Question 1

Which of the following is true regarding normal balances of accounts?

Accepted Answer

A)  All accounts have a normal debit balance. 
B)  The normal balance of all accounts will have either a positive or negative balance. 
C)  Accounts that have a normal debit balance will only have debit entries, never credit entries. 
D)  The normal balance is the side of the account that increases the account.

Question 2

McMann Company has a condensed income statement as shown::
  REQUIRED:
Prepare a horizontal analysis of McMann Company's income statements. Comment on the trends, both favorable and unfavorable.

Accepted Answer

The answer of McMann Company has a condensed income statement...

Question 3

For the following, mark a "D" if the following account normally has a debit balance and mark a "C" if the following account normally has a credit balance.
. Notes Payable
_____2. Mortgage Payable
_____3. Drawing
_____4. Accounts Receivable
_____5. Capital
_____6. Rent Revenue
_____7. Unearned Income
_____8. Utility Expense
_____9. Automobiles

Accepted Answer

The answer of For the following, mark a "D" if...

Question 4

The posting process will include the transfer of the following information from the journal to the account.

Accepted Answer

A)  date, amount (debit or credit) 
B)  date, amount (debit or credit), journal page number 
C)  amount (debit or credit), account number 
D)  date, amount (debit or credit) account number

Question 5

The accounts in the ledger of Monroe Entertainment Co. are listed in alphabetical order. All accounts have normal balances.  The total of all the assets is:

Accepted Answer

A)  $10,000 
B)  $8,000 
C)  $9,700 
D)  $9,800

Question 6

Which of the following accounts is an owner's equity account?

Accepted Answer

A)  Cash 
B)  Accounts Payable 
C)  Prepaid Insurance 
D)  Ross Morris, Capital

Question 7

The process of recording a transaction in the journal is called

Accepted Answer

A)  recording 
B)  journalizing 
C)  posting 
D)  summarizing

Question 8

The post reference columns are used to trace transactions from the journal to the accounts. What will be posted on the post reference column of (a) the journal and (b) on the account?

Accepted Answer

A)  (a) the amount of the debit or credit (b) the journal page number 
B)  (a) the journal page number (b) the date of the transaction 
C)  (a) the journal page number, (b) the account number 
D)  (a) the account number, (b) the journal page number

Question 9

Prepare a journal entry for the purchase of a truck on April 4 for $85,700, paying $15,000 cash and the remainder on account.

Accepted Answer

The answer of Prepare a journal entry for the purchase...

Question 10

On January 1, 2010, Cary Parsons established a catering service. Listed below are accounts she would like to open in the general ledger. List the accounts in the order in which they should appear in the ledger and propose a two digit account numbering scheme that is consistent with the rules of a proper chart of accounts.

Accepted Answer

The answer of On January 1, 2010, Cary Parsons established...

Question 11

Which of the following entries records the investment of cash by Ron York, owner of a proprietorship?

Accepted Answer

A)  debit Ron York, Capital; credit Accounts Receivable 
B)  debit Cash; credit Ron York, Capital 
C)  debit Ron York, Drawing; credit Cash 
D)  debit Cash; credit Ron York, Drawing

Question 12

A debit signifies a decrease in

Accepted Answer

A)  assets 
B)  expenses 
C)  drawing 
D)  revenues

Question 13

Which of the following situations increase owner's equity?

Accepted Answer

A)  Supplies are purchased on account. 
B)  Services are provided on account. 
C)  Cash is received from customers. 
D)  Utility bill will be paid next month.

Question 14

The balance of the account can be determined by adding all of the debits, adding all of the credits, and adding the amounts together.

Accepted Answer

A) True 
 B)False

Question 15

On January 8th, Damien Lawson transfers ownership of several pieces of office equipment to his new business, JumpStart. When new, these items were worth $72,500. The fair market value of the equipment is $60,000. Journalize this transfer.

Accepted Answer

The answer of On January 8th, Damien Lawson transfers ownership...

Question 16

Below is the unadjusted trial balance for Dawson Designs.
REQUIRED:
(1) Identify the errors in the following trial balance. All accounts have normal balances.
(2) Prepare a corrected trial balance.

Accepted Answer

The answer of Below is the unadjusted trial balance for...

Question 17

Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means

Accepted Answer

A)  all of the information from the journal was correctly transferred to the ledger 
B)  all accounts have their correct balances in the ledger 
C)  only the journal is accurate; the ledger may be incorrect 
D)  only that the debit dollar amounts equal the credit dollar amounts

Question 18

The process of transferring the journal entries to the accounts is known as

Accepted Answer

A)  posting 
B)  updating 
C)  journalizing 
D)  summarizing

Question 19

The right hand side of a T account is known as a debit and the left hand side is known as a credit.

Accepted Answer