Question 1

Withdrawals by the owner are a business expense.

Accepted Answer

A) True 
 B)False  False

Question 2

Prepaid expenses are:

Accepted Answer

A)  Payments made for products and services that do not ever expire. 
B)  Classified as liabilities on the balance sheet. 
C)  Decreases in equity. 
D)  Assets that represent prepayments of future expenses. 
E)  Promises of payments by customers. 
A)  Payments made for products and services that do not ever expire. 
B)  Classified as liabilities on the balance sheet. 
C)  Decreases in equity. 
D)  Assets that represent prepayments of future expenses. 
E)  Promises of payments by customers. D

Question 3

Identify each of the following items would likely serve as a source document by marking an X in the appropriate column. The first one is done as an example

Accepted Answer

Answers will vary

Question 4

Explain the difference between a ledger and a chart of accounts.

Accepted Answer

A ledger is a record containing all of t

Question 5

A debit is used to record:

Accepted Answer

A)  A decrease in an asset account. 
B)  A decrease in an expense account. 
C)  An increase in a revenue account. 
D)  An increase in the balance of an owner's capital account. 
E)  An increase in the balance of the owner's withdrawals account. 
A)  A decrease in an asset account. 
B)  A decrease in an expense account. 
C)  An increase in a revenue account. 
D)  An increase in the balance of an owner's capital account. 
E)  An increase in the balance of the owner's withdrawals account.

Question 6

A transaction that decreases an asset account and increases a liability account must also affect one or more other accounts.

Accepted Answer

A) True 
 B)False

Question 7

If a company provides services to a customer on credit the selling company should credit Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 8

If a company is highly leveraged, this means that it has relatively low risk of not being able to repay its debt.

Accepted Answer

A) True 
 B)False

Question 9

A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):

Accepted Answer

A)  Account. 
B)  Trial balance. 
C)  Journal. 
D)  T-account. 
E)  Balance column account. 
A)  Account. 
B)  Trial balance. 
C)  Journal. 
D)  T-account. 
E)  Balance column account.

Question 10

List the steps in recording transactions.

Accepted Answer

The answer of List the steps in recording transactions....

Question 11

In which of the following situations would the trial balance not balance?

Accepted Answer

A)  A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash. 
B)  The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable. 
C)  A $50 cash receipt for the performance of a service was not recorded at all. 
D)  The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200. 
E)  The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750. 
A)  A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash. 
B)  The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable. 
C)  A $50 cash receipt for the performance of a service was not recorded at all. 
D)  The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200. 
E)  The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750.

Question 12

Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of owner's equity, and a balance sheet. Sal made no additional investments in the company during the year.

Accepted Answer

The answer of Based on the following trial balance for...

Question 13

A balance column ledger account is:

Accepted Answer

A)  An account entered on the balance sheet. 
B)  An account with debit and credit columns for posting entries and another column for showing the balance of the account after each entry is posted. 
C)  Another name for the withdrawals account. 
D)  An account used to record the transfers of assets from a business to its owner. 
E)  A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction. 
A)  An account entered on the balance sheet. 
B)  An account with debit and credit columns for posting entries and another column for showing the balance of the account after each entry is posted. 
C)  Another name for the withdrawals account. 
D)  An account used to record the transfers of assets from a business to its owner. 
E)  A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.

Question 14

A trial balance that is in balance is proof that no errors were made in journalizing the transactions, posting to the ledger, and preparing the trial balance.

Accepted Answer

A) True 
 B)False

Question 15

An accountant has debited an account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction?

Accepted Answer

A)  Credit another asset account for $1,500. 
B)  Credit another liability account for $1,500. 
C)  Credit an expense account for $1,500. 
D)  Credit the owner's capital account for $1,500. 
E)  Debit another asset account for $1,500. 
A)  Credit another asset account for $1,500. 
B)  Credit another liability account for $1,500. 
C)  Credit an expense account for $1,500. 
D)  Credit the owner's capital account for $1,500. 
E)  Debit another asset account for $1,500.

Question 16

A $130 credit to Office Equipment was credited to Fees Earned by mistake. By what amounts are the accounts under- or overstated as a result of this error?

Accepted Answer

A)  Office Equipment, understated $130; Fees Earned, overstated $130. 
B)  Office Equipment, understated $260; Fees Earned, overstated $130. 
C)  Office Equipment, overstated $130; Fees Earned, overstated $130. 
D)  Office Equipment, overstated $130; Fees Earned, understated $130. 
E)  Office Equipment, overstated $260; Fees Earned, understated $130. 
A)  Office Equipment, understated $130; Fees Earned, overstated $130. 
B)  Office Equipment, understated $260; Fees Earned, overstated $130. 
C)  Office Equipment, overstated $130; Fees Earned, overstated $130. 
D)  Office Equipment, overstated $130; Fees Earned, understated $130. 
E)  Office Equipment, overstated $260; Fees Earned, understated $130.

Question 17

List the steps in processing transactions.

Accepted Answer

Business transactions and events are the

Question 18

Explain debits and credits and their role in the accounting system.

Accepted Answer

Debit refers to the left side of an acco

Question 19

A ___________________ is a record containing all accounts for a company along with their balances.

Accepted Answer

The answer of A ___________________ is a record containing all...

Question 20

On September 30, the Cash account of Value Company had a normal balance of $5,000. During September, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of September?

Accepted Answer

A)  A $0 balance. 
B)  A $4,300 debit balance. 
C)  A $4,300 credit balance. 
D)  A $5,700 debit balance. 
E)  A $5,700 credit balancE.Beg. Bal. + $12,200 - $11,500 = $5,000 
A)  A $0 balance. 
B)  A $4,300 debit balance. 
C)  A $4,300 credit balance. 
D)  A $5,700 debit balance. 
E)  A $5,700 credit balancE.Beg. Bal. + $12,200 - $11,500 = $5,000

Exam 2: Analyzing and Recording Transactions

Withdrawals by the owner are a business expense.

Prepaid expenses are:

Identify each of the following items would likely serve as a source document by marking an X in the appropriate column. The first one is done as an example

Explain the difference between a ledger and a chart of accounts.

A debit is used to record:

A transaction that decreases an asset account and increases a liability account must also affect one or more other accounts.

If a company provides services to a customer on credit the selling company should credit Accounts Receivable.

If a company is highly leveraged, this means that it has relatively low risk of not being able to repay its debt.

A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):

List the steps in recording transactions.

In which of the following situations would the trial balance not balance?

Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of owner's equity, and a balance sheet. Sal made no additional investments in the company during the year.

A balance column ledger account is:

A trial balance that is in balance is proof that no errors were made in journalizing the transactions, posting to the ledger, and preparing the trial balance.

An accountant has debited an account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction?

A $130 credit to Office Equipment was credited to Fees Earned by mistake. By what amounts are the accounts under- or overstated as a result of this error?

List the steps in processing transactions.

Explain debits and credits and their role in the accounting system.

A ___________________ is a record containing all accounts for a company along with their balances.

On September 30, the Cash account of Value Company had a normal balance of $5,000. During September, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of September?

Accounting in Business

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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