Question 1

Which of the following items would NOT be included in the journal entry for a transaction?

Accepted Answer

A) The titles of the accounts debited 
B) The dollar amount credited 
C) The source documents initiating the transaction 
D) The date the accounting transaction was entered

Question 2

Performing services on account would:

Accepted Answer

A) decrease revenue and decrease stockholders' equity. 
B) increase net income and stockholders' equity. 
C) decrease both assets and liabilities. 
D) increase assets and decrease stockholders' equity.

Question 3

A trial balance is an optional financial statement that reports the financial position of the company as of a given day in time.

Accepted Answer

A) True 
 B)False

Question 4

The accounting transaction to record a loan would include a credit to:

Accepted Answer

A) Utilities Expense. 
B) Notes Payable. 
C) Accounts Receivable. 
D) Cash.

Question 5

The retained earnings account represents the excess of net income over dividends retained in the business since its inception.

Accepted Answer

A) True 
 B)False

Question 6

Posting accounting transactions avoids the necessity of journalizing transactions, and the use of T- accounts.

Accepted Answer

A) True 
 B)False

Question 7

The purchase of office computers for cash would include a debit to:

Accepted Answer

A) Office Equipment and a credit to Cash. 
B) Cash and a credit to Office Equipment. 
C) Accounts Receivable and credit to Office Equipment. 
D) Office Equipment and a credit to Accounts Payable.

Question 8

The purchase of an automobile involving a cash down payment and a promise to pay the balance in the future would include a debit to:

Accepted Answer

A) Cash and a credit to Automobile. 
B) Cash and a debit to Note Payable. 
C) Note Payable and a credit to Cash. 
D) none of the above.

Question 9

A chart of accounts is:

Accepted Answer

A) a list of all of the accounts of the organization. 
B) a source document. 
C) prepared as the first step in analyzing transactions. 
D) a list of all of the accounts of the organization and their related account numbers.

Question 10

The normal balance of Dividends is a because it is an)_ account.

Accepted Answer

A) debit, asset 
B) debit, stockholders' equity 
C) credit, liability 
D) credit, stockholders' equity

Question 11

The term "double- entry accounting" indicates that the accountant:

Accepted Answer

A) uses both the general journal and the general ledger when recording transactions. 
B) computes the income statement and balance sheet effect of each transaction. 
C) records both sides of each transaction in the accounts affected. 
D) identifies both the cash inflows and the cash outflows.

Question 12

A trial balance is:

Accepted Answer

A) a list of balance sheet accounts with their balances. 
B) prepared before the posting process is completed. 
C) a list of all accounts with their balances. 
D) a list of income statement accounts with their balances.

Question 13

Assets, owners' equity and dividends are all increased by debits.

Accepted Answer

A) True 
 B)False

Question 14

The normal balance of the Dividends account is a _ because it decreases _ .

Accepted Answer

A) debit, expenses 
B) debit, assets 
C) debit, stockholders' equity 
D) credit, stockholders' equity

Question 15

A business purchases a truck by signing a note payable to the seller. This transaction would include a:

Accepted Answer

A) debit to Note Payable. 
B) credit to Note Payable. 
C) debit to Prepaid Maintenance. 
D) credit to Truck.

Exam 2: Transaction Analysis

Which of the following items would NOT be included in the journal entry for a transaction?

Performing services on account would:

A trial balance is an optional financial statement that reports the financial position of the company as of a given day in time.

The accounting transaction to record a loan would include a credit to:

The retained earnings account represents the excess of net income over dividends retained in the business since its inception.

Posting accounting transactions avoids the necessity of journalizing transactions, and the use of T- accounts.

The purchase of office computers for cash would include a debit to:

The purchase of an automobile involving a cash down payment and a promise to pay the balance in the future would include a debit to:

A chart of accounts is:

The normal balance of Dividends is a because it is an) _ account.

The term "double- entry accounting" indicates that the accountant:

A trial balance is:

Assets, owners' equity and dividends are all increased by debits.

The normal balance of the Dividends account is a _ because it decreases _ .

A business purchases a truck by signing a note payable to the seller. This transaction would include a: