Question 1

All of the following are liability accounts except:

Accepted Answer

A)  Accounts Payable. 
B)  Unearned Ticket Revenue. 
C)  Taxes Payable. 
D)  Commissions Earned. 
E)  Notes Payable. 
A)  Accounts Payable. 
B)  Unearned Ticket Revenue. 
C)  Taxes Payable. 
D)  Commissions Earned. 
E)  Notes Payable.

Question 2

A debit:

Accepted Answer

A)  Always increases an account. 
B)  Is the right-hand side of a T-account. 
C)  Always decreases an account. 
D)  Is the left-hand side of a T-account. 
E)  Is not need to record a transaction. 
A)  Always increases an account. 
B)  Is the right-hand side of a T-account. 
C)  Always decreases an account. 
D)  Is the left-hand side of a T-account. 
E)  Is not need to record a transaction.

Question 3

A simple account form widely used in accounting as a tool to understand how debits and credits affect an account balance is called a:

Accepted Answer

A)  Withdrawals account. 
B)  Capital account. 
C)  Drawing account. 
D)  T-account. 
E)  Balance column sheet. 
A)  Withdrawals account. 
B)  Capital account. 
C)  Drawing account. 
D)  T-account. 
E)  Balance column sheet.

Question 4

Inge Industries received $3,000 from a customer for services rendered and not previously recorded. Inge's general journal entry to record this transaction will be:

Accepted Answer

A)  Debit Services Revenue, credit Accounts Receivable. 
B)  Debit Cash, credit Accounts Payable. 
C)  Debit Cash, credit Accounts Receivable. 
D)  Debit Cash, credit Services Revenue. 
E)  Debit Accounts Payable, credit Services Revenue. 
A)  Debit Services Revenue, credit Accounts Receivable. 
B)  Debit Cash, credit Accounts Payable. 
C)  Debit Cash, credit Accounts Receivable. 
D)  Debit Cash, credit Services Revenue. 
E)  Debit Accounts Payable, credit Services Revenue.

Question 5

On April 30, Holden Company had an Accounts Receivable balance of $18,000. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The May 31 Accounts Receivable balance was $13,000. What was the amount of credit sales during May?

Accepted Answer

A)  $5,000. 
B)  $47,000. 
C)  $52,000. 
D)  $57,000. 
E)  $32,000. 
A)  $5,000. 
B)  $47,000. 
C)  $52,000. 
D)  $57,000. 
E)  $32,000.

Question 6

The third step in the analyzing and recording process is to post the information to ________________________.

Accepted Answer

The answer of The third step in the analyzing and...

Question 7

Unearned revenues are:

Accepted Answer

A)  Revenues that have been earned and received in cash. 
B)  Revenues that have been earned but not yet collected in cash. 
C)  Liabilities created when a customer pays in advance for products or services before the revenue is earned. 
D)  Recorded as an asset in the accounting records. 
E)  Increases to owners' capital. 
A)  Revenues that have been earned and received in cash. 
B)  Revenues that have been earned but not yet collected in cash. 
C)  Liabilities created when a customer pays in advance for products or services before the revenue is earned. 
D)  Recorded as an asset in the accounting records. 
E)  Increases to owners' capital.

Question 8

The balance sheet provides a link between beginning and ending income statements.

Accepted Answer

A) True 
 B)False

Question 9

Generally, the ordering of accounts in a trial balance typically follows their identification number from the chart of accounts, that is, assets first, then liabilities, then owner's capital and withdrawals, followed by revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 10

The first step in the processing of a transaction is to analyze the transaction and source documents.

Accepted Answer

A) True 
 B)False

Question 11

A formal promise to pay (in the form of a promissory note) a future amount is a(n):

Accepted Answer

A)  Unearned revenue. 
B)  Prepaid expense. 
C)  Credit account. 
D)  Note payable. 
E)  Account receivable. 
A)  Unearned revenue. 
B)  Prepaid expense. 
C)  Credit account. 
D)  Note payable. 
E)  Account receivable.

Question 12

Of the following errors, which one by itself will cause the trial balance to be out of balance?

Accepted Answer

A)  A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense. 
B)  A $100 cash receipt from a customer in payment of his account posted as a $100 debit to Cash and a $10 credit to Accounts Receivable. 
C)  A $75 cash receipt from a customer in payment of his account posted as a $75 debit to Cash and a $75 credit to Cash. 
D)  A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash. 
E)  An $800 prepayment from a customer for services to be rendered in the future was posted as an $800 debit to Unearned Revenue and an $800 credit to Cash. 
A)  A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense. 
B)  A $100 cash receipt from a customer in payment of his account posted as a $100 debit to Cash and a $10 credit to Accounts Receivable. 
C)  A $75 cash receipt from a customer in payment of his account posted as a $75 debit to Cash and a $75 credit to Cash. 
D)  A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash. 
E)  An $800 prepayment from a customer for services to be rendered in the future was posted as an $800 debit to Unearned Revenue and an $800 credit to Cash.

Question 13

The numbering system used in a company's chart of accounts:

Accepted Answer

A)  Is the same for all companies. 
B)  Is determined by generally accepted accounting principles. 
C)  Depends on the source documents used in the accounting process. 
D)  Typically begins with balance sheet accounts. 
E)  Typically begins with income statement accounts. 
A)  Is the same for all companies. 
B)  Is determined by generally accepted accounting principles. 
C)  Depends on the source documents used in the accounting process. 
D)  Typically begins with balance sheet accounts. 
E)  Typically begins with income statement accounts.

Question 14

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

Accepted Answer

A)  Recorded as a debit to an unearned revenue account. 
B)  Recorded as a debit to a prepaid expense account. 
C)  Recorded as a credit to an unearned revenue account. 
D)  Recorded as a credit to a prepaid expense account. 
E)  Not recorded in the accounting records until the earnings process is complete. 
A)  Recorded as a debit to an unearned revenue account. 
B)  Recorded as a debit to a prepaid expense account. 
C)  Recorded as a credit to an unearned revenue account. 
D)  Recorded as a credit to a prepaid expense account. 
E)  Not recorded in the accounting records until the earnings process is complete.

Question 15

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

Accepted Answer

A)  Total Equity/Total Liabilities. 
B)  Total Liabilities/Total Equity. 
C)  Total Liabilities/Total Assets. 
D)  Total Assets/Total Liabilities. 
E)  Total Equity/Total Assets. 
A)  Total Equity/Total Liabilities. 
B)  Total Liabilities/Total Equity. 
C)  Total Liabilities/Total Assets. 
D)  Total Assets/Total Liabilities. 
E)  Total Equity/Total Assets.

Question 16

A customer's promise to pay is called an account payable to the seller.

Accepted Answer

A) True 
 B)False

Question 17

Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a:

Accepted Answer

A)  Debit to Accounts Payable. 
B)  Debit to Accounts Receivable. 
C)  Credit to Cash. 
D)  Credit to Accounts Payable. 
E)  Credit to Wisconsin Rentals, Capital. 
A)  Debit to Accounts Payable. 
B)  Debit to Accounts Receivable. 
C)  Credit to Cash. 
D)  Credit to Accounts Payable. 
E)  Credit to Wisconsin Rentals, Capital.

Exam 2: Analyzing and Recording Transactions

All of the following are liability accounts except:

A debit:

A simple account form widely used in accounting as a tool to understand how debits and credits affect an account balance is called a:

Inge Industries received $3,000 from a customer for services rendered and not previously recorded. Inge's general journal entry to record this transaction will be:

On April 30, Holden Company had an Accounts Receivable balance of $18,000. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The May 31 Accounts Receivable balance was $13,000. What was the amount of credit sales during May?

The third step in the analyzing and recording process is to post the information to ________________________.

Unearned revenues are:

The balance sheet provides a link between beginning and ending income statements.

Generally, the ordering of accounts in a trial balance typically follows their identification number from the chart of accounts, that is, assets first, then liabilities, then owner's capital and withdrawals, followed by revenues and expenses.

The first step in the processing of a transaction is to analyze the transaction and source documents.

A formal promise to pay (in the form of a promissory note) a future amount is a(n):

Of the following errors, which one by itself will cause the trial balance to be out of balance?

The numbering system used in a company's chart of accounts:

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

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

A customer's promise to pay is called an account payable to the seller.

Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a:

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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