Question 1

The general journal does not have a column titled

Accepted Answer

A)  Description. 
B)  Account Balance. 
C)  Date. 
D)  Post. Ref. 
A)  Description. 
B)  Account Balance. 
C)  Date. 
D)  Post. Ref.

Question 2

Revenue should be recorded when it has been earned, not when the related cash has been collected.

Accepted Answer

A) True 
 B)False

Question 3

By what amount, if any, would each of the following errors cause a trial balance to be out of balance?
a. A purchase of supplies of $780 was recorded as a debit to Equipment and a credit to Cash for $780.
b. An $890 balance in Prepaid Insurance was copied to the trial balance as a debit of $980.
c. A $600 balance in Accounts Payable was copied to the trial balance as a debit of $600.

Accepted Answer

a. $0
b. $

Question 4

Which of the following accounts has a normal credit balance?

Accepted Answer

A)  Owner's Withdrawals 
B)  Automotive Equipment 
C)  Advertising Fees Earned 
D)  Interest Expense 
A)  Owner's Withdrawals 
B)  Automotive Equipment 
C)  Advertising Fees Earned 
D)  Interest Expense

Question 5

Which of the following transactions decreases both assets and owner's equity?

Accepted Answer

A)  Withdrawal of cash by the owner 
B)  Advance payment made for insurance 
C)  Receipt of a phone bill, to be paid at a later time 
D)  Payment of a liability 
A)  Withdrawal of cash by the owner 
B)  Advance payment made for insurance 
C)  Receipt of a phone bill, to be paid at a later time 
D)  Payment of a liability

Question 6

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

Accepted Answer

A)  An entire transaction was entered in the general journal as $27 instead of $72. 
B)  An entire transaction was omitted from the general journal. 
C)  The balance of an account was incorrectly computed. 
D)  A debit entry was entered in the wrong debit account. 
A)  An entire transaction was entered in the general journal as $27 instead of $72. 
B)  An entire transaction was omitted from the general journal. 
C)  The balance of an account was incorrectly computed. 
D)  A debit entry was entered in the wrong debit account.

Question 7

The account Office Supplies is classified as an expense.

Accepted Answer

A) True 
 B)False

Question 8

Record the following transactions, using proper form, in the journal provided.

Accepted Answer

The answer of Record the following transactions, using proper form,...

Question 9

The issue of deciding when to record a transaction is solved by

Accepted Answer

A)  properly classifying the transaction. 
B)  deciding on a point of recognition. 
C)  assigning historical cost to the transaction. 
D)  analyzing the intent of management. 
A)  properly classifying the transaction. 
B)  deciding on a point of recognition. 
C)  assigning historical cost to the transaction. 
D)  analyzing the intent of management.

Question 10

One might see "J5" correctly placed in the Post. Ref. column of the journal.

Accepted Answer

A) True 
 B)False

Question 11

The chart of accounts is the starting point for a

Accepted Answer

A)  journal. 
B)  trial balance. 
C)  ledger. 
D)  financial statement. 
A)  journal. 
B)  trial balance. 
C)  ledger. 
D)  financial statement.

Question 12

In a journal entry, the Post. Ref. column is left blank until the entry has been posted.

Accepted Answer

A) True 
 B)False

Question 13

Using the alphabetical list of account balances presented below, all of which are normal, prepare a trial balance for T. and C. Company at June 30, 2010, in proper order. Compute the balance of the Cash account.
 $\begin{array}{lr}
\text { Accounts Payable } & \$ 140 \
\text { Accounts Receivable } & 280 \
\text { Cash } & ? \
\text { Equipment } & 400 \
\text { Office Expense } & 180 \
\text { Rita Mason, Capital } & 440 \
\text { Service Revenue } & 300
\end{array}$

Accepted Answer

The answer of Using the alphabetical list of account balances...

Question 14

When a company purchases goods that it will resell, it must record the goods in an expense account.

Accepted Answer

A) True 
 B)False

Question 15

Use this journal entry to answer the following question.
   Explain how the above journal entry relates to the measurement issues of (a) recognition, (b) valuation, and (c) classification.

Accepted Answer

a. The transaction occurred and was reco

Question 16

If Accounts Payable has debit postings of $17,000, credit postings of $14,000, and a normal ending balance of $6,000, what was its beginning balance?

Accepted Answer

A)  $9,000 Cr. 
B)  $3,000 Cr. 
C)  $9,000 Dr. 
D)  $3,000 Dr. 
A)  $9,000 Cr. 
B)  $3,000 Cr. 
C)  $9,000 Dr. 
D)  $3,000 Dr.

Question 17

The Owner's Withdrawals account has a normal credit balance.

Accepted Answer

A) True 
 B)False

Question 18

For each item below, indicate whether a debit or a credit applies.
a. Increase in Art Fees Earned
b. Decrease in Prepaid Rent
c. Decrease in Unearned Fees
d. Increase in Owner's Capital
e. Increase in Depreciation Expense, Buildings
f. Increase in Interest Receivable
g. Decrease in Accounts Payable
h. Increase in Owner's Withdrawals
i. Increase in Notes Payable

Accepted Answer

a. Credit
b. Credit

Question 19

When a business records revenue before it has been earned, it has violated the measurement issue of

Accepted Answer

A)  recognition. 
B)  evaluation. 
C)  classification. 
D)  valuation. 
A)  recognition. 
B)  evaluation. 
C)  classification. 
D)  valuation.

Question 20

Which of the following statements is true about a journal entry?

Accepted Answer

A)  The Post. Ref. column is filled in prior to posting. 
B)  All debits are listed before any credits. 
C)  The name of the month should be repeated for each entry. 
D)  An explanation must follow each debit and each credit. 
A)  The Post. Ref. column is filled in prior to posting. 
B)  All debits are listed before any credits. 
C)  The name of the month should be repeated for each entry. 
D)  An explanation must follow each debit and each credit.

Exam 2: Analyzing Business Transactions

The general journal does not have a column titled

Revenue should be recorded when it has been earned, not when the related cash has been collected.

Which of the following accounts has a normal credit balance?

Which of the following transactions decreases both assets and owner's equity?

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

The account Office Supplies is classified as an expense.

Record the following transactions, using proper form, in the journal provided.

The issue of deciding when to record a transaction is solved by

One might see "J5" correctly placed in the Post. Ref. column of the journal.

The chart of accounts is the starting point for a

In a journal entry, the Post. Ref. column is left blank until the entry has been posted.

When a company purchases goods that it will resell, it must record the goods in an expense account.

Use this journal entry to answer the following question. Explain how the above journal entry relates to the measurement issues of (a) recognition, (b) valuation, and (c) classification.

If Accounts Payable has debit postings of $17,000, credit postings of $14,000, and a normal ending balance of $6,000, what was its beginning balance?

The Owner's Withdrawals account has a normal credit balance.

When a business records revenue before it has been earned, it has violated the measurement issue of

Which of the following statements is true about a journal entry?

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

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