Question 1

Purchasing a three-year insurance policy for cash would include a:

Accepted Answer

A)  debit to Cash and a credit to Accounts Receivable 
B)  debit to Insurance Expense and a credit to Dividends 
C)  debit to Prepaid Insurance and a credit to Accounts Payable 
D)  debit to Prepaid Insurance and a credit to Cash

Question 2

Receiving a cheque from a customer on account would include a:

Accepted Answer

A)  debit to Accounts Receivable and a credit to Cash 
B)  debit to Cash and a credit to Accounts Payable 
C)  debit to Accounts Payable and a credit to Cash 
D)  debit to Cash and a credit to Accounts Receivable

Question 3

When a business sells inventory in exchange for cash,which of the following accounts is credited?

Accepted Answer

A)  Revenue 
B)  Cash 
C)  Owners' Equity 
D)  Accounts Payable

Question 4

Moving data to the ledger is known as journalizing.

Accepted Answer

A) True 
 B)False

Question 5

Use T-accounts to analyze the following transactions for the Red Panda Corporation:
a.Owner invested $550,000 cash and equipment with a value of $5,500 into the business received common shares in return.
b.Purchased office supplies on account,$300.
c.Performed services for a customer on account,$3,500.
d.Purchased a building by paying $100,000 down and signing a note for the remainder of $800,000.
e.Performed services for a customer and immediately collected $4,500 cash.
f.Paid employees salaries of $2,200.
Determine the ending cash balance.Note this is their first month of operations.

Accepted Answer

The answer of Use T-accounts to analyze the following transactions...

Question 6

A trial balance is a useful device because it provides a check on accuracy by showing whether:

Accepted Answer

A)  total assets equal total liabilities 
B)  total debits equal total credits 
C)  total revenues plus gains equal total expenses plus losses 
D)  total of all the income statement accounts equals the total of all the balance sheet accounts

Question 7

State the decrease side (debit or credit)for each of the following accounts.
a.Prepaid Expenses
b.Contributed Capital
c.Buildings
d.Unearned Revenue
e.Dividends
f.Notes Receivable
g.Interest Payable
h.Sales Revenue
i.Cost of Sales

Accepted Answer

The answer of State the decrease side (debit or credit)for...

Question 8

A business purchases a truck by signing a note payable to the seller.Such a transaction would include a:

Accepted Answer

A)  credit to Truck 
B)  debit to Note Payable 
C)  credit to Note Payable 
D)  debit to an expense account

Question 9

When the owner of a business invests cash into the business,which of the following accounts is debited?

Accepted Answer

A)  Dividends 
B)  Cash 
C)  Common Shares 
D)  Accounts Receivable

Question 10

Given the following list of errors,determine the effect on assets,liabilities,and shareholders' equity by completing the chart below.Use (+)to indicate overstated,(-)to indicate understated,and (0)to indicate no effect.Transaction (a)is completed as an example.
a.The entry to record the purchase of $800 of equipment on account was never posted.
b.The entry to record the purchase of $100 of supplies for cash was posted as a debit to Supplies and a credit to Accounts Payable.
c.A $1,000 debit to Cash was posted as $100.
d.A $400 debit to the Accounts Payable account was never posted.
e.A debit to Accounts Receivable of $500 was posted as a credit to Accounts Receivable.
  b.
c.
d.
e.

Accepted Answer

The answer of Given the following list of errors,determine the...

Question 11

The purchase of land for cash would:

Accepted Answer

A)  increase total assets 
B)  decrease shareholders' equity 
C)  increase the total debits on the trial balance 
D)  not affect the total of debits or credits on the trial balance

Question 12

Which type of account is credited when a company pays its employees?

Accepted Answer

A)  an expense account 
B)  an asset account 
C)  a liability account 
D)  the owners' equity account

Question 13

The accounting process of copying of amounts from the journal to the appropriate ledger accounts is referred to as:

Accepted Answer

A)  journalizing 
B)  footing 
C)  balancing 
D)  posting

Question 14

The accounting transaction to record the payment of salaries to employees would include a:

Accepted Answer

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

Question 15

Expenses increase shareholders equity.That is why they are credits.

Accepted Answer

A) True 
 B)False

Question 16

Paying a dividend to the company's shareholders would include a:

Accepted Answer

A)  debit to Cash and a credit to Dividends 
B)  debit to Dividends and a credit to Cash 
C)  debit to Retained Earnings and a credit to Dividends 
D)  debit to Accounts Payable and a credit to Retained Earnings

Question 17

Define and provide an example of each of the following.

Accepted Answer

The answer of Define and provide an example of each...

Question 18

Debits are always recorded (journalized)after credits.

Accepted Answer

A) True 
 B)False

Question 19

A credit increases the balance of which types of accounts?

Accepted Answer

A)  revenue and assets 
B)  liabilities and assets 
C)  liabilities and expenses 
D)  shareholders' equity and liabilities

Question 20

What criteria are used to determine if a transaction has occurred?

Accepted Answer

The answer of What criteria are used to determine if...

Exam 2: Recording Business Transactions

Purchasing a three-year insurance policy for cash would include a:

Receiving a cheque from a customer on account would include a:

When a business sells inventory in exchange for cash,which of the following accounts is credited?

Moving data to the ledger is known as journalizing.

A trial balance is a useful device because it provides a check on accuracy by showing whether:

State the decrease side (debit or credit)for each of the following accounts. a.Prepaid Expenses b.Contributed Capital c.Buildings d.Unearned Revenue e.Dividends f.Notes Receivable g.Interest Payable h.Sales Revenue i.Cost of Sales

A business purchases a truck by signing a note payable to the seller.Such a transaction would include a:

When the owner of a business invests cash into the business,which of the following accounts is debited?

The purchase of land for cash would:

Which type of account is credited when a company pays its employees?

The accounting process of copying of amounts from the journal to the appropriate ledger accounts is referred to as:

The accounting transaction to record the payment of salaries to employees would include a:

Expenses increase shareholders equity.That is why they are credits.

Paying a dividend to the company's shareholders would include a:

Define and provide an example of each of the following.

Debits are always recorded (journalized)after credits.

A credit increases the balance of which types of accounts?

What criteria are used to determine if a transaction has occurred?