Question 1

The Owner's Withdrawals account has a normal debit balance.

Accepted Answer

A) True 
 B)False

Question 2

Generally accepted accounting principles state that all business transactions should be valued at fair value both when they occur and at all subsequent reporting dates.

Accepted Answer

A) True 
 B)False

Question 3

When a company receives a product previously ordered,a recordable transaction has occurred.

Accepted Answer

A) True 
 B)False

Question 4

In a journal entry,the Post.Ref.column is left blank until the entry has been posted.

Accepted Answer

A) True 
 B)False

Question 5

A trial balance proves that the accounts are in balance.Does a balanced trial balance also prove that all the transactions are correctly analyzed and recorded? Why or why not?

Accepted Answer

The answer of A trial balance proves that the accounts...

Question 6

In accounting,to recognize means to record a transaction or event.

Accepted Answer

A) True 
 B)False

Question 7

The general ledger is the basic storage unit for accounting data and is used to accumulate
amounts from similar transactions.

Accepted Answer

A) True 
 B)False

Question 8

A purchase should usually not be recognized (recorded)before the title is transferred because,until that point,the vendor has not fulfilled its contractual obligation and the buyer has no liability.

Accepted Answer

A) True 
 B)False

Question 9

Mesquite,Inc.is ordering a new machine to be used in its manufacturing facility.Which of the following events would trigger the recognition of the machine and related liability on Mesquite's books?

Accepted Answer

A) The company generates a purchase order. 
B) A technician installs the machine on the floor of the manufacturing facility. 
C) The company receives the machine. 
D) The company pays the bill from the supplier.

Question 10

In order to manage a company's liquidity,managers and other users of financial information must understand the difference between transactions that generate immediate cash and those that do not.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is the first step in the accounting cycle?

Accepted Answer

A) Prepare financial statements. 
B) Analyze business transactions from source documents. 
C) Prepare and adjusted trial balance. 
D) Post the journal entries to the ledger.

Question 12

The cost principle relates most closely to the

Accepted Answer

A) recognition point. 
B) recognition issue. 
C) valuation issue. 
D) classification issue.

Question 13

Provide explanations for the following related journal entries:
a.
b.
c.
d.
e.

Accepted Answer

The answer of Provide explanations for the following related journal...

Question 14

A trial balance may be prepared at any point in time.

Accepted Answer

A) True 
 B)False

Question 15

Copper Company began operations in April and then engaged in the following transactions during April  If the balance in cash after these transactions is $165,000,how much cash was paid on account?

Accepted Answer

A) $43,000 
B) $57,000 
C) $1,000 
D) $21,000

Question 16

Using the following transactions,calculate (A)the ending balance of Cash, (B)the ending balance of Accounts Receivable, (C)total liabilities,and (D)Owner's Equity at the end of the period.For parts a,b,and d,indicate whether each balance is debit or credit.
a.Opened business by investing $50,000 in cash.
b.Billed customers for services rendered,$10,000.
c.Paid for six months' subscription in advance,$2,500.
d.Received advertising bill,to be paid next week,$500.
e.Withdrawals of $4,000 were made by the owner.
f.Received $7,500 from customers billed in b.
g.Paid half of advertising bill.
h.Received $1,000 in advance of performing a service.

Accepted Answer

The answer of Using the following transactions,calculate (A)the ending balance...

Question 17

The controller for Tires and More,Inc.has recorded the following transactions during the month: the purchase of equipment for $8,500 cash;payment of $6,300 for 3 months rent;and,collection of $2,400 from a customer for services performed.At the beginning of the month the owner established the business by making an investment of $15,000 cash.What is the balance in the Cash account at the end of the month,and is the balance a debit or a credit?

Accepted Answer

A) $2,600 debit. 
B) $2,600 credit. 
C) $6,800 debit. 
D) $15,200 debit.

Question 18

The first step in the accounting cycle is to post the journal entries to the ledger and prepare a trial balance.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is the final step in the accounting cycle?

Accepted Answer

A) Prepare financial statements. 
B) Close the accounts. 
C) Prepare and adjusted trial balance. 
D) Post the journal entries to the ledger.

Question 20

When a business erroneously records expenses as assets,it has violated the measurement issue of

Accepted Answer

A) communication. 
B) classification. 
C) valuation. 
D) realization.

Exam 2: Analyzing and Recording Business Transactions

The Owner's Withdrawals account has a normal debit balance.

Generally accepted accounting principles state that all business transactions should be valued at fair value both when they occur and at all subsequent reporting dates.

When a company receives a product previously ordered,a recordable transaction has occurred.

In a journal entry,the Post.Ref.column is left blank until the entry has been posted.

A trial balance proves that the accounts are in balance.Does a balanced trial balance also prove that all the transactions are correctly analyzed and recorded? Why or why not?

In accounting,to recognize means to record a transaction or event.

The general ledger is the basic storage unit for accounting data and is used to accumulate amounts from similar transactions.

A purchase should usually not be recognized (recorded)before the title is transferred because,until that point,the vendor has not fulfilled its contractual obligation and the buyer has no liability.

Mesquite,Inc.is ordering a new machine to be used in its manufacturing facility.Which of the following events would trigger the recognition of the machine and related liability on Mesquite's books?

In order to manage a company's liquidity,managers and other users of financial information must understand the difference between transactions that generate immediate cash and those that do not.

Which of the following is the first step in the accounting cycle?

The cost principle relates most closely to the

Provide explanations for the following related journal entries: a. b. c. d. e.

A trial balance may be prepared at any point in time.

Copper Company began operations in April and then engaged in the following transactions during April If the balance in cash after these transactions is $165,000,how much cash was paid on account?

The first step in the accounting cycle is to post the journal entries to the ledger and prepare a trial balance.

Which of the following is the final step in the accounting cycle?

When a business erroneously records expenses as assets,it has violated the measurement issue of