Question 1

The first step in the journalizing process is to identify the transaction and its data.

Accepted Answer

A) True 
 B)False

Question 2

Total debits must always equal total credits.

Accepted Answer

A) True 
 B)False

Question 3

A $500 rent bill received for the current period that will be paid in the following period would include a:

Accepted Answer

A) debit to accounts payable for $500. 
B) credit to rent expense for $500. 
C) debit to rent expense for $500. 
D) credit to cash for $500.

Question 4

A payment of $400 to a creditor, on account, will cause:

Accepted Answer

A) cash to be debited for $400. 
B) accounts receivable to be credited for $400. 
C) accounts payable to be debited for $400. 
D) accounts payable to be credited for $400.

Question 5

The owner withdrawing cash for personal use would:

Accepted Answer

A) have no effect on assets. 
B) decrease owner's equity. 
C) decrease net income. 
D) increase assets.

Question 6

Table 2-2
The following is a list of the accounts and their balances appearing in the ledger of Martin Mann Garage as of December 31, 2019, the company's year end. The accounts are in alphabetical order and have normal balances. $\begin{array} { l r } 
\text { Accounts payable } & 1,350 \
\text { Accounts receivable } & 3,750 \
\text { Cash } & 1,200 \
\text { Equipment } & 37,800 \
\text { Gasoline expense } & 1,800 \
\text { Martin Mann, Capital } & 19,800 \
\text { Martin Mann, Withdrawals } & 1,500 \
\text { Notes payable } & 33,000 \
\text { Rent expense } & 3,600 \
\text { Repairs expense } & 1,950 \
\text { Salary expense } & 2,100 \
\text { Salary payable } & 300 \
\text { Service revenue } & 24,750 \
\text { Supplies } & 600 \
\text { Supplies expense } & 900 \
\text { Truck } & 24,000
\end{array}$
-Refer to Table 2-2. Prepare an Income statement for Martin Mann Garage for the year ended December 31, 2019.

Accepted Answer

The answer of Table 2-2
The following is a list of...

Question 7

All of the following are assets except:

Accepted Answer

A) cash. 
B) accounts receivable. 
C) land. 
D) accounts payable.

Question 8

A $75 payment for rent expense was posted as a debit to salary expense and a credit to cash. This error will cause:

Accepted Answer

A) the trial balance to be in balance. 
B) the sum of the credits to exceed the sum of the debits by $75. 
C) the sum of the debits to exceed the sum of the credits by $75. 
D) the sum of the debits to exceed the sum of the credits by $150.

Question 9

Which of the following groups of accounts have normal debit balances?

Accepted Answer

A) assets, revenues, and owner withdrawals 
B) assets, expenses, and owner withdrawals 
C) assets, liabilities, and capital 
D) assets, revenues, and expenses

Question 10

An organization's list of all its accounts and the related account numbers is called a:

Accepted Answer

A) balance sheet. 
B) chart of accounts. 
C) ledger. 
D) trial balance.

Question 11

All of the following are included in the journal entry for a transaction except:

Accepted Answer

A) the name of the person making the entry. 
B) the titles of the accounts to be debited and credited. 
C) the date of the transaction. 
D) the dollar amounts of the debit and credit.

Question 12

Journalize the following transactions for Redmond Storage and prepare a trial balance dated June 30, 2019.
a)Owner, Roger Redmond invested $10,000 cash into the business.
b)Rented an office and paid one month's rent, $1,100.
c)Purchased $450 of supplies on account.
d)Performed a service on account, $1,550.
e)Paid $2,500 cash for office furniture.
f)Owner, Roger Redmond withdrew $1,700 cash for personal use.
g)Collected $1,200 on account.

Accepted Answer

The answer of Journalize the following transactions for Redmond Storage...

Question 13

Posting involves:

Accepted Answer

A) transferring information from the general journal to the general ledger. 
B) using information from the general ledger to prepare the trial balance. 
C) using information from the general ledger to prepare the financial statements. 
D) transferring information from the general ledger to the general journal.

Question 14

An owner investment of a building, valued at $200,000, along with a $55,000 outstanding mortgage, into an entity would:

Accepted Answer

A) increase owner's equity $145,000. 
B) increase total assets $55,000. 
C) decrease liabilities $145,000. 
D) increase owner's equity $200,000.

Question 15

The normal balance of wages payable is a ________ because it is a(n)________ account.

Accepted Answer

A) credit; liability 
B) credit; revenue 
C) credit; owner's equity 
D) credit; asset

Question 16

State whether the following errors would cause the trial balance to be out of balance by placing a check mark in the appropriate column. $\begin{array}{c}
\begin{array}{l}
\
\
  \text { a) Services rendered for \( \$ 200 $ cash were recorded twice}\
 \text {  in the journal and posted twice to the ledger.}\
  \text { b) Services rendered on account for $ \$ 300 $ were recorded}\
 \text {  as services rendered for cash of $ \$ 300 $.}\
  \text {c)  A cash purchase of supplies for $ \$ 400 $ was recorded as a}\
 \text {  debit to supplies and a credit to accounts receivable for $ \$ 400 $}\
 \text { d)  A cash purchase of supplies for $ \$ 300 $ was posted as a}\
 \text {  debit to supplies for $ \$ 300 $ and a debit to cash for $ \$ 300 $.}\
  \text { e) A payment of $ \$ 200 $ on account was recorded as a debit}\
 \text {  to cash and a credit to accounts payable.}\
\text {   f)  A $ \$ 200 $ payment to employees for salaries was posted }\
 \text { as a debit to utilities expense and a credit to cash.}\
  \text { g) A $ \$ 600 $ cash withdrawal by the owner was recorded}\
  \text { as a debit to capital and a credit to cash.}
\end{array}
\begin{array}{c}
 \text { In}\
 \text { Balance}\
\
\underline{\quad\quad}\
\
\underline{\quad\quad}\
\underline{\quad\quad}\
\underline{\quad\quad}\
\
\underline{\quad\quad}\
\
\underline{\quad\quad}\
\
\underline{\quad\quad}\
\
\underline{\quad\quad}
\end{array}
\begin{array}{c}
 \text { Out of}\
 \text { Balance}\
\
\underline{\quad\quad}\
\
\underline{\quad\quad}\
\underline{\quad\quad}\
\underline{\quad\quad}\
\
\underline{\quad\quad}\
\
\underline{\quad\quad}\
\
\underline{\quad\quad}\
\
\underline{\quad\quad}
\end{array}
\end{array}\)

Accepted Answer

The answer of State whether the following errors would cause...

Question 17

Performing services on account would:

Accepted Answer

A) increase net income, decrease total assets, and decrease owner's equity. 
B) increase net income, increase owner's equity, and increase total assets. 
C) increase total assets and liabilities. 
D) decrease total assets, increase net income, and increase owner's equity.

Question 18

A journal is a chronological record of transactions.

Accepted Answer

A) True 
 B)False

Question 19

The purchase of a building by signing a note payable would:

Accepted Answer

A) increase owner's equity. 
B) increase total liabilities. 
C) decrease owner's equity. 
D) decrease total assets.

Question 20

Receiving a payment from a customer on account would:

Accepted Answer

A) increase both assets and owner's equity. 
B) increase net income and decrease liabilities. 
C) have no effect on total assets or owner's equity. 
D) decrease liabilities and increase owner's equity.

Exam 2: Recording Business Transactions

The first step in the journalizing process is to identify the transaction and its data.

Total debits must always equal total credits.

A $500 rent bill received for the current period that will be paid in the following period would include a:

A payment of $400 to a creditor, on account, will cause:

The owner withdrawing cash for personal use would:

All of the following are assets except:

A $75 payment for rent expense was posted as a debit to salary expense and a credit to cash. This error will cause:

Which of the following groups of accounts have normal debit balances?

An organization's list of all its accounts and the related account numbers is called a:

All of the following are included in the journal entry for a transaction except:

Posting involves:

An owner investment of a building, valued at $200,000, along with a $55,000 outstanding mortgage, into an entity would:

The normal balance of wages payable is a because it is a(n) account.

Performing services on account would:

A journal is a chronological record of transactions.

The purchase of a building by signing a note payable would:

Receiving a payment from a customer on account would:

Exam 2: Recording Business Transactions

The first step in the journalizing process is to identify the transaction and its data.

Total debits must always equal total credits.

A $500 rent bill received for the current period that will be paid in the following period would include a:

A payment of $400 to a creditor, on account, will cause:

The owner withdrawing cash for personal use would:

All of the following are assets except:

A $75 payment for rent expense was posted as a debit to salary expense and a credit to cash. This error will cause:

Which of the following groups of accounts have normal debit balances?

An organization's list of all its accounts and the related account numbers is called a:

All of the following are included in the journal entry for a transaction except:

Posting involves:

An owner investment of a building, valued at $200,000, along with a $55,000 outstanding mortgage, into an entity would:

The normal balance of wages payable is a ________ because it is a(n) ________ account.

Performing services on account would:

A journal is a chronological record of transactions.

The purchase of a building by signing a note payable would:

Receiving a payment from a customer on account would:

The normal balance of wages payable is a because it is a(n) account.