Question 1

The higher the debt ratio,the lower the risk of default.

Accepted Answer

A) True 
 B)False  False

Question 2

In a trial balance,total debits must always equal total credits.

Accepted Answer

A) True 
 B)False  True

Question 3

Prepaid Rent is a liability account.

Accepted Answer

A) True 
 B)False  False

Question 4

Each category of the accounting equation contains accounts.

Accepted Answer

A) True 
 B)False

Question 5

Briefly describe each of the following source documents:

Accepted Answer

The answer of Briefly describe each of the following source...

Question 6

An account that normally has a debit balance may occasionally have a credit balance.

Accepted Answer

A) True 
 B)False

Question 7

A business purchases $3,500 of office supplies for cash.Which of the following sets of ledger accounts reflects the posting of this transaction?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 8

An accounts receivable requires the business to pay cash in the future.

Accepted Answer

A) True 
 B)False

Question 9

A business purchases $500 of office supplies on account.What is the effect on the accounting equation?

Accepted Answer

A) Office Supplies increase and Cash decreases 
B) Office Supplies increase and Accounts Payable increase 
C) Office Supplies increase and Accounts Payable decrease 
D) Total assets increase and total liabilities decrease 
A) Office Supplies increase and Cash decreases 
B) Office Supplies increase and Accounts Payable increase 
C) Office Supplies increase and Accounts Payable decrease 
D) Total assets increase and total liabilities decrease

Question 10

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

Accepted Answer

A) journalizing 
B) posting 
C) compounding 
D) sourcing 
A) journalizing 
B) posting 
C) compounding 
D) sourcing

Question 11

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

Accepted Answer

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

Question 12

Which of the following statements is TRUE of the Owner,Capital account?

Accepted Answer

A) It is an equity account that has a normal credit balance. 
B) It is a liability account that has a normal credit balance. 
C) It is a liability account that has a normal debit balance. 
D) It is an equity account that has a normal debit balance. 
A) It is an equity account that has a normal credit balance. 
B) It is a liability account that has a normal credit balance. 
C) It is a liability account that has a normal debit balance. 
D) It is an equity account that has a normal debit balance.

Question 13

Prepaid Rent is a(n)________ account and has a normal ________ balance.

Accepted Answer

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

Question 14

A business performs services for its customer for $50,000 on account.Record the transaction in the journal.

Accepted Answer

The answer of A business performs services for its customer...

Question 15

A chart of accounts is a detailed record of the changes in a particular asset,liability,or equity account during a specified period.

Accepted Answer

A) True 
 B)False

Question 16

Source documents provide the evidence and data for accounting transactions.

Accepted Answer

A) True 
 B)False

Question 17

A journal entry for a $85 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash.Which of the following statements correctly states the effect of the error on the trial balance?

Accepted Answer

A) The sum of the credits will equal the sum of the debits. 
B) The sum of the debits will exceed the sum of the credits by $85. 
C) The sum of the debits will exceed the sum of the credits by $170. 
D) The sum of the credits will exceed the sum of the debits by $170. 
A) The sum of the credits will equal the sum of the debits. 
B) The sum of the debits will exceed the sum of the credits by $85. 
C) The sum of the debits will exceed the sum of the credits by $170. 
D) The sum of the credits will exceed the sum of the debits by $170.

Question 18

A business purchases $1,000 of office supplies on account.Which of the following accounts is debited?

Accepted Answer

A) Cash 
B) Accounts Payable 
C) Office Supplies 
D) Prepaid Asset 
A) Cash 
B) Accounts Payable 
C) Office Supplies 
D) Prepaid Asset

Question 19

Which of the following is a financial statement that presents a business's accounting equation?

Accepted Answer

A) Chart of Accounts 
B) Trial Balance 
C) Income Statement 
D) Balance Sheet 
A) Chart of Accounts 
B) Trial Balance 
C) Income Statement 
D) Balance Sheet

Question 20

Which of the following statements is TRUE of expenses?

Accepted Answer

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

The higher the debt ratio,the lower the risk of default.

In a trial balance,total debits must always equal total credits.

Prepaid Rent is a liability account.

Each category of the accounting equation contains accounts.

Briefly describe each of the following source documents:

An account that normally has a debit balance may occasionally have a credit balance.

A business purchases $3,500 of office supplies for cash.Which of the following sets of ledger accounts reflects the posting of this transaction?

An accounts receivable requires the business to pay cash in the future.

A business purchases $500 of office supplies on account.What is the effect on the accounting equation?

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

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

Which of the following statements is TRUE of the Owner,Capital account?

Prepaid Rent is a(n) account and has a normal balance.

A business performs services for its customer for $50,000 on account.Record the transaction in the journal.

A chart of accounts is a detailed record of the changes in a particular asset,liability,or equity account during a specified period.

Source documents provide the evidence and data for accounting transactions.

A journal entry for a $85 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash.Which of the following statements correctly states the effect of the error on the trial balance?

A business purchases $1,000 of office supplies on account.Which of the following accounts is debited?

Which of the following is a financial statement that presents a business's accounting equation?

Which of the following statements is TRUE of expenses?

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

Filters

Exam 2: Recording Business Transactions

The higher the debt ratio,the lower the risk of default.

In a trial balance,total debits must always equal total credits.

Prepaid Rent is a liability account.

Each category of the accounting equation contains accounts.

Briefly describe each of the following source documents:

An account that normally has a debit balance may occasionally have a credit balance.

A business purchases $3,500 of office supplies for cash.Which of the following sets of ledger accounts reflects the posting of this transaction?

An accounts receivable requires the business to pay cash in the future.

A business purchases $500 of office supplies on account.What is the effect on the accounting equation?

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

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

Which of the following statements is TRUE of the Owner,Capital account?

Prepaid Rent is a(n)________ account and has a normal ________ balance.

A business performs services for its customer for $50,000 on account.Record the transaction in the journal.

A chart of accounts is a detailed record of the changes in a particular asset,liability,or equity account during a specified period.

Source documents provide the evidence and data for accounting transactions.

A journal entry for a $85 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash.Which of the following statements correctly states the effect of the error on the trial balance?

A business purchases $1,000 of office supplies on account.Which of the following accounts is debited?

Which of the following is a financial statement that presents a business's accounting equation?

Which of the following statements is TRUE of expenses?

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

Filters

Prepaid Rent is a(n) account and has a normal balance.