Question 1

If the beginning Cash account balance was $18,400, the ending balance was $10,200, and total cash received during the period was $44,000, what amount of cash was paid out during the period?

Accepted Answer

A)  $52,200 
B)  $35,800 
C)  $ 1,800 
D)  $42,400 
E)  None of the above

Question 2

Which of the following adjustments is an example of a deferral?

Accepted Answer

A)  The recording of wages earned by employees but not yet paid 
B)  The recording of periodic depreciation expense on equipment 
C)  The recording of fees earned but not yet billed or received 
D)  The recording of interest income earned but not yet received 
E)  None of the above

Question 3

A trial balance that balances is useful because it indicates with certainty that:

Accepted Answer

A)  All entries into accounts during the period were made correctly. 
B)  All accounts have normal balances. 
C)  Total debits in the general ledger equal total credits. 
D)  All of the above 
E)  None of the above

Question 4

The purchase of a delivery truck for $9,500 (on credit) was posted as debit to Delivery Trucks for $9,500, and a debit to Notes Payable for $9,500.
What effect would this error have on the trial balance?

Accepted Answer

A)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,500. 
B)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,500. 
C)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $19,000. 
D)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $19,000.

Question 5

Which of the following is a temporary account category?

Accepted Answer

A)  Assets 
B)  Expenses 
C)  Liabilities 
D)  Common stock 
E)  None of the above

Question 6

Transactions are first recorded in the general ledger and then posted to a journal.

Accepted Answer

A) True 
 B)False

Question 7

A compound entry does not necessarily have to maintain total debits equal to total credits.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a correct statement?

Accepted Answer

A)  Any type of business transaction may be recorded in the general journal. 
B)  Only compound journal entries are recorded in the general journal. 
C)  The word journalize means to transfer information from the general journal to the general ledger. 
D)  The use of a general journal eliminates the need for a general ledger. 
E)  None of the above

Question 9

When invoices are sent to customers billing them for services that have been performed, the correct transaction analysis is:

Accepted Answer

A)  Debit Accounts Receivable and credit Service Fees Earned 
B)  Debit Accounts Payable and credit Service Fees Earned 
C)  Debit Service Fees Earned and credit Accounts Receivable 
D)  Debit Cash and credit Service Fees Earned 
E)  Debit Accounts Receivable and credit Accounts Payable

Question 10

The Supplies account balance at the end of the period is $22,000. Supplies totaling $18,800 have been purchased during the period and debited to Supplies. A physical count shows $5,000 worth of supplies on hand at the end of the period.
The proper adjusting entry is:

Accepted Answer

A)  Supplies 5,000
Supplies Expense 5,000 
B)  Supplies Expense 4,700
Supplies 4,700 
C)  Supplies Expense 17,000
Supplies 17,000 
D)  Supplies Expense 18,800
Supplies 18,800 
E)  None of the above

Question 11

Which of the following journal entries will record the payment of a $850 accounts payable originally incurred for Office Supplies?

Accepted Answer

A)  Debit Office Supplies; credit Cash 
B)  Debit Office Supplies; credit Accounts Payable 
C)  Debit Cash; credit Accounts Payable 
D)  Debit Accounts Payable; credit Cash

Question 12

Terry Company purchased supplies for $7,000 on credit on January 1. On January 15, they made a cash payment of $2,000 to the supplier, and signed a one -year note for the remaining amount to settle the account.
Terry Company's journal entry on January 15 will include:

Accepted Answer

A)  Debit Notes Payable for $5,000 
B)  Credit Accounts Payable for $5,000 
C)  Credit Notes Payable for $5,000 
D)  Debit Cash for $5,000

Question 13

The post-closing trial balance includes only balance sheet accounts.

Accepted Answer

A) True 
 B)False

Question 14

West Company signed a one-year lease on April 1 and paid the $11,400 total year's rent in advance. West recorded the transaction as a debit to Prepaid Rent and a credit to Cash.
What adjusting entry should West make on December 31 (no previous adjustment has been made)?

Accepted Answer

A)  Prepaid Rent 2,850
Rent Expense 2,850 
B)  Prepaid Rent 8,550
Rent Expense 8,550 
C)  Rent Expense 8,550
Prepaid Rent 8,550 
D)  Rent Expense 2,850
Prepaid Rent 2,850 
E)  None of the above

Question 15

Recording the payment of dividends to shareholders involves:

Accepted Answer

A)  Debiting Dividends and crediting Cash 
B)  Debiting Cash and Common Stock 
C)  Debiting Withdrawal Expense and crediting Cash 
D)  Debiting Notes Payable and crediting Cash 
E)  None of the above

Question 16

JT's Grill, an upscale restaurant on the beach, has just completed its first full year of operations on December 31, 2019. It provides meals both in its restaurant and catering. Selected balances from its general ledger before year-end adjustments follow. (All balances are normal.)
  An analysis of the firm's records reveals the following:
a. The balance in Prepaid Advertising represents the amount paid for newspaper advertising for one year. The agreement, which calls for the same amount of space each month, covers the period from February 1, 2019, to January 31, 2020. JT's Grill did not advertise during its first month of operations.
b. Equipment purchased January 1, 2019, has an estimated life of eight years.
c. Utilities expense does not include the expense for December, estimated at $600. The bill will not arrive until January, 2020.
d. At year-end, employees have earned $6,200 in wages that will not be paid until January.
e. Supplies available at year-end amounted to $650.
f. At year-end, unpaid interest of $200 has accrued on the notes payable.
g. The firm's lease calls for rent of $500 per month payable on the first of each month, plus an amount equal to 1% of annual sales. The rental percentage is payable within 15 days after the end of the year.
Prepare adjusting entries in journal entry form.

Accepted Answer

The answer of JT's Grill, an upscale restaurant on the...

Question 17

Recording a stock issuance in exchange for cash involves:

Accepted Answer

A)  Debiting Cash and crediting Notes Payable 
B)  Debiting Cash and crediting Dividends 
C)  Debiting Cash and crediting Common Stock 
D)  Debiting Common Stock and crediting Cash 
E)  None of the above

Question 18

Match each of the numbered transactions of a corporation with Effect of Transaction indicating the debits and credits to be made (give the debit first)
-A shareholder purchased stock

Accepted Answer

A)  Debit an asset 
B)  Credit an asset 
C)  Debit a liability 
D)  Credit a liability 
E)  Debit common stock
F) Credit common stock
G) Debit dividends
H) Credit dividends
I) Debit revenue
J) Credit revenue
K) Debit expense
L) Credit expense

Question 19

Mrs. Beard's Bagels has 6 employees who are paid $12 per hour. At December 31, each of Mrs. Beard's employees had worked 18 hours which had not been paid or recorded. Prior to adjustments, the company's trial balance showed $85,700 in the wages expense account.
If Mrs. Beard makes the appropriate adjusting entry, how much will be reported on the December 31 income statement as wage expense?

Accepted Answer

A)  $85,700 
B)  $84,404 
C)  $ 1,296 
D)  $86,996

Question 20

Williams Company paid $24,000 for a two-year insurance policy on October 1 and recorded the $24,000 as a debit to Prepaid Insurance and a credit to Cash.
What adjusting entry should Williams make on December 31, the end of the accounting period (no previous adjustment has been made)?

Accepted Answer

A)  Prepaid Insurance 3,000
Insurance Expense 3,000 
B)  Insurance Expense 12,000
Prepaid Insurance 12,000 
C)  Prepaid Insurance 21,000
Insurance Expense 21,000 
D)  Insurance Expense 3,000
Prepaid Insurance 3,000 
E)  None of the above

Exam 13: Appendix A: The Language of Accountants: Debits and Credits

If the beginning Cash account balance was $18,400, the ending balance was $10,200, and total cash received during the period was $44,000, what amount of cash was paid out during the period?

Which of the following adjustments is an example of a deferral?

A trial balance that balances is useful because it indicates with certainty that:

The purchase of a delivery truck for $9,500 (on credit) was posted as debit to Delivery Trucks for $9,500, and a debit to Notes Payable for $9,500. What effect would this error have on the trial balance?

Which of the following is a temporary account category?

Transactions are first recorded in the general ledger and then posted to a journal.

A compound entry does not necessarily have to maintain total debits equal to total credits.

Which of the following is a correct statement?

When invoices are sent to customers billing them for services that have been performed, the correct transaction analysis is:

The Supplies account balance at the end of the period is $22,000. Supplies totaling $18,800 have been purchased during the period and debited to Supplies. A physical count shows $5,000 worth of supplies on hand at the end of the period. The proper adjusting entry is:

Which of the following journal entries will record the payment of a $850 accounts payable originally incurred for Office Supplies?

Terry Company purchased supplies for $7,000 on credit on January 1. On January 15, they made a cash payment of $2,000 to the supplier, and signed a one -year note for the remaining amount to settle the account. Terry Company's journal entry on January 15 will include:

The post-closing trial balance includes only balance sheet accounts.

West Company signed a one-year lease on April 1 and paid the $11,400 total year's rent in advance. West recorded the transaction as a debit to Prepaid Rent and a credit to Cash. What adjusting entry should West make on December 31 (no previous adjustment has been made) ?

Recording the payment of dividends to shareholders involves:

Recording a stock issuance in exchange for cash involves:

Match each of the numbered transactions of a corporation with Effect of Transaction indicating the debits and credits to be made (give the debit first) -A shareholder purchased stock

Williams Company paid $24,000 for a two-year insurance policy on October 1 and recorded the $24,000 as a debit to Prepaid Insurance and a credit to Cash. What adjusting entry should Williams make on December 31, the end of the accounting period (no previous adjustment has been made) ?