Question 1

Accounts are classified in the ledger

Accepted Answer

A)  chronologically 
B)  alphabetically 
C)  in accordance with their appearance in the financial statements 
D)  so that accounts used most often are listed first 
A)  chronologically 
B)  alphabetically 
C)  in accordance with their appearance in the financial statements 
D)  so that accounts used most often are listed first

Question 2

The normal balance of an expense account is a credit.

Accepted Answer

A) True 
 B)False

Question 3

Expenses follow the same debit and credit rules as

Accepted Answer

A)  revenues 
B)  dividends 
C)  capital stock 
D)  liabilities 
A)  revenues 
B)  dividends 
C)  capital stock 
D)  liabilities

Question 4

On January 1, 2011, Cary Parsons established Cary's Catering Service. Listed below are accounts to use for transactions (a) through (f), each identified by a number. Following this list are the transactions that occurred during the first month of operations. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

Accepted Answer

The answer of On January 1, 2011, Cary Parsons established...

Question 5

A debit balance in which of the following accounts would indicate a likely error?

Accepted Answer

A)  Salaries Expense 
B)  Notes Payable 
C)  Dividends 
D)  Supplies 
A)  Salaries Expense 
B)  Notes Payable 
C)  Dividends 
D)  Supplies

Question 6

Which of the following statements is not true about liabilities?

Accepted Answer

A)  Liabilities are debts owed to outsiders. 
B)  Account titles of liabilities often include the term "payable." 
C)  Receiving cash before a service is performed creates a liability. 
D)  Liabilities do not include wages owed to employees of the company. 
A)  Liabilities are debts owed to outsiders. 
B)  Account titles of liabilities often include the term "payable." 
C)  Receiving cash before a service is performed creates a liability. 
D)  Liabilities do not include wages owed to employees of the company.

Question 7

Cash was paid by Ari's Alarm Service to creditors on account. Which of the following entries for Ari's Alarm Service records this transaction?

Accepted Answer

A)  Cash, debit; Retained Earnings, credit 
B)  Accounts Payable, debit; Cash, credit 
C)  Accounts Receivable, debit; Cash, credit 
D)  Accounts Payable, debit; Account Receivable, credit 
A)  Cash, debit; Retained Earnings, credit 
B)  Accounts Payable, debit; Cash, credit 
C)  Accounts Receivable, debit; Cash, credit 
D)  Accounts Payable, debit; Account Receivable, credit

Question 8

Prarie Clinic purchased X-ray equipment for $7,500, paid $2,250 down, with the remainder to be paid later. The correct entry would be

Accepted Answer

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

Question 9

The chart of accounts for the Corning Corporation includes the following:   On journal page 3, the following transaction was found:
  What is the posting reference that will be found in the Cash account?

Accepted Answer

A)  11 
B)  15 
C)  3 
D)  none of these 
A)  11 
B)  15 
C)  3 
D)  none of these

Question 10

Which of the following groups of accounts have a normal debit balance?

Accepted Answer

A)  revenues, liabilities 
B)  assets, liabilities 
C)  liabilities, expenses 
D)  assets, expenses 
A)  revenues, liabilities 
B)  assets, liabilities 
C)  liabilities, expenses 
D)  assets, expenses

Question 11

Prepaid expenses are an example of an expense.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following entries records the acquisition of office supplies on account?

Accepted Answer

A)  Office Supplies, debit; Cash, credit 
B)  Cash, debit; Office Supplies, credit 
C)  Office Supplies, debit; Accounts Payable, credit 
D)  Accounts Receivable, debit; Office Supplies, credit 
A)  Office Supplies, debit; Cash, credit 
B)  Cash, debit; Office Supplies, credit 
C)  Office Supplies, debit; Accounts Payable, credit 
D)  Accounts Receivable, debit; Office Supplies, credit

Question 13

In accordance with the rules of debit and credit, which of the following is true?

Accepted Answer

A)  Debits increase assets. 
B)  Credits increase assets. 
C)  Debits increase both assets and retained earnings. 
D)  Credits increase both assets and liabilities. 
A)  Debits increase assets. 
B)  Credits increase assets. 
C)  Debits increase both assets and retained earnings. 
D)  Credits increase both assets and liabilities.

Question 14

The process of transferring the debits and credits from the journal entries to the ledger accounts is called

Accepted Answer

A)  sliding 
B)  transposing 
C)  journalizing 
D)  posting 
A)  sliding 
B)  transposing 
C)  journalizing 
D)  posting

Question 15

Randomly listed below are the steps for preparing a trial balance:   What is the proper order of these steps?

Accepted Answer

A)  (3), (2), (4), (1) 
B)  (2), (3), (4), (1) 
C)  (3), (2), (1), (4) 
D)  (4), (3), (2), (1) 
A)  (3), (2), (4), (1) 
B)  (2), (3), (4), (1) 
C)  (3), (2), (1), (4) 
D)  (4), (3), (2), (1)

Question 16

On January 1, 2010, Cary Parsons established a catering service. Listed below are accounts she would like to open in the general ledger. List the accounts in the order in which they should appear in the ledger and propose a two-digit account numbering scheme that is consistent with the rules of a proper chart of accounts.

$ \begin{array}{ll}\text { 1. } & \text { Cash } \ \text { 2. } & \text { Supplies } \ \text { 3. } & \text { Equipment } \ \text { 4. } & \text { Accounts Payable } \ \text { 5. } & \text { Capital Stock } \ \text { 6. } & \text { Wages Expense } \ \text { 7. } & \text { Rent Expense } \ \text { 8. } & \text { Truck } \ \text { 9. } & \text { Utilities Expense } \ \text { 10. } & \text { Dividends } \ \text { 11. } & \text { Truck Expense } \ \text { 12. } & \text { Prepaid Insurance } \  \text { 13. } & \text { Fees Earned } \ \text { 14. } & \text { Misceellaneous Expense } \ \text { 15. } & \text { Insurance Expense } \ \text { 16. } & \text { Notes Payable } \ \text { 17. } & \text { RetainedEarnings } \ 18 . & \text { Accounts Receivable }\end{array} $

Accepted Answer

11 Cash
12 Accounts Receivable
13 Suppli

Question 17

For a month's transactions for a typical medium-sized business, the salary expense account is likely to have only credit entries.

Accepted Answer

A) True 
 B)False

Question 18

The posting process will include the transfer of the following information from the journal to the account.

Accepted Answer

A)  date, amount (debit or credit) 
B)  date, amount (debit or credit), journal page number 
C)  amount (debit or credit), account number 
D)  date, amount (debit or credit) account number 
A)  date, amount (debit or credit) 
B)  date, amount (debit or credit), journal page number 
C)  amount (debit or credit), account number 
D)  date, amount (debit or credit) account number

Question 19

All of the following occur with a double-entry accounting system except

Accepted Answer

A)  The accounting equation remains in balance. 
B)  The sum of all debits is always equal to the sum of all credits in each journal entry. 
C)  Each business transaction will have only two entries. 
D)  Every transaction affects at least two accounts. 
A)  The accounting equation remains in balance. 
B)  The sum of all debits is always equal to the sum of all credits in each journal entry. 
C)  Each business transaction will have only two entries. 
D)  Every transaction affects at least two accounts.

Question 20

Transactions are listed in the journal chronologically.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing Transactions

Accounts are classified in the ledger

The normal balance of an expense account is a credit.

Expenses follow the same debit and credit rules as

A debit balance in which of the following accounts would indicate a likely error?

Which of the following statements is not true about liabilities?

Cash was paid by Ari's Alarm Service to creditors on account. Which of the following entries for Ari's Alarm Service records this transaction?

Prarie Clinic purchased X-ray equipment for $7,500, paid $2,250 down, with the remainder to be paid later. The correct entry would be

The chart of accounts for the Corning Corporation includes the following: On journal page 3, the following transaction was found: What is the posting reference that will be found in the Cash account?

Which of the following groups of accounts have a normal debit balance?

Prepaid expenses are an example of an expense.

Which of the following entries records the acquisition of office supplies on account?

In accordance with the rules of debit and credit, which of the following is true?

The process of transferring the debits and credits from the journal entries to the ledger accounts is called

Randomly listed below are the steps for preparing a trial balance: What is the proper order of these steps?

For a month's transactions for a typical medium-sized business, the salary expense account is likely to have only credit entries.

The posting process will include the transfer of the following information from the journal to the account.

All of the following occur with a double-entry accounting system except

Transactions are listed in the journal chronologically.

Introduction to Accounting and Business

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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