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

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 3

When using a three-column account format, the column on the far right is used to show:

Accepted Answer

A)  the debit and credit amounts posted from journal entries 
B)  the names of the accounts being debited and credited 
C)  the transactions' date and journal reference 
D)  the account's balance

Question 4

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 5

The entry to record the purchase of office supplies for $100 cash would be:

Accepted Answer

A)   
B)   
C)   
D)

Question 6

The accounting transaction to record payment of the advertising bill would include a:

Accepted Answer

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

Question 7

The purchase of office equipment for cash would include a:

Accepted Answer

A)  debit to Cash 
B)  debit to Office Equipment 
C)  credit to Accounts Payable 
D)  credit to Office Equipment

Question 8

The entry to record the purchase of supplies on account would include a:

Accepted Answer

A)  credit to the Accounts Payable account 
B)  debit to the Retained Earnings account 
C)  credit to the Cash account 
D)  credit to the Supplies account

Question 9

A dividend account is known as a contra equity account.

Accepted Answer

A) True 
 B)False

Question 10

Prepare a trial balance for Zeng Inc. dated April 30, 2014, based on the following transactions that occurred during the month of June.
a. Owner invested $55,000 cash into the business and received common shares in return.
b. Rented an office and paid one month's rent, $700.
c. Purchased $600 of supplies on account.
d. Performed services on account, $7,500.
e. Paid $4,200 cash for office furniture.
f. Owner received a dividend of $500.
g. Collected $3,000 on account.

Accepted Answer

The answer of Prepare a trial balance for Zeng Inc....

Question 11

What is the first step in the journalizing process?

Accepted Answer

A)  Enter the transaction in the journal. 
B)  Identify the transaction from source documents and other information. 
C)  Determine what accounts will be affected and whether to debit or credit them. 
D)  Post the transaction to the ledger.

Question 12

From the following list of transactions, prepare a trial balance dated March 31, 2014, for Niko Inc., which began operations on March 1, 2014.
a. Sold 600 common shares for $12,000.
b. Located a building suitable for a dry cleaning business, paying the first month's rent of $2,000.
c. Purchased cleaning supplies for $500 cash.
d. Purchased cleaning equipment on account costing $6,000.
e. Services of $5,000 were rendered for cash during the month.
f. Paid $1,500 salaries to employees for the month.
g. Paid utilities bill of $500 for the month.

Accepted Answer

The answer of From the following list of transactions, prepare...

Question 13

Posting is the process of copying the amounts from the journal to the appropriate accounts in the ledger.

Accepted Answer

A) True 
 B)False

Question 14

A debit increases the balance of which types of accounts?

Accepted Answer

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

Question 15

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 16

The accounting transaction to record payment of the heating bill would include a:

Accepted Answer

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

Question 17

The entry to record an owner investment of $1500 into the business including a $500 piece of equipment would be:

Accepted Answer

A)  
B)  
C)  
D)

Question 18

The purchase of office supplies for cash would include a debit to the asset Office Supplies and a credit to the asset Cash.

Accepted Answer

A) True 
 B)False

Question 19

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 20

When a company performs a service and immediately collects the cash from the customer, which of the following would occur?

Accepted Answer

A)  Net income would increase. 
B)  Expenses would decrease. 
C)  Assets would decrease. 
D)  Shareholders' equity would decrease.

Exam 2: Recording Business Transactions

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

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

When using a three-column account format, the column on the far right is used to show:

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

The entry to record the purchase of office supplies for $100 cash would be:

The accounting transaction to record payment of the advertising bill would include a:

The purchase of office equipment for cash would include a:

The entry to record the purchase of supplies on account would include a:

A dividend account is known as a contra equity account.

What is the first step in the journalizing process?

Posting is the process of copying the amounts from the journal to the appropriate accounts in the ledger.

A debit increases the balance of which types of accounts?

The purchase of land for cash would:

The accounting transaction to record payment of the heating bill would include a:

The entry to record an owner investment of $1500 into the business including a $500 piece of equipment would be:

The purchase of office supplies for cash would include a debit to the asset Office Supplies and a credit to the asset Cash.

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

When a company performs a service and immediately collects the cash from the customer, which of the following would occur?