Question 1

A business makes a cash payment for advertising expense.Which account is debited?

Accepted Answer

A) Accounts receivable 
B) Cash 
C) Advertising expense 
D) Service revenue

Question 2

A business pays $500 cash for supplies.Which account is credited?

Accepted Answer

A) Service revenue 
B) Accounts payable 
C) Cash 
D) Supplies

Question 3

Which of the following is the order of steps to journalise an entry?

Accepted Answer

A) Identify each account affected,record the transaction,determine increase or decrease in each account. 
B) Record the transaction,identify each account affected,determine increase or decrease in each account. 
C) Determine increase or decrease in each account,identify each account affected,record the transaction. 
D) Identify each account affected,determine increase or decrease in each account,record the transaction.

Question 4

The following transactions have been journalised and posted to the proper accounts. 
1.Mark Call invested $7 000 cash in his new design services business.
2.The business paid the first month's rent with $700 cash.
3.The business purchased equipment by paying a $2 000 deposit and borrowing $4 500.
4.The business purchased supplies for $850 cash.
5.The business billed its clients a total of $4 000 for design services rendered.
6.The business collected $3 000 on credit from one of its clients.
What is the balance in Service revenue?

Accepted Answer

A) $3 000 
B) $3 150 
C) $1 000 
D) $4 000

Question 5

Journalising a transaction means:

Accepted Answer

A) recording the transaction,including a brief explanation. 
B) calculating the balance in an account. 
C) copying the information from the journal to the ledger. 
D) finding the account number in the chart of accounts.

Question 6

An asset account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 7

A book holding all of the accounts is called the:

Accepted Answer

A) balance sheet. 
B) ledger. 
C) journal. 
D) income statement.

Question 8

A trial balance summarises a ledger by listing all the accounts with their ending balances.

Accepted Answer

A) True 
 B)False

Question 9

Accountants first record transactions in the:

Accepted Answer

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

Question 10

Debit refers to the right side of the T-account and credit refers to the left side.

Accepted Answer

A) True 
 B)False

Question 11

A journal entry includes BOTH debit and credit amounts.

Accepted Answer

A) True 
 B)False

Question 12

An account is the detailed record of the changes in a particular asset,liability or owners' equity.

Accepted Answer

A) True 
 B)False

Question 13

An owner invests $20 000 in her new business by depositing the cash in the business bank account.Which account is debited?

Accepted Answer

A) Accounts payable 
B) Cash 
C) Accounts receivable 
D) Capital

Question 14

The following are the current month's balances for Toys Galore: $$\begin{array} { | l | l | } 
\hline \text { Accounts payable } & \$ 8000 \
\hline \text { Revenue } & 9000 \
\hline \text { Cash } & 7000 \
\hline \text { Expenses } & 1500 \
\hline \text { Furniture } & 11,000 \
\hline \text { Accounts receivable } & 13,000 \
\hline \text { Iones, capital } & 3250 \
\hline \text { Loan payable } & 4000 \
\hline
\end{array}$$ What is the total amount of debits for the trial balance?

Accepted Answer

A) $32,500 
B) $24,000 
C) $25,500 
D) $31,000

Question 15

A business purchases equipment for cash in the amount of $8 000.Which account is debited?

Accepted Answer

A) Cash 
B) Accounts payable 
C) Equipment 
D) Supplies expense

Question 16

An owner invests $20 000 in her new business by depositing the cash in the business bank account.Which account is credited?

Accepted Answer

A) Accounts receivable 
B) Accounts payable 
C) Cash 
D) Capital

Question 17

The trial balance is one of the three basic financial statements.

Accepted Answer

A) True 
 B)False

Question 18

For Capital,the category of account and its normal balance are:

Accepted Answer

A) Assets and a debit balance. 
B) Assets and a credit balance. 
C) Liabilities and a credit balance. 
D) Owners' equity and a credit balance.

Question 19

A business makes a cash payment to a supplier 'on credit' (for supplies that were purchased earlier).Which account is debited?

Accepted Answer

A) Service revenue 
B) Accounts payable 
C) Cash 
D) Supplies

Question 20

Which of the following accounts is an owners' equity account?

Accepted Answer

A) Accrued liability 
B) Prepaid expense 
C) Accounts payable 
D) Capital

Exam 2: Recording Business Transactions

A business makes a cash payment for advertising expense.Which account is debited?

A business pays $500 cash for supplies.Which account is credited?

Which of the following is the order of steps to journalise an entry?

Journalising a transaction means:

An asset account is increased by a debit.

A book holding all of the accounts is called the:

A trial balance summarises a ledger by listing all the accounts with their ending balances.

Accountants first record transactions in the:

Debit refers to the right side of the T-account and credit refers to the left side.

A journal entry includes BOTH debit and credit amounts.

An account is the detailed record of the changes in a particular asset,liability or owners' equity.

An owner invests $20 000 in her new business by depositing the cash in the business bank account.Which account is debited?

A business purchases equipment for cash in the amount of $8 000.Which account is debited?

An owner invests $20 000 in her new business by depositing the cash in the business bank account.Which account is credited?

The trial balance is one of the three basic financial statements.

For Capital,the category of account and its normal balance are:

A business makes a cash payment to a supplier 'on credit' (for supplies that were purchased earlier) .Which account is debited?

Which of the following accounts is an owners' equity account?