Question 1

The dollar amounts listed on the trial balance are obtained from the:

Accepted Answer

A) beginning balances in the ledger accounts. 
B) ending balances in the ledger accounts. 
C) last period's balance sheet and income statement. 
D) this period's balance sheet and income statement. 
A) beginning balances in the ledger accounts. 
B) ending balances in the ledger accounts. 
C) last period's balance sheet and income statement. 
D) this period's balance sheet and income statement.

Question 2

The normal balance of an account:

Accepted Answer

A) falls on the side where decreases are recorded. 
B) falls on the side where increases are recorded. 
C) must be computed after every transaction. 
D) cannot be computed in a manual accounting system. 
A) falls on the side where decreases are recorded. 
B) falls on the side where increases are recorded. 
C) must be computed after every transaction. 
D) cannot be computed in a manual accounting system.

Question 3

The left side of a T-account is always the:

Accepted Answer

A) increase side. 
B) decrease side. 
C) debit side. 
D) credit side. 
A) increase side. 
B) decrease side. 
C) debit side. 
D) credit side.

Question 4

The purchase of office computers for cash includes a debit to:

Accepted Answer

A) Cash and a credit to Office Equipment. 
B) Office Equipment and a credit to Accounts Payable. 
C) Accounts Receivable and credit to Office Equipment. 
D) Office Equipment and a credit to Cash. 
A) Cash and a credit to Office Equipment. 
B) Office Equipment and a credit to Accounts Payable. 
C) Accounts Receivable and credit to Office Equipment. 
D) Office Equipment and a credit to Cash.

Question 5

When using T-accounts,the difference between the total credits and the total debits is the balance in the account.

Accepted Answer

A) True 
 B)False

Question 6

The trial balance is used to prepare the:

Accepted Answer

A) balance sheet only. 
B) income statement only. 
C) statement of retained earnings only. 
D) all of the above. 
A) balance sheet only. 
B) income statement only. 
C) statement of retained earnings only. 
D) all of the above.

Question 7

Transaction analysis and the accounting equation have been used to record several transactions for a company.The transactions are now recorded on a multi-column spreadsheet.When preparing a balance sheet with this spreadsheet,which column(s)would be used?

Accepted Answer

A) final balances of asset columns only 
B) final balances of liability columns only 
C) final balances of stockholders' equity columns only 
D) all of the above 
A) final balances of asset columns only 
B) final balances of liability columns only 
C) final balances of stockholders' equity columns only 
D) all of the above

Question 8

An important rule of debits and credits is:

Accepted Answer

A) credits increase revenue accounts. 
B) debits decrease asset accounts. 
C) debits increase liability accounts. 
D) credits increase asset accounts. 
A) credits increase revenue accounts. 
B) debits decrease asset accounts. 
C) debits increase liability accounts. 
D) credits increase asset accounts.

Question 9

To compute ending balance of retained earnings on the statement of retained earnings:

Accepted Answer

A) net loss is added to the beginning balance of retained earnings and dividends that were declared and paid are subtracted from the beginning balance of retained earnings. 
B) net income and dividends are both added to the beginning balance of retained earnings. 
C) net loss and dividends are both added to the beginning balance of retained earnings. 
D) net income is added to the beginning balance of retained earnings. 
A) net loss is added to the beginning balance of retained earnings and dividends that were declared and paid are subtracted from the beginning balance of retained earnings. 
B) net income and dividends are both added to the beginning balance of retained earnings. 
C) net loss and dividends are both added to the beginning balance of retained earnings. 
D) net income is added to the beginning balance of retained earnings.

Question 10

Posting accounting transactions avoids the necessity of journalizing transactions.

Accepted Answer

A) True 
 B)False

Question 11

If the trial balance does not balance,several steps can be taken to find the error.Which step will probably NOT help you find the error?

Accepted Answer

A) Tracing each account back and forth from the journal to the ledger. 
B) Divide the out-of-balance amount by 2. 
C) Divide the out-of-balance amount by 9. 
D) Divide the out-of-balance amount by 5. 
A) Tracing each account back and forth from the journal to the ledger. 
B) Divide the out-of-balance amount by 2. 
C) Divide the out-of-balance amount by 9. 
D) Divide the out-of-balance amount by 5.

Question 12

Transaction analysis and the accounting equation have been used to record several transactions for a company.The transactions are now recorded on a multi-column spreadsheet.When preparing an income statement with this spreadsheet,which column would be used?

Accepted Answer

A) Cash 
B) Accounts Payable 
C) Dividends 
D) Retained Earnings 
A) Cash 
B) Accounts Payable 
C) Dividends 
D) Retained Earnings

Question 13

When posting a journal entry to the ledger,transfer:

Accepted Answer

A) the dollar amount of debits in the journal entry to the appropriate accounts. 
B) the dollar amounts of credits in the journal entry to the appropriate accounts. 
C) the name of the person who prepared the journal entry. 
D) A and B. 
A) the dollar amount of debits in the journal entry to the appropriate accounts. 
B) the dollar amounts of credits in the journal entry to the appropriate accounts. 
C) the name of the person who prepared the journal entry. 
D) A and B.

Question 14

Jenkins Company began business in June when stockholders invested $85,000 in the business,which in turn issued its common stock to them.Jenkins Company then purchased a building for $43,000 cash and inventory for $24,000 cash,performed services for clients for $15,000 cash,purchased supplies for $7,000 cash,and paid utilities of $4,000 cash.What is the amount of cash at the end of June?

Accepted Answer

A) $18,000 
B) $22,000 
C) $33,000 
D) $46,000 
A) $18,000 
B) $22,000 
C) $33,000 
D) $46,000

Question 15

The entry to record the purchase of supplies on account includes a credit to:

Accepted Answer

A) Supplies. 
B) Accounts Payable. 
C) Supplies Expense. 
D) Cash. 
A) Supplies. 
B) Accounts Payable. 
C) Supplies Expense. 
D) Cash.

Question 16

A company performed tax services for a client on account.The amount billed to the client was $7,000.How does this transaction affect the accounting equation?

Accepted Answer

A) Add $7,000 to Cash and add $7,000 to Service Revenue. 
B) Add $7,000 to Cash and add $7,000 to Retained Earnings. 
C) Add $7,000 to Accounts Receivable and add $7,000 to Retained Earnings. 
D) Add $7,000 to Accounts Payable and add $7,000 to Service Revenue. 
A) Add $7,000 to Cash and add $7,000 to Service Revenue. 
B) Add $7,000 to Cash and add $7,000 to Retained Earnings. 
C) Add $7,000 to Accounts Receivable and add $7,000 to Retained Earnings. 
D) Add $7,000 to Accounts Payable and add $7,000 to Service Revenue.

Question 17

Which transaction decreases stockholders' equity?

Accepted Answer

A) sale of common stock 
B) cash purchase of land 
C) total revenues greater than total expenses for the period 
D) total expenses greater than total revenues for the period 
A) sale of common stock 
B) cash purchase of land 
C) total revenues greater than total expenses for the period 
D) total expenses greater than total revenues for the period

Question 18

On March 31,Baker Company received a bill and paid for advertising costs for the current month.This payment results in a:

Accepted Answer

A) debit to Cash. 
B) debit to Prepaid Advertising. 
C) debit to Advertising Expense. 
D) credit to Advertising Revenue. 
A) debit to Cash. 
B) debit to Prepaid Advertising. 
C) debit to Advertising Expense. 
D) credit to Advertising Revenue.

Question 19

A company omitted a journal entry to record service revenue of $12,000 on account.Is the trial balance out of balance?

Accepted Answer

A) No. 
B) Yes,by $12,000. 
C) Yes,by $24,000. 
D) Yes,by an indeterminate amount. 
A) No. 
B) Yes,by $12,000. 
C) Yes,by $24,000. 
D) Yes,by an indeterminate amount.

Question 20

An account with a normal debit balance is most often an asset or revenue account.

Accepted Answer

A) True 
 B)False

The dollar amounts listed on the trial balance are obtained from the:

The normal balance of an account:

The left side of a T-account is always the:

The purchase of office computers for cash includes a debit to:

When using T-accounts,the difference between the total credits and the total debits is the balance in the account.

The trial balance is used to prepare the:

Transaction analysis and the accounting equation have been used to record several transactions for a company.The transactions are now recorded on a multi-column spreadsheet.When preparing a balance sheet with this spreadsheet,which column(s)would be used?

An important rule of debits and credits is:

To compute ending balance of retained earnings on the statement of retained earnings:

Posting accounting transactions avoids the necessity of journalizing transactions.

If the trial balance does not balance,several steps can be taken to find the error.Which step will probably NOT help you find the error?

Transaction analysis and the accounting equation have been used to record several transactions for a company.The transactions are now recorded on a multi-column spreadsheet.When preparing an income statement with this spreadsheet,which column would be used?

When posting a journal entry to the ledger,transfer:

The entry to record the purchase of supplies on account includes a credit to:

A company performed tax services for a client on account.The amount billed to the client was $7,000.How does this transaction affect the accounting equation?

Which transaction decreases stockholders' equity?

On March 31,Baker Company received a bill and paid for advertising costs for the current month.This payment results in a:

A company omitted a journal entry to record service revenue of $12,000 on account.Is the trial balance out of balance?

An account with a normal debit balance is most often an asset or revenue account.

The Financial Statements

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 2: Transaction Analysis

The dollar amounts listed on the trial balance are obtained from the:

The normal balance of an account:

The left side of a T-account is always the:

The purchase of office computers for cash includes a debit to:

When using T-accounts,the difference between the total credits and the total debits is the balance in the account.

The trial balance is used to prepare the:

Transaction analysis and the accounting equation have been used to record several transactions for a company.The transactions are now recorded on a multi-column spreadsheet.When preparing a balance sheet with this spreadsheet,which column(s)would be used?

An important rule of debits and credits is:

To compute ending balance of retained earnings on the statement of retained earnings:

Posting accounting transactions avoids the necessity of journalizing transactions.

If the trial balance does not balance,several steps can be taken to find the error.Which step will probably NOT help you find the error?

Transaction analysis and the accounting equation have been used to record several transactions for a company.The transactions are now recorded on a multi-column spreadsheet.When preparing an income statement with this spreadsheet,which column would be used?

When posting a journal entry to the ledger,transfer:

The entry to record the purchase of supplies on account includes a credit to:

A company performed tax services for a client on account.The amount billed to the client was $7,000.How does this transaction affect the accounting equation?

Which transaction decreases stockholders' equity?

On March 31,Baker Company received a bill and paid for advertising costs for the current month.This payment results in a:

A company omitted a journal entry to record service revenue of $12,000 on account.Is the trial balance out of balance?

An account with a normal debit balance is most often an asset or revenue account.

The Financial Statements

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters