Question 1

Total debits must always equal total credits in order for a trial balance to balance.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following accounts does not have a normal credit balance?

Accepted Answer

A)  Retained Earnings 
B)  Common Shares 
C)  Accounts Payable 
D)  Inventory

Question 3

Receiving a payment from a customer on account would:

Accepted Answer

A)  have no effect on shareholders' equity 
B)  increase net income 
C)  increase shareholders' equity 
D)  increase liabilities

Question 4

The purchase of a building with a down payment of cash and the signing of a note payable for the remainder would include a debit to both the asset Building,and a credit to the asset Cash and the liability Note Payable.

Accepted Answer

A) True 
 B)False

Question 5

Every transaction affects at least two accounts.

Accepted Answer

A) True 
 B)False

Question 6

The entry to record an owner investment of $500 into the business would be:

Accepted Answer

The answer of The entry to record an owner investment...

Question 7

The normal balance of the Supplies account is a ________ because it is a(n)________ account.

Accepted Answer

A)  credit; liability 
B)  debit; asset 
C)  credit; expense 
D)  debit; shareholders' equity

Question 8

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

Accepted Answer

A)  debit; shareholders' equity 
B)  debit; liabilities 
C)  debit; assets 
D)  credit; revenues

Question 9

Performing a service on account would include a:

Accepted Answer

A)  debit to Cash 
B)  debit to Revenue 
C)  credit to Accounts Receivable 
D)  debit to Accounts Receivable

Question 10

The trial balance is used to prepare the income statement.

Accepted Answer

A) True 
 B)False

Question 11

A trial balance is simply a list of all accounts and their balances at a point in time.

Accepted Answer

A) True 
 B)False

Question 12

Describe what is listed on a trial balance.

Accepted Answer

The answer of Describe what is listed on a trial...

Question 13

The payment for rent of the office building for one month would include a:

Accepted Answer

A)  debit to Cash 
B)  credit to Accounts Payable 
C)  debit to Rent Expense 
D)  credit to Revenue

Question 14

The normal balance of Accounts Receivable is a ________ because it is a(n)________ account.

Accepted Answer

A)  credit; liability 
B)  debit; expense 
C)  credit; shareholders' equity 
D)  debit; asset

Question 15

Posting,a part of the accounting process,refers to:

Accepted Answer

A)  copying amounts from the accounts in the general ledger to the journal 
B)  copying amounts from the financial statements to the general ledger 
C)  copying amounts from the journal to the appropriate accounts in the general ledger 
D)  copying amounts from the general ledger to the financial statements

Question 16

Use T-accounts to show the resulting balance in each account.

Accepted Answer

The answer of Use T-accounts to show the resulting balance...

Question 17

The retained earnings account represents the money invested by shareholders into the business since its inception.

Accepted Answer

A) True 
 B)False

Question 18

This summarizes all the account balances for the financial statements and shows whether total debits equals total credits:

Accepted Answer

A)  ledger 
B)  trial balance 
C)  journal 
D)  accounting equation

Question 19

All shareholders equity accounts typically have a credit balance except for dividends which are a debit.

Accepted Answer

A) True 
 B)False

Question 20

A dividend account is known as a contra equity account.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

Total debits must always equal total credits in order for a trial balance to balance.

Which of the following accounts does not have a normal credit balance?

Receiving a payment from a customer on account would:

The purchase of a building with a down payment of cash and the signing of a note payable for the remainder would include a debit to both the asset Building,and a credit to the asset Cash and the liability Note Payable.

Every transaction affects at least two accounts.

The entry to record an owner investment of $500 into the business would be:

The normal balance of the Supplies account is a because it is a(n) account.

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

Performing a service on account would include a:

The trial balance is used to prepare the income statement.

A trial balance is simply a list of all accounts and their balances at a point in time.

Describe what is listed on a trial balance.

The payment for rent of the office building for one month would include a:

The normal balance of Accounts Receivable is a because it is a(n) account.

Posting,a part of the accounting process,refers to:

Use T-accounts to show the resulting balance in each account.

The retained earnings account represents the money invested by shareholders into the business since its inception.

This summarizes all the account balances for the financial statements and shows whether total debits equals total credits:

All shareholders equity accounts typically have a credit balance except for dividends which are a debit.

A dividend account is known as a contra equity account.

Exam 2: Recording Business Transactions

Total debits must always equal total credits in order for a trial balance to balance.

Which of the following accounts does not have a normal credit balance?

Receiving a payment from a customer on account would:

The purchase of a building with a down payment of cash and the signing of a note payable for the remainder would include a debit to both the asset Building,and a credit to the asset Cash and the liability Note Payable.

Every transaction affects at least two accounts.

The entry to record an owner investment of $500 into the business would be:

The normal balance of the Supplies account is a ________ because it is a(n) ________ account.

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

Performing a service on account would include a:

The trial balance is used to prepare the income statement.

A trial balance is simply a list of all accounts and their balances at a point in time.

Describe what is listed on a trial balance.

The payment for rent of the office building for one month would include a:

The normal balance of Accounts Receivable is a ________ because it is a(n) ________ account.

Posting,a part of the accounting process,refers to:

Use T-accounts to show the resulting balance in each account.

The retained earnings account represents the money invested by shareholders into the business since its inception.

This summarizes all the account balances for the financial statements and shows whether total debits equals total credits:

All shareholders equity accounts typically have a credit balance except for dividends which are a debit.

A dividend account is known as a contra equity account.

The normal balance of the Supplies account is a because it is a(n) account.

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

The normal balance of Accounts Receivable is a because it is a(n) account.