Question 1

Which of the following represents the correct flow of accounting data?

Accepted Answer

A) transactions occur;transactions are analyzed;transactions are journalized and posted;source documents are prepared 
B) transactions occur;source documents are prepared;transactions are journalized and posted; 
C) transactions occur;source documents are prepared;transactions are analyzed;transactions are journalized and posted 
D) source documents are prepared;transactions occur;transactions are analyzed;transactions are journalized and posted 
A) transactions occur;transactions are analyzed;transactions are journalized and posted;source documents are prepared 
B) transactions occur;source documents are prepared;transactions are journalized and posted; 
C) transactions occur;source documents are prepared;transactions are analyzed;transactions are journalized and posted 
D) source documents are prepared;transactions occur;transactions are analyzed;transactions are journalized and posted

Question 2

An asset account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 3

A business borrows cash by signing a note payable.Which of the following accounts is debited?

Accepted Answer

A) Notes Payable 
B) Accounts Payable 
C) Notes Receivable 
D) Cash 
A) Notes Payable 
B) Accounts Payable 
C) Notes Receivable 
D) Cash

Question 4

A business renders services to a client and issues a sales invoice.The amount will be collected from the customer at a later time.Which of the following is TRUE at the time the invoice is issued?

Accepted Answer

A) Equity will decrease. 
B) Total liabilities will increase. 
C) Total assets will decrease. 
D) Net income will increase. 
A) Equity will decrease. 
B) Total liabilities will increase. 
C) Total assets will decrease. 
D) Net income will increase.

Question 5

For Office Supplies,the category of account and its normal balance is ________.

Accepted Answer

A) liabilities and a debit balance 
B) assets and a debit balance 
C) liabilities and a credit balance 
D) assets and a credit balance 
A) liabilities and a debit balance 
B) assets and a debit balance 
C) liabilities and a credit balance 
D) assets and a credit balance

Question 6

Debit is abbreviated as DE and Credit is abbreviated as CR.

Accepted Answer

A) True 
 B)False

Question 7

For expenses,the category of account and its normal balance is ________.

Accepted Answer

A) equity and a credit balance 
B) assets and a debit balance 
C) assets and a credit balance 
D) equity and a debit balance 
A) equity and a credit balance 
B) assets and a debit balance 
C) assets and a credit balance 
D) equity and a debit balance

Question 8

________ represents a debt owed for renting a building.

Accepted Answer

A) Prepaid Rent 
B) Rent Payable 
C) Rent Revenue 
D) Rent Expense 
A) Prepaid Rent 
B) Rent Payable 
C) Rent Revenue 
D) Rent Expense

Question 9

An owner's withdrawals and expenses increase owner's equity.

Accepted Answer

A) True 
 B)False

Question 10

A business performs services for a customer for $26,000 on account.Which of the following accounts is debited?

Accepted Answer

A) Cash 
B) Accounts Receivable 
C) Service Revenue 
D) Accounts Payable 
A) Cash 
B) Accounts Receivable 
C) Service Revenue 
D) Accounts Payable

Question 11

A business makes a cash payment to a supplier for office supplies that were purchased earlier on account.Which of the following accounts is debited?

Accepted Answer

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

Question 12

The four-column account ________.

Accepted Answer

A) is an alternative to using the ledger 
B) includes the Post.Ref.column which allows a user of the financial data to trace the amount in the journal back to the ledger 
C) is not frequently used in practice because it provides less information than T-accounts 
D) adds two additional columns that are used to determine a running balance 
A) is an alternative to using the ledger 
B) includes the Post.Ref.column which allows a user of the financial data to trace the amount in the journal back to the ledger 
C) is not frequently used in practice because it provides less information than T-accounts 
D) adds two additional columns that are used to determine a running balance

Question 13

Which of the following accounts decreases with a credit?

Accepted Answer

A) Cash 
B) Owner,Capital 
C) Accounts Payable 
D) Unearned Revenue 
A) Cash 
B) Owner,Capital 
C) Accounts Payable 
D) Unearned Revenue

Question 14

Saturn Company paid the rent for the current month in cash.Which of the following accounts will be used to record the transaction?

Accepted Answer

A) Prepaid Rent 
B) Rent Payable 
C) Rent Revenue 
D) Rent Expense 
A) Prepaid Rent 
B) Rent Payable 
C) Rent Revenue 
D) Rent Expense

Question 15

The following are the current month's balances for ABC Financial Services Company before preparing the trial balance.   What amount should be shown for Miller,Capital on the trial balance?

Accepted Answer

A) $42,000 
B) $20,000 
C) $15,500 
D) $25,000 
A) $42,000 
B) $20,000 
C) $15,500 
D) $25,000

Question 16

Owner,Withdrawals is a(n)________ account that has a normal ________ balance.

Accepted Answer

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

Question 17

Which of the following is the order of steps to journalize an entry?

Accepted Answer

A) Identify the accounts and the account type → Decide whether each account increases or decreases,then apply the rules of debits and credits → Record the transaction 
B) Identify the accounts and the account type → Record the transaction → Decide whether each account increases or decreases,then apply the rules of debits and credits 
C) Record the transaction → Identify the accounts and the account type → Decide whether each account increases or decreases,then apply the rules of debits and credits 
D) Decide whether each account increases or decreases,then apply the rules of debits and credits → Identify the accounts and the account type → Record the transaction 
A) Identify the accounts and the account type → Decide whether each account increases or decreases,then apply the rules of debits and credits → Record the transaction 
B) Identify the accounts and the account type → Record the transaction → Decide whether each account increases or decreases,then apply the rules of debits and credits 
C) Record the transaction → Identify the accounts and the account type → Decide whether each account increases or decreases,then apply the rules of debits and credits 
D) Decide whether each account increases or decreases,then apply the rules of debits and credits → Identify the accounts and the account type → Record the transaction

Question 18

The trial balance is also known as the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is the correct formula to calculate the debt ratio?

Accepted Answer

A) Debt ratio = Total liabilities × Total assets 
B) Debt ratio = Total liabilities + Total assets 
C) Debt ratio = Total liabilities - Total assets 
D) Debt ratio = Total liabilities / Total assets 
A) Debt ratio = Total liabilities × Total assets 
B) Debt ratio = Total liabilities + Total assets 
C) Debt ratio = Total liabilities - Total assets 
D) Debt ratio = Total liabilities / Total assets

Question 20

The Accounts Payable account of Waterford Company has the following postings:   Calculate the ending balance of the account.

Accepted Answer

A) $14,000 credit 
B) $18,000 debit 
C) $18,000 credit 
D) $7,000 debit 
A) $14,000 credit 
B) $18,000 debit 
C) $18,000 credit 
D) $7,000 debit

Which of the following represents the correct flow of accounting data?

An asset account is increased by a debit.

A business borrows cash by signing a note payable.Which of the following accounts is debited?

A business renders services to a client and issues a sales invoice.The amount will be collected from the customer at a later time.Which of the following is TRUE at the time the invoice is issued?

For Office Supplies,the category of account and its normal balance is ________.

Debit is abbreviated as DE and Credit is abbreviated as CR.

For expenses,the category of account and its normal balance is ________.

________ represents a debt owed for renting a building.

An owner's withdrawals and expenses increase owner's equity.

A business performs services for a customer for $26,000 on account.Which of the following accounts is debited?

A business makes a cash payment to a supplier for office supplies that were purchased earlier on account.Which of the following accounts is debited?

The four-column account ________.

Which of the following accounts decreases with a credit?

Saturn Company paid the rent for the current month in cash.Which of the following accounts will be used to record the transaction?

The following are the current month's balances for ABC Financial Services Company before preparing the trial balance. What amount should be shown for Miller,Capital on the trial balance?

Owner,Withdrawals is a(n) account that has a normal balance.

Which of the following is the order of steps to journalize an entry?

The trial balance is also known as the balance sheet.

Which of the following is the correct formula to calculate the debt ratio?

The Accounts Payable account of Waterford Company has the following postings: Calculate the ending balance of the account.

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

Which of the following represents the correct flow of accounting data?

An asset account is increased by a debit.

A business borrows cash by signing a note payable.Which of the following accounts is debited?

A business renders services to a client and issues a sales invoice.The amount will be collected from the customer at a later time.Which of the following is TRUE at the time the invoice is issued?

For Office Supplies,the category of account and its normal balance is ________.

Debit is abbreviated as DE and Credit is abbreviated as CR.

For expenses,the category of account and its normal balance is ________.

________ represents a debt owed for renting a building.

An owner's withdrawals and expenses increase owner's equity.

A business performs services for a customer for $26,000 on account.Which of the following accounts is debited?

A business makes a cash payment to a supplier for office supplies that were purchased earlier on account.Which of the following accounts is debited?

The four-column account ________.

Which of the following accounts decreases with a credit?

Saturn Company paid the rent for the current month in cash.Which of the following accounts will be used to record the transaction?

The following are the current month's balances for ABC Financial Services Company before preparing the trial balance. What amount should be shown for Miller,Capital on the trial balance?

Owner,Withdrawals is a(n)________ account that has a normal ________ balance.

Which of the following is the order of steps to journalize an entry?

The trial balance is also known as the balance sheet.

Which of the following is the correct formula to calculate the debt ratio?

The Accounts Payable account of Waterford Company has the following postings: Calculate the ending balance of the account.

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

Owner,Withdrawals is a(n) account that has a normal balance.