Question 1

Regarding the double-entry system,which of the following statements is incorrect?

Accepted Answer

A) A transaction would be incomplete if only one side were recorded. 
B) Because of technology,the use of the double-entry system of accounting is optional. 
C) The double-entry system is a system of accounting in which every transaction affects at least two accounts. 
D) If office supplies are purchased on account,the account Office Supplies increases and the account Accounts Payable increases.

Question 2

Which one of the following account groups normally has a credit balance?

Accepted Answer

A) assets and liabilities 
B) equity and assets 
C) liabilities and revenues 
D) assets and expenses

Question 3

Durable Plastics Company had the following total assets,liabilities,and equity as of December 31.  What is the company's debt ratio as of December 31? (Round your percentage answer to two decimal places. )

Accepted Answer

A) 31.67% 
B) 68.33% 
C) 100.00% 
D) 46.34%

Question 4

Both the chart of accounts and the ledger ________.

Accepted Answer

A) provide the balance of each account at a specific point in time 
B) list the account names and numbers of the business 
C) fulfill the task of showing all of the increases and decreases in each account 
D) All of the statements are correct.

Question 5

When using a four-column account,the posting reference column allows the user of the financial data to trace the amounts in the journal back to the ledger.

Accepted Answer

A) True 
 B)False

Question 6

A debit always means a decrease,and a credit always means an increase.

Accepted Answer

A) True 
 B)False

Question 7

Watson Foods Company,a sole proprietorship,reported the following transactions for September 2019. 
a.The business received $23,000 cash from the owner in exchange for capital.
b.The business purchased office equipment for $11,500 for which $4,000 cash was paid and the balance was put on a note payable.
c.Paid insurance expense of $1,200 cash.
d.Paid the September utility bill for $800 cash.
e.Paid $1,800 cash for September rent.
f.The business had sales of $11,000 in September.Of these sales,60% were cash sales,and the balance was credit sales.
g.The business paid $8,000 cash for office furniture.
What are the total liabilities at the end of September 2019?

Accepted Answer

A) $11,000 
B) $1,200 
C) $7,500 
D) $11,500

Question 8

For each transaction,identify which account is debited and which account is credited.Use proper account titles.

Accepted Answer

The answer of For each transaction,identify which account is debited...

Question 9

A chart of accounts is a list of all of a company's accounts with their account numbers.

Accepted Answer

A) True 
 B)False

Question 10

The trial balance is one of the basic financial statements that is issued to external users of the business.

Accepted Answer

A) True 
 B)False

Question 11

A business pays $800 cash for office supplies.Which of the following accounts is credited?

Accepted Answer

A) Cash 
B) Accounts Payable 
C) Office Supplies 
D) Office Supplies Expense

Question 12

Which of the following is a liability account?

Accepted Answer

A) Prepaid Advertising 
B) Cash 
C) Building 
D) Unearned Rent

Question 13

The T-account is a summary device that is shaped like a capital T with debits posted on the right side of the vertical line and credits posted on the left side of the vertical line.

Accepted Answer

A) True 
 B)False

Question 14

A business repays the amount borrowed on a note with cash.Which of the following accounts is credited?

Accepted Answer

A) Accounts Payable 
B) Cash 
C) Notes Payable 
D) Notes Receivable

Question 15

Donaldson's Delivery Company began operations on January 1,2019.The following Trial Balance was prepared on December 31,2019.   What is the net income for the year ended December 31,2019?

Accepted Answer

A) $17,400 
B) $23,800 
C) $26,300 
D) $74,400

Question 16

A business makes a cash payment to a supplier on account for office supplies that were purchased earlier.Which of the following accounts is credited?

Accepted Answer

A) Cash 
B) Accounts Payable 
C) Office Supplies 
D) Office Supplies Expense

Question 17

A business collects cash from a customer for services that were performed one month earlier.Which of the following accounts is debited?

Accepted Answer

A) Cash 
B) Accounts Receivable 
C) Service Revenue 
D) Accounts Payable

Question 18

The first step in the journalizing and posting process is to ________.

Accepted Answer

A) post the journal entry to the ledger 
B) identify the accounts involved and the account type 
C) decide whether each account increases or decreases 
D) record the transaction in the journal

Question 19

The Salaries Payable account is a(n)________.

Accepted Answer

A) liability account with a normal debit balance 
B) asset account with a normal debit balance 
C) liability account with a normal credit balance 
D) asset account with a normal credit balance

Question 20

A note receivable represents an oral promise that a customer will pay a fixed amount of money and interest by a certain date in the future.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

Regarding the double-entry system,which of the following statements is incorrect?

Which one of the following account groups normally has a credit balance?

Durable Plastics Company had the following total assets,liabilities,and equity as of December 31. What is the company's debt ratio as of December 31? (Round your percentage answer to two decimal places. )

Both the chart of accounts and the ledger ________.

When using a four-column account,the posting reference column allows the user of the financial data to trace the amounts in the journal back to the ledger.

A debit always means a decrease,and a credit always means an increase.

For each transaction,identify which account is debited and which account is credited.Use proper account titles.

A chart of accounts is a list of all of a company's accounts with their account numbers.

The trial balance is one of the basic financial statements that is issued to external users of the business.

A business pays $800 cash for office supplies.Which of the following accounts is credited?

Which of the following is a liability account?

The T-account is a summary device that is shaped like a capital T with debits posted on the right side of the vertical line and credits posted on the left side of the vertical line.

A business repays the amount borrowed on a note with cash.Which of the following accounts is credited?

Donaldson's Delivery Company began operations on January 1,2019.The following Trial Balance was prepared on December 31,2019. What is the net income for the year ended December 31,2019?

A business makes a cash payment to a supplier on account for office supplies that were purchased earlier.Which of the following accounts is credited?

A business collects cash from a customer for services that were performed one month earlier.Which of the following accounts is debited?

The first step in the journalizing and posting process is to ________.

The Salaries Payable account is a(n) ________.

A note receivable represents an oral promise that a customer will pay a fixed amount of money and interest by a certain date in the future.