Question 1

The purpose of the ledger is to

Accepted Answer

A)  keep a record of documentation to support each transaction. 
B)  make sure that all assets, liabilities, etc., have credit balances at all times. 
C)  record chronologically the day's transactions. 
D)  maintain a separate account for each asset, liability, etc. 
A)  keep a record of documentation to support each transaction. 
B)  make sure that all assets, liabilities, etc., have credit balances at all times. 
C)  record chronologically the day's transactions. 
D)  maintain a separate account for each asset, liability, etc.

Question 2

A decrease in the Owner's Capital account is recorded with a credit.

Accepted Answer

A) True 
 B)False

Question 3

Given the following ledger account and postings, complete the Balance column. Assume no previous postings in the account.

Accepted Answer

The answer of Given the following ledger account and postings,...

Question 4

In a trial balance, all debits are listed before all credits.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following events does not require a journal entry?

Accepted Answer

A)  Purchase of a one-year insurance policy 
B)  Agreement to perform a service at a future date 
C)  Performance of a service agreed to at a past date 
D)  Payment for a service performed previously 
A)  Purchase of a one-year insurance policy 
B)  Agreement to perform a service at a future date 
C)  Performance of a service agreed to at a past date 
D)  Payment for a service performed previously

Question 6

Which of the following errors will cause a trial balance to be out of balance?

Accepted Answer

A)  The bookkeeper forgot to journalize a transaction. 
B)  The bookkeeper forgot to post a journal entry to the ledger. 
C)  A credit was posted to an account as a debit. 
D)  A debit to Office Equipment was incorrectly debited to Office Supplies. 
A)  The bookkeeper forgot to journalize a transaction. 
B)  The bookkeeper forgot to post a journal entry to the ledger. 
C)  A credit was posted to an account as a debit. 
D)  A debit to Office Equipment was incorrectly debited to Office Supplies.

Question 7

In a journal entry, credits are always indented.

Accepted Answer

A) True 
 B)False

Question 8

A transaction in which six months' rent is paid in advance. Which of the following journal entries records the transaction?

Accepted Answer

A)  Prepaid Rent - Debit; Cash - Credit 
B)  Rent Receivable - Debit; Cash - Credit 
C)  Rent Revenue - Debit; Cash - Credit 
D)  Rent Expense- Debit; Cash - Credit 
A)  Prepaid Rent - Debit; Cash - Credit 
B)  Rent Receivable - Debit; Cash - Credit 
C)  Rent Revenue - Debit; Cash - Credit 
D)  Rent Expense- Debit; Cash - Credit

Question 9

The chart of accounts makes finding accounts in the ledger easier.

Accepted Answer

A) True 
 B)False

Question 10

Journal entries are typically posted to the ledger only at the end of the year.

Accepted Answer

A) True 
 B)False

Question 11

Accounts Payable has a normal credit balance.

Accepted Answer

A) True 
 B)False

Question 12

A debit has an unfavorable effect on an account.

Accepted Answer

A) True 
 B)False

Question 13

When the owner makes an investment, his or her Capital account is debited.

Accepted Answer

A) True 
 B)False

Question 14

If a debit to Supplies were posted as a credit, and a credit of the same amount to Cash were posted as a debit, what would be the effect, if any, on the two accounts and on the trial balance column totals?

Accepted Answer

The Cash account would be over

Question 15

When the columns of the trial balance equal each other, it means that no errors have occurred in recording and posting the transactions.

Accepted Answer

A) True 
 B)False

Question 16

Generally, before Accounts Receivable is debited, it is credited.

Accepted Answer

A) True 
 B)False

Question 17

The ledger account form has a Balance column.

Accepted Answer

A) True 
 B)False

Question 18

A net income of $10,000 means that the business received $10,000 more in cash from its customers than it spent to run the business.

Accepted Answer

A) True 
 B)False

Question 19

An $80 credit item is accidentally posted as a debit. The trial balance column totals will therefore differ by

Accepted Answer

A)  $0. 
B)  $40. 
C)  $80. 
D)  $160. 
A)  $0. 
B)  $40. 
C)  $80. 
D)  $160.

Question 20

Dollar signs are not used in journals and ledgers.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing Business Transactions

The purpose of the ledger is to

A decrease in the Owner's Capital account is recorded with a credit.

Given the following ledger account and postings, complete the Balance column. Assume no previous postings in the account.

In a trial balance, all debits are listed before all credits.

Which of the following events does not require a journal entry?

Which of the following errors will cause a trial balance to be out of balance?

In a journal entry, credits are always indented.

A transaction in which six months' rent is paid in advance. Which of the following journal entries records the transaction?

The chart of accounts makes finding accounts in the ledger easier.

Journal entries are typically posted to the ledger only at the end of the year.

Accounts Payable has a normal credit balance.

A debit has an unfavorable effect on an account.

When the owner makes an investment, his or her Capital account is debited.

If a debit to Supplies were posted as a credit, and a credit of the same amount to Cash were posted as a debit, what would be the effect, if any, on the two accounts and on the trial balance column totals?

When the columns of the trial balance equal each other, it means that no errors have occurred in recording and posting the transactions.

Generally, before Accounts Receivable is debited, it is credited.

The ledger account form has a Balance column.

A net income of $10,000 means that the business received $10,000 more in cash from its customers than it spent to run the business.

An $80 credit item is accidentally posted as a debit. The trial balance column totals will therefore differ by

Dollar signs are not used in journals and ledgers.

Uses of Accounting Information and the Financial Statements

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Filters