Question 1

The posting reference column of the general journal provides a cross-reference between the:

Accepted Answer

A) ledger and accounts. 
B) journal and ledger. 
C) ledger and financial statements. 
D) journal and financial statements.

Question 2

A $375 purchase of supplies on account was recorded by debiting Supplies for $375 and crediting Cash for $375.The entry needed to correct this error is:

Accepted Answer

A) Debit Accounts Payable for $375 and credit Cash for $375. 
B) Debit Accounts Receivable for $375 and credit Cash for $375. 
C) Debit Cash for $375 and credit Accounts Payable for $375. 
D) Debit Cash for $375 and credit Accounts Receivable for $375.

Question 3

The difference between the total debits and total credits of an account is called a:

Accepted Answer

A) trial balance. 
B) sub-total. 
C) ruling. 
D) balance.

Question 4

Accounts that start with the numbers 6-9 would probably be:

Accepted Answer

A) other revenues and expenses. 
B) other assets and liabilities. 
C) other Stockholders' Equity. 
D) other assets and revenues.

Question 5

The second step in analyzing a transaction is to determine:

Accepted Answer

A) if the account balance will increase or decrease. 
B) the accounts that are involved. 
C) the type of accounts that are involved. 
D) which accounts are to be debited and credited.

Question 6

The trial balance:

Accepted Answer

A) lists only the accounts,with their balances,which are used to prepare the Balance Sheet. 
B) lists only the accounts,with their balances,which are used to prepare the Income Statement. 
C) lists account names but no balances. 
D) lists all accounts,with their balances,on a given date.

Question 7

The account "Notes Payable" began with a zero balance and then had the following changes: increase of $500,increase of $200,decrease of $550,and an increase of $250.The final balance is a:

Accepted Answer

A) credit balance of $550. 
B) debit balance of $950. 
C) credit balance of $400. 
D) debit balance of $400.

Question 8

Revenues,Accounts Receivable,and Common Stock have normal balances of:

Accepted Answer

A) credit,debit,and credit,respectively. 
B) debit,debit,and credit,respectively. 
C) credit,credit,and credit,respectively. 
D) debit,debit,and debit,respectively.

Question 9

A company has a ten million dollar credit balance in the payable accounts.Given this information,which of the following is a TRUE statement?

Accepted Answer

A) It is NOT normal for payable accounts to have a credit balance. 
B) Not enough information provided,since normal account balances are different for each company. 
C) It is ALWAYS normal for payable accounts to have a credit balance. 
D) Payable accounts shouldn't be this high,so this is not a normal balance.

Question 10

A T-account has a $388 credit balance.This account is most likely:

Accepted Answer

A) an expense. 
B) a dividend account. 
C) an asset. 
D) a stock account.

Question 11

The account "Accounts Receivable" began with a zero balance and then had the following changes: increase of $625,decrease of $175,increase of $250 and increase of $125.The final balance is a:

Accepted Answer

A) credit balance of $825. 
B) debit balance of $825. 
C) credit balance of $1,175. 
D) debit balance of $1,175.

Question 12

The ________ indicates where the information originated and to where the information was transferred.

Accepted Answer

A) general journal 
B) Balance Sheet 
C) general ledger 
D) posting reference

Question 13

The purpose of the trial balance is to verify that all account balances are correct.

Accepted Answer

A) True 
 B)False

Question 14

A T-account has a $382 debit balance.This account is most likely:

Accepted Answer

A) Income Taxes Payable. 
B) Common Stock. 
C) Cash. 
D) Magazine Sales.

Question 15

Able and Sons,Inc.purchases a building for $35,000 cash.The journal entry would include a:

Accepted Answer

A) debit to Building and a credit to Cash. 
B) debit to Common Stock and a credit to Building. 
C) debit to Building and a credit to Accounts Payable. 
D) debit to Building and a credit to Common Stock.

Question 16

A T-account is a way to visualize the increases and decreases to the value of an account.

Accepted Answer

A) True 
 B)False

Question 17

A T-account has a $299 credit balance.This account is most likely NOT:

Accepted Answer

A) Accounts Receivable. 
B) Bicycle Repair Revenue. 
C) Wages Payable. 
D) Common Stock.

Question 18

Transactions are recorded in order of the dollar amount of the transaction.

Accepted Answer

A) True 
 B)False

Question 19

Salaries of $675 were paid in cash.The journal entry would include a:

Accepted Answer

A) debit to Salaries Expense and a credit to Cash. 
B) credit to Salaries Expense and a debit to Cash. 
C) debit to Accounts Payable and a credit to Cash. 
D) debit to Accounts Payable and a credit to Salary Expense.

Question 20

Instead of T-accounts,businesses more than likely use a:

Accepted Answer

A) chart of accounts. 
B) Balance Sheet. 
C) general ledger. 
D) general journal.

Exam 2: Analyzing and Recording Business Transactions

The posting reference column of the general journal provides a cross-reference between the:

A $375 purchase of supplies on account was recorded by debiting Supplies for $375 and crediting Cash for $375.The entry needed to correct this error is:

The difference between the total debits and total credits of an account is called a:

Accounts that start with the numbers 6-9 would probably be:

The second step in analyzing a transaction is to determine:

The trial balance:

The account "Notes Payable" began with a zero balance and then had the following changes: increase of $500,increase of $200,decrease of $550,and an increase of $250.The final balance is a:

Revenues,Accounts Receivable,and Common Stock have normal balances of:

A company has a ten million dollar credit balance in the payable accounts.Given this information,which of the following is a TRUE statement?

A T-account has a $388 credit balance.This account is most likely:

The account "Accounts Receivable" began with a zero balance and then had the following changes: increase of $625,decrease of $175,increase of $250 and increase of $125.The final balance is a:

The ________ indicates where the information originated and to where the information was transferred.

The purpose of the trial balance is to verify that all account balances are correct.

A T-account has a $382 debit balance.This account is most likely:

Able and Sons,Inc.purchases a building for $35,000 cash.The journal entry would include a:

A T-account is a way to visualize the increases and decreases to the value of an account.

A T-account has a $299 credit balance.This account is most likely NOT:

Transactions are recorded in order of the dollar amount of the transaction.

Salaries of $675 were paid in cash.The journal entry would include a:

Instead of T-accounts,businesses more than likely use a: