Question 1

A building is an example of an asset that does not provide any benefit to its owner.

Accepted Answer

A) True 
 B)False

Question 2

Prepaid expenses are:

Accepted Answer

A)  Payments made for economic benefits that never expire. 
B)  Classified as liabilities on the balance sheet. 
C)  Generally all combined into one account called "Miscellaneous Expenses". 
D)  Assets created by payments for economic benefits that are not used up until later. 
E)  Always debited to an expense account.

Question 3

A summary of the ledger that lists the accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n):

Accepted Answer

A)  Account balance. 
B)  Trial balance. 
C)  Ledger. 
D)  Chart of accounts. 
E)  General Journal.

Question 4

Goods sold on credit to customers are called accounts payable.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is correct?

Accepted Answer

A)  When an insurance premium is paid in advance,the payment is normally recorded in a liability account called Prepaid Insurance. 
B)  Goods and services are commonly sold to customers on the basis of oral or implied promises of future payment,called promissory notes. 
C)  Increases and decreases in cash are always recorded in the equity account. 
D)  An account called Land is commonly used to record increases and decreases in the land and buildings owned by a business. 
E)  None of these statements are correct.

Question 6

Zen Hatha opened a yoga studio and during a short period as a dealer completed these transactions:  What was the total of the debit balances shown in the trial balance prepared after these transactions were posted?

Accepted Answer

A)  $152,300. 
B)  $167,700. 
C)  $173,950. 
D)  $181,900. 
E)  $243,620.

Question 7

Unearned revenue is classified as a(n)_______________ that is satisfied by delivering products or services in the future.

Accepted Answer

The answer of Unearned revenue is classified as a(n)_______________ that...

Question 8

Discuss how the following transactions affect accounts and financial statements.
(1)Jillian Robb invested $30,000 cash in Profile Design Co.
(2)Profile Design Co.purchased supplies for $5,000 on its credit card.
(3)Profile Design Co.purchased equipment for $19,000 and signed a note payable.

Accepted Answer

The answer of Discuss how the following transactions affect accounts...

Question 9

Eli opened a new business by investing the following assets: cash,$6,000; land,$30,000; building,$100,000.Also,the business will assume responsibility for a note payable of $22,000.Eli signed the note as part of his payment for the land and building.Which journal entry should be used on the books of the new business to record the investment by Eli?

Accepted Answer

A) 
 
B) 
 
C) 
 
D) 
 
E)

Question 10

D.Brown Plumbing Co completed the following transactions during February of the current year:  Prepare general journal entries to record the transactions.Include a brief description for each entry.

Accepted Answer

The answer of D.Brown Plumbing Co completed the following transactions...

Question 11

A $15 credit to Sales was posted as a $150 credit.By what amount is Sales out of balance?

Accepted Answer

A)  $150 understated. 
B)  $135 overstated. 
C)  $150 overstated. 
D)  $15 understated. 
E)  $135 understated.

Question 12

The general journal provides a place for recording:

Accepted Answer

A)  The transaction date. 
B)  The names of the accounts involved. 
C)  The amount of each debit and credit. 
D)  An explanation of the transaction. 
E)  All of these answers are correct.

Question 13

The accounting equation is expressed as assets = liabilities - equity.

Accepted Answer

A) True 
 B)False

Question 14

An account is a detailed record of increases and decreases in a specific asset,liability or equity item.

Accepted Answer

A) True 
 B)False

Question 15

The purchase on credit of a delivery truck for $9,600 was posted to Delivery Trucks as a $9,600 debit and to Rent Expense as a $9,600 debit.What effect would this error have on the trial balance?

Accepted Answer

A)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,600. 
B)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,600. 
C)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $19,200. 
D)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $19,200. 
E)  The total of the Debit column of the trial balance will equal the total of the Credit column.

Question 16

A debit is used to record:

Accepted Answer

A)  An increase in a liability account. 
B)  A decrease in an asset account. 
C)  A decrease in the withdrawals account. 
D)  An increase in an asset account. 
E)  An increase in a revenue account.

Question 17

Prepaid Insurance is an expense account which is used for recording expenses that have been paid in advance.

Accepted Answer

A) True 
 B)False

Question 18

On February 3,2015,Fusilli Stores purchased a computer that cost $5,000.The firm made a down payment of $500 and signed a note payable for the balance.Show the general journal entry to record this transaction.

Accepted Answer

The answer of On February 3,2015,Fusilli Stores purchased a computer...

Question 19

A column in journals and accounts used to cross reference journal and ledger entries is called the:

Accepted Answer

A)  Account balance. 
B)  Debit. 
C)  Posting reference. 
D)  Credit. 
E)  Description.

Question 20

A transaction that decreases an asset account and increases a liability account must also affect another account.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing and Reporting Transactions

A building is an example of an asset that does not provide any benefit to its owner.

Prepaid expenses are:

A summary of the ledger that lists the accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n) :

Goods sold on credit to customers are called accounts payable.

Which of the following statements is correct?

Zen Hatha opened a yoga studio and during a short period as a dealer completed these transactions: What was the total of the debit balances shown in the trial balance prepared after these transactions were posted?

Unearned revenue is classified as a(n)_______________ that is satisfied by delivering products or services in the future.

Discuss how the following transactions affect accounts and financial statements. (1)Jillian Robb invested $30,000 cash in Profile Design Co. (2)Profile Design Co.purchased supplies for $5,000 on its credit card. (3)Profile Design Co.purchased equipment for $19,000 and signed a note payable.

D.Brown Plumbing Co completed the following transactions during February of the current year: Prepare general journal entries to record the transactions.Include a brief description for each entry.

A $15 credit to Sales was posted as a $150 credit.By what amount is Sales out of balance?

The general journal provides a place for recording:

The accounting equation is expressed as assets = liabilities - equity.

An account is a detailed record of increases and decreases in a specific asset,liability or equity item.

The purchase on credit of a delivery truck for $9,600 was posted to Delivery Trucks as a $9,600 debit and to Rent Expense as a $9,600 debit.What effect would this error have on the trial balance?

A debit is used to record:

Prepaid Insurance is an expense account which is used for recording expenses that have been paid in advance.

On February 3,2015,Fusilli Stores purchased a computer that cost $5,000.The firm made a down payment of $500 and signed a note payable for the balance.Show the general journal entry to record this transaction.

A column in journals and accounts used to cross reference journal and ledger entries is called the:

A transaction that decreases an asset account and increases a liability account must also affect another account.