Question 1

Which of the following is not considered to be a liability?

Accepted Answer

A)  Wages Payable 
B)  Accounts Receivable 
C)  Unearned Revenues 
D)  Accounts Payable 
A)  Wages Payable 
B)  Accounts Receivable 
C)  Unearned Revenues 
D)  Accounts Payable

Question 2

In which of the following types of accounts are decreases recorded with debits?

Accepted Answer

A)  assets 
B)  revenues 
C)  expenses 
D)  dividends 
A)  assets 
B)  revenues 
C)  expenses 
D)  dividends

Question 3

Below is the unadjusted trial balance for Dawson Designs at December 31, 2011 - the end of its first year in business.
(1) Identify the errors in the following trial balance. All accounts have normal balances.
(2) Prepare a corrected trial balance.

Accepted Answer

(1)
a. The debit column is added incorre

Question 4

Which of the following stockholder equity accounts follow the same debit and credit rules as liabilities?

Accepted Answer

A)  Capital Stock only 
B)  Dividends only 
C)  Retained Earnings and Capital Stock 
D)  Retained Earnings, Capital Stock, and Dividends 
A)  Capital Stock only 
B)  Dividends only 
C)  Retained Earnings and Capital Stock 
D)  Retained Earnings, Capital Stock, and Dividends

Question 5

Net income will result when

Accepted Answer

A)  revenues (credits) > expenses (debits) 
B)  revenues (credits)  revenues (credits) 
A)  revenues (credits) > expenses (debits) 
B)  revenues (credits)  revenues (credits)

Question 6

The purchase of supplies on account was recorded and posted as a debit to Supplies for $500 and a credit to Accounts Receivable for $500. The correcting entry would include a:

Accepted Answer

A)  credit to Accounts Receivable for $500 
B)  credit to Accounts Receivable for $1,000 
C)  credit to Accounts Payable for $500 
D)  credit to Accounts Payable for $1,000 
A)  credit to Accounts Receivable for $500 
B)  credit to Accounts Receivable for $1,000 
C)  credit to Accounts Payable for $500 
D)  credit to Accounts Payable for $1,000

Question 7

A chart of accounts is a listing of accounts that make up the journal.

Accepted Answer

A) True 
 B)False

Question 8

The debit side of an account

Accepted Answer

A)  depends on whether the account is an asset, liability or stockholders' equity item 
B)  can be either side of the account depending on how the accountant set up the system 
C)  is the right side of the account 
D)  is the left side of the account 
A)  depends on whether the account is an asset, liability or stockholders' equity item 
B)  can be either side of the account depending on how the accountant set up the system 
C)  is the right side of the account 
D)  is the left side of the account

Question 9

Expenses can result from

Accepted Answer

A)  paying dividends 
B)  consuming services 
C)  using up liabilities 
D)  all of these 
A)  paying dividends 
B)  consuming services 
C)  using up liabilities 
D)  all of these

Question 10

Office supplies purchased by Ari's Alarm Service on account were returned. Which of the following entries for Ari's Alarm Service records this transaction?

Accepted Answer

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

Question 11

Expense accounts are increased by credits.

Accepted Answer

A) True 
 B)False

Question 12

The post reference notation used in the journal is the page number.

Accepted Answer

A) True 
 B)False

Question 13

Which one of the statements below is not a purpose for the journal?

Accepted Answer

A)  to show increases and decreases in accounts 
B)  to show a chronological order by date 
C)  to show a complete transaction in one place 
D)  to help posting transactions to ledger 
A)  to show increases and decreases in accounts 
B)  to show a chronological order by date 
C)  to show a complete transaction in one place 
D)  to help posting transactions to ledger

Question 14

A trial balance determines the accuracy of the numbers.

Accepted Answer

A) True 
 B)False

Question 15

Expenses use up assets or consume services in the process of generating revenues.

Accepted Answer

A) True 
 B)False

Question 16

Several transactions are listed below, with the accounting equation stated to the right side of each. Use the following identification codes to indicate the effects of each transaction on the accounting equation. Write your answers in the space provided under the accounting equation. You need an identification code for each element of the accounting equation. An example is given before the first transaction.

Accepted Answer

@#IMG-DLM& While the trend in sales reve

Question 17

The Post. Ref. columns are used to trace transactions from the journal to the accounts. What will be entered in the Post. Ref. column of (a) the journal and (b) the account?

Accepted Answer

A)  (a) the amount of the debit or credit (b) the journal page number 
B)  (a) the journal page number (b) the date of the transaction 
C)  (a) the journal page number, (b) the account number 
D)  (a) the account number, (b) the journal page number 
A)  (a) the amount of the debit or credit (b) the journal page number 
B)  (a) the journal page number (b) the date of the transaction 
C)  (a) the journal page number, (b) the account number 
D)  (a) the account number, (b) the journal page number

Question 18

Journal entries can have more than two accounts as long as the debits equal the credits.

Accepted Answer

A) True 
 B)False

Question 19

McMann Company has a condensed income statement as shown::   Using horizontal analysis, calculate the amount and percent change for Sales. Round to one decimal place.

Accepted Answer

A)  $32,500, 19.6% 
B)  $18,000, 10.9% 
C)  $35,000, 17.7% 
D)  $17,000, 9.4% 
A)  $32,500, 19.6% 
B)  $18,000, 10.9% 
C)  $35,000, 17.7% 
D)  $17,000, 9.4%

Question 20

A dividends account records amounts paid to stockholders.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing Transactions

Which of the following is not considered to be a liability?

In which of the following types of accounts are decreases recorded with debits?

Below is the unadjusted trial balance for Dawson Designs at December 31, 2011 - the end of its first year in business. (1) Identify the errors in the following trial balance. All accounts have normal balances. (2) Prepare a corrected trial balance.

Which of the following stockholder equity accounts follow the same debit and credit rules as liabilities?

Net income will result when

The purchase of supplies on account was recorded and posted as a debit to Supplies for $500 and a credit to Accounts Receivable for $500. The correcting entry would include a:

A chart of accounts is a listing of accounts that make up the journal.

The debit side of an account

Expenses can result from

Office supplies purchased by Ari's Alarm Service on account were returned. Which of the following entries for Ari's Alarm Service records this transaction?

Expense accounts are increased by credits.

The post reference notation used in the journal is the page number.

Which one of the statements below is not a purpose for the journal?

A trial balance determines the accuracy of the numbers.

Expenses use up assets or consume services in the process of generating revenues.

The Post. Ref. columns are used to trace transactions from the journal to the accounts. What will be entered in the Post. Ref. column of (a) the journal and (b) the account?

Journal entries can have more than two accounts as long as the debits equal the credits.

McMann Company has a condensed income statement as shown:: Using horizontal analysis, calculate the amount and percent change for Sales. Round to one decimal place.

A dividends account records amounts paid to stockholders.

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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