Question 1

Which of the following accounts has a normal debit balance?

Accepted Answer

A)  Wages Payable 
B)  Fees Earned 
C)  Rent Expense 
D)  Owner's Capital 
A)  Wages Payable 
B)  Fees Earned 
C)  Rent Expense 
D)  Owner's Capital

Question 2

Which of the following business events is not a transaction?

Accepted Answer

A)  Signing a contract 
B)  Paying wages 
C)  Receiving goods 
D)  Purchasing a service 
A)  Signing a contract 
B)  Paying wages 
C)  Receiving goods 
D)  Purchasing a service

Question 3

A withdrawal of cash by the owner will reduce which of the following accounts?

Accepted Answer

A)  Owner's Withdrawals 
B)  Owner's Capital 
C)  Accounts Receivable 
D)  Accounts Payable 
A)  Owner's Withdrawals 
B)  Owner's Capital 
C)  Accounts Receivable 
D)  Accounts Payable

Question 4

A purchase is recognized in the accounting records when

Accepted Answer

A)  payment is made for the item purchased. 
B)  the purchase requisition is sent to the purchasing department. 
C)  title transfers from the seller to the buyer. 
D)  the buyer receives the seller's bill. 
A)  payment is made for the item purchased. 
B)  the purchase requisition is sent to the purchasing department. 
C)  title transfers from the seller to the buyer. 
D)  the buyer receives the seller's bill.

Question 5

Typically, the chart of accounts begins with

Accepted Answer

A)  revenue accounts. 
B)  asset accounts. 
C)  liability accounts. 
D)  expense accounts. 
A)  revenue accounts. 
B)  asset accounts. 
C)  liability accounts. 
D)  expense accounts.

Question 6

Briefly explain the difference between Unearned Art Fees and Art Fees Earned.

Accepted Answer

Unearned Art Fees appears on the balance

Question 7

The double-entry system is possible because all business transactions have two equal and opposite aspects.

Accepted Answer

A) True 
 B)False

Question 8

For which of the following accounts would a related Accumulated Depreciation account be recorded?

Accepted Answer

A)  Office Equipment 
B)  Land 
C)  Office Supplies 
D)  Prepaid Rent 
A)  Office Equipment 
B)  Land 
C)  Office Supplies 
D)  Prepaid Rent

Question 9

Which of the following accounts has a normal credit balance?

Accepted Answer

A)  Accounts Receivable 
B)  Owner's Capital 
C)  Wages Expense 
D)  Owner's Withdrawals 
A)  Accounts Receivable 
B)  Owner's Capital 
C)  Wages Expense 
D)  Owner's Withdrawals

Question 10

Indicate whether each account below has a normal debit or a normal credit balance.
a. Automobiles
b. Accounts Payable
h. Unearned Revenue
c. Owner's Capital
i. Land
d. Prepaid Rent
j. Interest Payable
e. Advertising Expense
f. Service Revenue 
g. Owner's Withdrawals
h. Unearned Revenue
i. Land
j. Interest Payable
k. Notes Receivable

Accepted Answer

a. Debit
g. Debit
b. Credit
h.

Question 11

Which of the following accounts is classified differently from the others listed?

Accepted Answer

A)  Notes Payable 
B)  Unearned Revenue 
C)  Accounts Payable 
D)  Fees Earned 
A)  Notes Payable 
B)  Unearned Revenue 
C)  Accounts Payable 
D)  Fees Earned

Question 12

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

Accepted Answer

A)  Decreases in liabilities are indented. 
B)  The Post. Ref. column is left blank until entries are posted. 
C)  A line is skipped between each debit and each credit. 
D)  Assets are entered before liabilities. 
A)  Decreases in liabilities are indented. 
B)  The Post. Ref. column is left blank until entries are posted. 
C)  A line is skipped between each debit and each credit. 
D)  Assets are entered before liabilities.

Question 13

The Post. Ref. column in the general journal is used to show that an amount has been posted to the ledger when which of the following is placed in it?

Accepted Answer

A)  An X 
B)  Journal number 
C)  Journal page number 
D)  Account number 
A)  An X 
B)  Journal number 
C)  Journal page number 
D)  Account number

Question 14

In a journal entry, assets are always recorded before liabilities.

Accepted Answer

A) True 
 B)False

Question 15

Owner's withdrawals should appear on the statement of owner's equity.

Accepted Answer

A) True 
 B)False

Question 16

A $155 credit item is posted as a debit. The trial balance column totals therefore will differ by

Accepted Answer

A)  $310. 
B)  $620. 
C)  $155. 
D)  $0. 
A)  $310. 
B)  $620. 
C)  $155. 
D)  $0.

Question 17

Which of the following accounts will eventually be followed with an inflow of cash?

Accepted Answer

A)  Prepaid Insurance 
B)  Unearned Revenue 
C)  Owner's Withdrawals 
D)  Accounts Receivable 
A)  Prepaid Insurance 
B)  Unearned Revenue 
C)  Owner's Withdrawals 
D)  Accounts Receivable

Question 18

From the following alphabetical list of account balances, all of which are normal, for Kasper Company on July 31, 2010, prepare a trial balance in proper form (the amount of Phil Kasper, Withdrawals must be computed) .
 $\begin{array}{lr}
\text { Accounts Payable } & \$ 500 \
\text { Accounts Receivable } & 200 \
\text { Cash } & 80 \
\text { Equipment } & 700 \
\text { Phil Kasper, Capital } & 150 \
\text { Phil Kasper, Withdrawals } & ? \
\text { Prepaid Advertising } & 20 \
\text { Revenue Earned } & 400 \
\text { Wages Expense } & 70 \
\text { Wages Payable } & 50
\end{array}$

Accepted Answer

The answer of From the following alphabetical list of account...

Question 19

Expenses should be recorded when they are paid, not when they have been incurred.

Accepted Answer

A) True 
 B)False

Question 20

The Unearned Fees account is classified as a(n)

Accepted Answer

A)  liability. 
B)  revenue. 
C)  asset. 
D)  expense. 
A)  liability. 
B)  revenue. 
C)  asset. 
D)  expense.

Exam 2: Analyzing Business Transactions

Which of the following accounts has a normal debit balance?

Which of the following business events is not a transaction?

A withdrawal of cash by the owner will reduce which of the following accounts?

A purchase is recognized in the accounting records when

Typically, the chart of accounts begins with

Briefly explain the difference between Unearned Art Fees and Art Fees Earned.

The double-entry system is possible because all business transactions have two equal and opposite aspects.

For which of the following accounts would a related Accumulated Depreciation account be recorded?

Which of the following accounts has a normal credit balance?

Which of the following accounts is classified differently from the others listed?

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

The Post. Ref. column in the general journal is used to show that an amount has been posted to the ledger when which of the following is placed in it?

In a journal entry, assets are always recorded before liabilities.

Owner's withdrawals should appear on the statement of owner's equity.

A $155 credit item is posted as a debit. The trial balance column totals therefore will differ by

Which of the following accounts will eventually be followed with an inflow of cash?

Expenses should be recorded when they are paid, not when they have been incurred.

The Unearned Fees account is classified as a(n)

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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