Question 1

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 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 $4,700.
B)   The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700.
C)   The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400.
D)   The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400.
E)   The total of the Debit column of the trial balance will equal the total of the Credit column.F) A) and E)
G) C) and D)

Question 2

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of BBB Company sends a $2,500 invoice to...

Question 3

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) .
-Cash

Accepted Answer

A)  L
B)  SE
C)  R
D)  E
E)  A  F) B) and E)
G) C) and D)

Question 4

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) .
-Common Stock

Accepted Answer

A)  L
B)  SE
C)  R
D)  E
E)  A  F) B) and D)
G) B) and C)

Question 5

Identify the statement below that is correct.

Accepted Answer

A)   The left side of a T-account is the credit side.
B)   Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts.
C)   The left side of a T-account is the debit side.
D)   Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts.
E)   In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction.F) None of the above
G) All of the above

Question 6

At year-end,a trial balance showed total credits exceeding total debits by $4,950.This difference could have been caused by:

Accepted Answer

A)   An error in the general journal where a $4,950 increase in Accounts Receivable was recorded as an increase in Cash.
B)   A net income of $4,950.
C)   The balance of $49,500 in Accounts Payable being entered in the trial balance as $4,950.
D)   The balance of $5,500 in the Office Equipment account being entered on the trial balance as a debit of $550.
E)   An error in the general journal where a $4,950 increase in Accounts Payable was recorded as a decrease in Accounts Payable.F) A) and E)
G) None of the above

Question 7

"Unearned" accounts are liabilities that must be fulfilled.

Accepted Answer

A) True 
 B)False

Question 8

Dividends always decrease equity.

Accepted Answer

A) True 
 B)False

Question 9

Identify the following accounts as appearing on either the Income Statement (IS)  or Balance Sheet (BS) .
-Rent Expense

Accepted Answer

A)  BS
B)  ISC) A) and B)
D) undefined

Question 10

Match the following terms with the appropriate definition.
-Debit

Accepted Answer

A)  A record containing all accounts of a company and their balances.
B)  A written promise to pay a definite sum of money on a specified future date.
C)  The difference between total debits and total credits for an account including the beginning balance.
D)  An increase in an asset, dividend, and expense account, and a decrease in a liability, common stock, and revenue account; recorded on the left side of a T-account.
E)  A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances.F) An account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.G) The ratio of total liabilities to total assets; used to reflect the risk associated with the company's debts.H) A list of all accounts used by a company and the identification number assigned to each account.I) A decrease in an asset, dividend, and expense account, and an increase in a liability, common stock, and revenue account; recorded on the right side of a T-account.J) A chronological record of each transaction in one place that shows debits and credits for each transaction.K) A) and D)
L) E) and F)

Question 11

The second step in the analyzing and recording process is to record the transactions and events in the book of original entry,called the ________.

Accepted Answer

The answer of The second step in the analyzing and...

Question 12

Identify the account below that is classified as a liability in a company's chart of accounts:

Accepted Answer

A)   Cash
B)   Unearned Revenue
C)   Salaries Expense
D)   Accounts Receivable
E)   SuppliesF) B) and E)
G) A) and E)

Question 13

Source documents identify and describe transactions and events entering the accounting process.

Accepted Answer

A) True 
 B)False

Question 14

A business's source documents:

Accepted Answer

A)   Include the ledger.
B)   Provide objective evidence that a transaction has taken place.
C)   Must be in electronic form.
D)   Are prepared internally to ensure accuracy.
E)   Include the chart of accounts.F) A) and B)
G) A) and C)

Question 15

Willow Rentals purchased office supplies on credit.The general journal entry made by Willow Rentals will include a:

Accepted Answer

A)   Debit to Accounts Payable.
B)   Debit to Accounts Receivable.
C)   Credit to Cash.
D)   Credit to Accounts Payable.
E)   Credit to Common Stock.F) B) and C)
G) A) and B)

Question 16

The ________ is found by determining the difference between total debits and total credits for an account,including any beginning balance.

Accepted Answer

The answer of The ________ is found by determining the...

Question 17

A debit is used to record which of the following:

Accepted Answer

A)   A decrease in an asset account.
B)   A decrease in an expense account.
C)   An increase in a revenue account.
D)   An increase in the common stock account.
E)   An increase in the dividends account.F) A) and C)
G) A) and D)

Question 18

Identify the account below that is classified as an asset in a company's chart of accounts:

Accepted Answer

A)   Accounts Receivable
B)   Accounts Payable
C)   Common Stock
D)   Unearned Revenue
E)   Service RevenueF) A) and C)
G) A) and E)

Question 19

A transaction that decreases a liability and increases an asset must also affect one or more other accounts.

Accepted Answer

A) True 
 B)False

Question 20

You increase the Service Revenue account on the ________side of its account.

Accepted Answer

The answer of You increase the Service Revenue account on...

Exam 2: Analyzing for Business Transactions

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct AnswerverifiedShow Answer

Identify the account below that is classified as an asset in a company's chart of accounts:

Correct AnswerverifiedShow Answer

The second step in the analyzing and recording process is to record the transactions and events in the book of original entry,called the ________.

Correct AnswerverifiedShow Answer

"Unearned" accounts are liabilities that must be fulfilled.

Correct AnswerverifiedShow Answer

At year-end,a trial balance showed total credits exceeding total debits by $4,950.This difference could have been caused by:

Correct AnswerverifiedShow Answer

A debit is used to record which of the following:

Correct AnswerverifiedShow Answer

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) . -Common Stock

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Identify the account below that is classified as a liability in a company's chart of accounts:

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You increase the Service Revenue account on the ________side of its account.

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Willow Rentals purchased office supplies on credit.The general journal entry made by Willow Rentals will include a:

Correct AnswerverifiedShow Answer

A transaction that decreases a liability and increases an asset must also affect one or more other accounts.

Correct AnswerverifiedShow Answer

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 debit.What effect would this error have on the trial balance?

Correct AnswerverifiedShow Answer

A business's source documents:

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition. -Debit

Correct AnswerverifiedShow Answer

The ________ is found by determining the difference between total debits and total credits for an account,including any beginning balance.

Correct AnswerverifiedShow Answer

Identify each of the following accounts as a revenue (R) , expense (E) , asset (A) , liability (L) , or equity (SE) . -Cash

Correct AnswerverifiedShow Answer

Identify the statement below that is correct.

Correct AnswerverifiedShow Answer

Source documents identify and describe transactions and events entering the accounting process.

Correct AnswerverifiedShow Answer

Identify the following accounts as appearing on either the Income Statement (IS) or Balance Sheet (BS) . -Rent Expense

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Dividends always decrease equity.

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