Question 1

All of the following accounts increase with debits, except

Accepted Answer

A)  Bank loans payable 
B)  Accounts receivable 
C)  Interest expense 
D)  Dividends A

Question 2

What business event is represented by a journal entry that shows a debit to supplies of $800 and a credit to accounts payable of $800?

Accepted Answer

A)  The company incurred supplies expense. 
B)  The company purchased supplies with cash. 
C)  The company used supplies. 
D)  The company purchased supplies on account. D

Question 3

What business event would be represented by a journal entry that shows a debit to cash of $500 and a credit to unearned revenue of $500?

Accepted Answer

A)  Cash has been paid out to a company that will rent the company space in the future. 
B)  The company has provided services to a customer, and the cash account has been increased. 
C)  Cash has been received by the company for services that have not yet been provided. 
D)  The company has refunded money to a customer, because the company did not provide the services it promised. C

Question 4

Which of the following bookkeeping errors will not cause a trial balance to be out of balance?

Accepted Answer

A)  Posting only the debit side of a journal entry to the general ledger, and forgetting to post the credit side 
B)  Adding the items in the cash account in the ledger improperly, while adding all other accounts properly 
C)  Posting a journal entry "backwards" by posting the debt entries as credits, and the credit entries as debits 
D)  Making a copying error while posting the debit side of a journal entry, and posting the credit side correctly 
E)  While the ledger will have wrong balances in certain accounts, the total debits will equal total credits

Question 5

On November 1, 2017, the Baumol Real Estate Corp. received $4,000 from a tenant, representing rent for November and December 2017, as well as January and February of 2018, and recorded the transaction with a journal entry to cash and to unearned revenue. Assuming there were no other journals made, Baumol should record which of the following on December 31, 2017?

Accepted Answer

A)  Debit unearned revenue, and credit rent revenue, for $4,000. 
B)  Debit unearned revenue, and credit rent revenue, for $2,000 
C)  Debit unearned revenue, and credit cash, for $2,000 
D)  Debit revenue, and credit unearned revenue, for $4,000 
E)  Half the rent received has been earned

Question 6

Allay Company purchased $6,500 of merchandise inventory on account. Which of the following entries would be required to record this transaction?

Accepted Answer

A)  Dr. Accounts Payable 6,500 Cr. Purchases 6,500 
B)  Dr. Inventory 6,500 Cr. Accounts Payable 6,500 
C)  Dr. Cost of Goods Sold 6,500 Cr. Accounts Payable 6,500 
D)  Cr. Accounts Payable 6,500 Cr. Inventory 6,500

Question 7

All of the following accounts increase with credits, except

Accepted Answer

A)  Sales revenues 
B)  Accounts payable 
C)  Dividends 
D)  Retained earnings

Question 8

In the year-end closing process, which account should not be reset to zero?

Accepted Answer

A)  Dividends 
B)  Sales revenues 
C)  Land 
D)  Supplies expense

Question 9

A company has recorded $38,000 in debits to a particular account, and has also recorded $14,000 of credits to that account. The account balance is

Accepted Answer

A)  $52,000 credit 
B)  $24,000 credit 
C)  24,000 debit 
D)  $52,000 debit

Question 10

In a typical accounting cycle, which of the following events occurs first?

Accepted Answer

A)  Preparing financial statements 
B)  Preparing an adjusted trial balance 
C)  Posting information from journals to the ledger 
D)  Preparing closing entries

Question 11

A company has recorded $25,000 in debits to a particular account, and has also recorded $14,000 of credits to that account. The account balance is

Accepted Answer

A)  $11,000 debit 
B)  $14,000 credit 
C)  $25,000 debit 
D)  $39,000 debit

Question 12

Which of the following bookkeeping errors will cause the total debits and total credits to be out of balance in the general ledger?

Accepted Answer

A)  Posting the debit side of a journal entry as $1,900 and the credit side as $9,100 
B)  Posting the debit side of the entry to the supplies account instead of to the supplies expense account 
C)  Accidentally posting an entry twice 
D)  Posting a journal entry "backwards" by posting the debt entries as credits, and the credit entries as debits

Question 13

On January 1, 2016, the Marlin Company purchased a tractor that cost $30,000, had a five-year useful life, and a $5,000 salvage value. Which of the following is the correct general journal entry to record depreciation expense for the 2016 fiscal year?

Accepted Answer

A)  Dr. Depreciation Expense $6,000 Cr. Accumulated depreciation $6,000 
B)  Dr. Accumulated depreciation $5,000 Cr. Depreciation expense $5,000 
C)  Dr. Depreciation expense $5,000 Cr. Cash $5,000 
D)  Dr. Depreciation expense $5,000 Cr. Accumulated depreciation $5,000

Question 14

What business event is represented by a journal entry that shows a debit to supplies of $9,000 and a credit to cash of $9,000?

Accepted Answer

A)  The company incurred supplies expense. 
B)  The company purchased supplies with cash. 
C)  The company used supplies. 
D)  The company purchased supplies on account.

Question 15

During December, an accountant does $700 of bookkeeping work for the Castorini Plumbing Corp., but does not bill the company until January. Which of the following is the appropriate journal entry that should be made in the December 31 balance sheet? (Assume the company prepares its balance sheet in February.)

Accepted Answer

A)  No entry, since no bill was received in December 
B)  A credit to cash, and a debit to accounting expense, of $700 
C)  A credit to accrued expenses payable, and a debit to accounting expense, of $700 
D)  A credit to accounting expense, and a debit to cash, of $700 
E)  No cash moved. Accrual accounting requires the expense be recognized

Question 16

On November 1, 2017, Schubert Corp. paid $1,200 in advance for an insurance policy that covered the company for six months. Assuming that Schubert recorded this purchase as an asset, the adjusting entry required on December 31, 2017 would include

Accepted Answer

A)  A debit to prepaid insurance for $1,200 
B)  A credit to prepaid insurance for $1,200 
C)  A credit to insurance expense for $400 
D)  A debit to insurance expense for $400

Question 17

On December 1, 2017, Physical Bank made a loan to a customer of $2,000,0000, with an annual interest rate of 6%. The loan, and all the interest, are due on November 30, 2018. The appropriate adjusting entry the bank should make on December 31, 2017 is

Accepted Answer

A)  Debit cash $10,000 and credit interest revenue $10,000 
B)  Debit interest revenue $10,000 and credit cash $10,000 
C)  Debit interest receivable $10,000 and credit interest revenue $10,000 
D)  Debit interest revenue $10,000 and credit interest receivable $10,000

Question 18

In a typical accounting cycle, which of the following events occurs last?

Accepted Answer

A)  Preparing adjustments 
B)  Preparing an adjusted trial balance 
C)  Posting information from journals to the ledger 
D)  Preparing closing entries

Question 19

What business event is represented by a journal entry that shows a debit to supplies expense of $9,000 and a credit to supplies of $9,000?

Accepted Answer