Question 1

The following transactions occurred during June for Campus Cycle Shop. Record the transactions below in the T accounts. Place the letter of the transaction next to the entry. Foot and calculate the ending balances of the T accounts where appropriate. a. Tyler invested $6,500 in the bike service from his personal savings account. b. Bought office equipment for cash, $900. c. Performed bike service for a customer on account, $1,000. d. Company cell phone bill received, but not paid, $80. e. Collected $300 from customer in transaction c. f. Tyler withdrew $100 for personal use. $$\begin{array}{l} \text {Cash 111 }\ \begin{array} { l | l r } \hline& \ & \end{array} \end{array}$$ $$\begin{array}{l} \text {Accounts Reœeivable 112 }\ \begin{array} { l | l r } \hline& \ & \end{array} \end{array}$$ $$\begin{array}{l} \text {Office Equipment 112 }\ \begin{array} { l | l r } \hline& \ & \end{array} \end{array}$$ $$\begin{array}{l} \text {Accounts Payable 211 }\ \begin{array} { l | l r } \hline& \ & \end{array} \end{array}$$ $$\begin{array}{l} \text {Tyler's Capital 311 }\ \begin{array} { l | l r } \hline& \ & \end{array} \end{array}$$ $$\begin{array}{l} \text {Tyler's Withdrawals 312 }\ \begin{array} { l | l r } \hline& \ & \end{array} \end{array}$$ $$\begin{array}{l} \text {Bike Fees 411 }\ \begin{array} { l | l r } \hline& \ & \end{array} \end{array}$$ $$\begin{array}{l} \text {Telephone Expense 512 }\ \begin{array} { l | l r } \hline& \ & \end{array} \end{array}$$

Accepted Answer

The answer of The following transactions occurred during June for...

Question 2

Withdrawals increase on the debit side of the account.

Accepted Answer

A) True 
 B)False

Question 3

Chuck, the owner of Computer Sales Co., paid his personal VISA bill using a company cheque. The correct entry to record the transaction is

Accepted Answer

A)  credit Cash, debit Withdrawals. 
B)  credit Cash, debit Supplies Expense. 
C)  credit Cash, debit Capital. 
D)  credit Cash, debit Accounts Receivable.

Question 4

The business incurred an expense and paid it immediately. To record this,

Accepted Answer

A)  an expense is debited and a liability is credited. 
B)  an expense is debited and an asset is credited. 
C)  an expense is debited and Capital is credited. 
D)  None of these are correct.

Question 5

Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits? $$\begin{array}{l}
\begin{array} {| l | l | } 
\hline \text {Cash}&\$1000 \
\hline \text {Equipment}&500\
\hline \text {Accounts Payable}&250\
\hline \text {Capital}&1000\\hline \text {Service Fees }&1000\
\hline \text {Salaries Expense}&750\\hline
\end{array}
\end{array}$$

Accepted Answer

A)  $3,250 debit, $3,250 credit 
B)  $1,125 debit, $1,125 credit 
C)  $4,500 debit, $4,500 credit 
D)  $2,250 debit, $2,250 credit

Question 6

Which of the following is prepared first?

Accepted Answer

A)  Balance sheet 
B)  Income statement 
C)  Statement of owner's equity 
D)  Trial balance

Question 7

The owner of Wolverines R Us paid his personal MasterCard bill using a company cheque. The correct entry to record the transaction is

Accepted Answer

A)  credit Cash; debit Capital. 
B)  credit Cash; debit Supplies Expense. 
C)  credit Cash; debit Withdrawals. 
D)  credit Cash; debit Accounts Receivable.

Question 8

Accounts Payable indicates monies owed to us by our clients or customers.

Accepted Answer

A) True 
 B)False

Question 9

A transaction that has more than one debit and one credit is called a

Accepted Answer

A)  chart of accounts. 
B)  compound entry. 
C)  ledger. 
D)  credit entry.

Question 10

Which of these statements about T accounts is FALSE?

Accepted Answer

A)  They are used mainly in classroom demonstrations. 
B)  They have both a left side and a right side. 
C)  They are used extensively in computer accounting. 
D)  Each account has a normal balance which is either a debit or a credit.

Question 11

The chart of accounts

Accepted Answer

A)  is a numbered list of all of the business' accounts. 
B)  allows accounts to be balanced more accurately. 
C)  can be expanded as the business grows. 
D)  A and C are correct.

Question 12

Extreme Home bought painting equipment on account for $2,200. The entry would include

Accepted Answer

A)  debit to Supplies Expense, $2,200; credit to Cash, $2,200. 
B)  debit to Equipment, $2,200; credit to Cash, $2,200. 
C)  debit to Equipment, $2,200; credit to Accounts Payable, $2,200. 
D)  debit to Supplies Expense, $2,200; credit to Accounts Payable, $2,200.

Question 13

The first step in analyzing a transaction is

Accepted Answer

A)  to decide if the accounts are increasing or decreasing. 
B)  to decide to which categories the accounts belong. 
C)  to decide where the amounts belong. 
D)  to decide which accounts are affected.

Question 14

The word "debit" comes from which language?

Accepted Answer

A)  Latin 
B)  French 
C)  Italian 
D)  Norsk

Question 15

When speaking of the Standard Account Form, it is TRUE to say that

Accepted Answer

A)  It is widely used in business records today. 
B)  The form has no room for indicating either a debit or a credit. 
C)  There is no Date column included in this form. 
D)  All of a company's accounts together form a ledger.

Question 16

One asset would be debited and another credited if

Accepted Answer

A)  the business provided services to a cash customer. 
B)  the business paid a creditor. 
C)  the business bought supplies paying cash. 
D)  the business provided services to a credit customer.

Question 17

Withdrawals and expenses are reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 18

Net income appears on which of the following financial reports?

Accepted Answer

A)  Balance sheet 
B)  Income statement and statement of owner's equity 
C)  Trial balance 
D)  Balance sheet and income statement

Question 19

The Office Supplies account is

Accepted Answer

A)  a revenue, and it has a normal debit balance. 
B)  an expense, and it has a normal credit balance. 
C)  an asset, and it has a normal debit balance. 
D)  an asset, and it has a normal credit balance.

Question 20

What would be the effect on accounts if the business provided services to a customer collecting cash?

Accepted Answer

A)  An asset would be debited and an expense credited. 
B)  Capital would be debited and revenue credited. 
C)  An asset would be debited and revenue credited. 
D)  An asset would be debited and Capital credited.

Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

Withdrawals increase on the debit side of the account.

Chuck, the owner of Computer Sales Co., paid his personal VISA bill using a company cheque. The correct entry to record the transaction is

The business incurred an expense and paid it immediately. To record this,

Which of the following is prepared first?

The owner of Wolverines R Us paid his personal MasterCard bill using a company cheque. The correct entry to record the transaction is

Accounts Payable indicates monies owed to us by our clients or customers.

A transaction that has more than one debit and one credit is called a

Which of these statements about T accounts is FALSE?

The chart of accounts

Extreme Home bought painting equipment on account for $2,200. The entry would include

The first step in analyzing a transaction is

The word "debit" comes from which language?

When speaking of the Standard Account Form, it is TRUE to say that

One asset would be debited and another credited if

Withdrawals and expenses are reported on the income statement.

Net income appears on which of the following financial reports?

The Office Supplies account is

What would be the effect on accounts if the business provided services to a customer collecting cash?