receives $40,000 for services that it will perform over the next four months.Which of the following accounts is credited?

After initially recording a transaction,the data is then transferred to the ________.

Which of the following is a liability account?

Accounts Payable is a(n)________ account and has a normal ________ balance.

If the total debits equal the total credits on the trial balance,the individual account balances will be error free.

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

Accounts Payable is a(n) account and has a normal balance.