Question 1

A decrease in the Owner's Capital account is recorded with a debit.

Accepted Answer

A) True 
 B)False  True

Question 2

Normally,the value of an asset remains at its initial fair value or cost until the asset is sold,expires,or is consumed.

Accepted Answer

A) True 
 B)False  True

Question 3

Mesquite,Inc.engaged in the following transactions during October:  
-What is the amount of cash still to be paid?

Accepted Answer

A) $2,300 
B) $2,100 
C) $1,300 
D) $400 
A) $2,300 
B) $2,100 
C) $1,300 
D) $400 D

Question 4

Purchasing office supplies on account is an example of one way a company can take advantage of deferring a cash payment.

Accepted Answer

A) True 
 B)False

Question 5

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 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

Which pair of accounts follows the rules of debit and credit in the opposite manner?

Accepted Answer

A) Prepaid Insurance and Withdrawals 
B) Advertising Expense and Land 
C) Withdrawals and Service Revenue 
D) Interest Payable and Owner's Capital 
A) Prepaid Insurance and Withdrawals 
B) Advertising Expense and Land 
C) Withdrawals and Service Revenue 
D) Interest Payable and Owner's Capital

Question 8

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 9

Which of the following is not a measurement issue in accounting?

Accepted Answer

A) When to record a business transaction. 
B) How to classify the items of a business transaction. 
C) how to classify the items of a business transaction. 
D) Where to record a business transaction. 
A) When to record a business transaction. 
B) How to classify the items of a business transaction. 
C) how to classify the items of a business transaction. 
D) Where to record a business transaction.

Question 10

A credit to an asset account means that asset account has been increased.

Accepted Answer

A) True 
 B)False

Question 11

Another name for the ledger is the book of original entry.

Accepted Answer

A) True 
 B)False

Question 12

Receiving cash from a customer for settlement of an Accounts Receivable will

Accepted Answer

A) decrease Owner's Equity. 
B) increase net income. 
C) increase total assets. 
D) not affect total assets. 
A) decrease Owner's Equity. 
B) increase net income. 
C) increase total assets. 
D) not affect total assets.

Question 13

When a business reports an asset at an inflated dollar amount,is has violated the measurement issue of

Accepted Answer

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

Question 14

Discuss the difference between business events that are transactions and those that are not.Why is the distinction important?

Accepted Answer

Business events become transactions and

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

What type of information does the general journal include for each transaction?

Accepted Answer

The entries in a general journal include

Question 17

In the general journal,the year appears on the first line of the first column,the month on the next line of the first column,and the day in the second column opposite the month.

Accepted Answer

A) True 
 B)False

Question 18

Using the alphabetical list of account balances presented below,all of which are normal,prepare a trial balance for Cookies and Cream Company at June 30,2014,in proper order.Compute the balance of the Cash account.

Accepted Answer

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

Question 19

Withdrawls and revenues are deductions from owner's equity.

Accepted Answer

A) True 
 B)False

Question 20

Using the following transactions,calculate the ending balance of (A)total assets, (B)total liabilities, (C)Cash,and (D)Owner's Equity.Indicate whether each balance is debit or credit.
a.Opened business by investing $72,000 in cash.
b.Paid one year's insurance in advance,$4,800.
c.Billed customers for services rendered,$12,000.
d.Received utility bill,to be paid next month,$800.
e.Received $1,600 in advance of performing a service.
f.Received $8,800 from customers billed in c.
g.Paid $600 on the utility bill of d.
h.Withdrawals of $4,000 were made by the owner.

Accepted Answer

a.$81,000 debit ($72,000 + $12,000 + $1,

Exam 2: Analyzing and Recording Business Transactions

A decrease in the Owner's Capital account is recorded with a debit.

Normally,the value of an asset remains at its initial fair value or cost until the asset is sold,expires,or is consumed.

Mesquite,Inc.engaged in the following transactions during October: -What is the amount of cash still to be paid?

Purchasing office supplies on account is an example of one way a company can take advantage of deferring a cash payment.

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

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

Which pair of accounts follows the rules of debit and credit in the opposite manner?

A purchase is recognized in the accounting records when

Which of the following is not a measurement issue in accounting?

A credit to an asset account means that asset account has been increased.

Another name for the ledger is the book of original entry.

Receiving cash from a customer for settlement of an Accounts Receivable will

When a business reports an asset at an inflated dollar amount,is has violated the measurement issue of

Discuss the difference between business events that are transactions and those that are not.Why is the distinction important?

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

What type of information does the general journal include for each transaction?

In the general journal,the year appears on the first line of the first column,the month on the next line of the first column,and the day in the second column opposite the month.

Using the alphabetical list of account balances presented below,all of which are normal,prepare a trial balance for Cookies and Cream Company at June 30,2014,in proper order.Compute the balance of the Cash account.

Withdrawls and revenues are deductions from owner's equity.

Accounting Principles and the Financial Statements

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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