Question 1

Define the term account and describe the relationship between accounts and the ledger.

Accepted Answer

An account is a record of the increases ...

Question 2

Which of the following accounts normally has a debit balance?

Accepted Answer

A)   Dividends
B)   Retained Earnings
C)   Share capital
D)   RevenueE) A) and B)
F) All of the above A

Question 3

An accounts receivable represents the promise of the business to pay a debt.

Accepted Answer

A) True 
 B)False

Question 4

Posting is the process of copying the amounts from the journal to the appropriate accounts in the ledger.

Accepted Answer

A) True 
 B)False

Question 5

Purchasing supplies and paying cash for them would:

Accepted Answer

A)   increase total assets
B)   decrease total assets
C)   have no effect on total assets
D)   increase total liabilities and shareholders' equityE) B) and D)
F) None of the above

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The normal balance for any account is always the side of the account (debit or credit)where increases are recorded.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements regarding accounts is incorrect?

Accepted Answer

A)   An asset is increased by a debit and decreased by a credit.
B)   Revenue is increased by a debit and an expense is increased by a credit.
C)   A liability is decreased by a debit and increased by a credit.
D)   Revenue is increased by a credit and an expense is increased by a debit.E) A) and C)
F) A) and B)

Question 9

An expense account is known as a contra equity account.

Accepted Answer

A) True 
 B)False

Question 10

An owner makes an investment of cash into the business.Such a transaction would include a:

Accepted Answer

A)   debit to Common shares
B)   credit to Cash
C)   debit to Cash
D)   debit to Accounts ReceivableE) C) and D)
F) A) and B)

Question 11

What type of account is Prepaid Rent?

Accepted Answer

A)   a liability
B)   an expense
C)   shareholders' equity
D)   an assetE) A) and C)
F) B) and C)

Question 12

The ledger provides a good indication of how much cash is available for the business to use.

Accepted Answer

A) True 
 B)False

Question 13

Credits to revenue accounts ultimately result in:

Accepted Answer

A)   a decrease in owners' equity
B)   an increase in owners' equity
C)   a decrease in assets
D)   an increase in liabilitiesE) A) and B)
F) B) and C)

Question 14

If a trial balance is in balance,the accountant is assured that no mistakes were made either in recording or posting.

Accepted Answer

A) True 
 B)False

Question 15

A balance sheet is a required financial statement that reports the financial position of the company as of a given day in time.

Accepted Answer

A) True 
 B)False

Question 16

Prepare a trial balance for Salty Inc.dated June 30,2017,based on the following transactions that occurred during the month of June.
a.Owner invested $25,000 cash into the business and received common shares in return.
b.Rented an office and paid one month's rent,$900.
c.Purchased $400 of supplies on account.
d.Performed services on account,$5,500.
e.Paid $2,000 cash for office furniture.
f.Owner received a dividend of $700.
g.Collected $1,200 on account.

Accepted Answer

The answer of Prepare a trial balance for Salty Inc.dated...

Question 17

On a trial balance the total of all debits must equal the total of all credits.

Accepted Answer

A) True 
 B)False

Question 18

List the types of accounts that appear on the income statement.List the types of accounts that appear on the balance sheet.

Accepted Answer

The income statement contains accounts classified as revenues and expenses.The balance sheet contains accounts classified as assets,liabilities,and owners' equity.

Question 19

Identify the normal balance for asset and liability accounts.What is the reasoning behind the "normal balances" for these accounts?

Accepted Answer

Using a T-account format,the normal balance of any account is the side that increases the balance in the account.For asset accounts the normal balance would be the debit side of the T-account.Asset accounts are often referred to as "debit-balance accounts." Crediting a liability account increases its balance,so it has a normal balance of a credit.Liability accounts are called "credit-balance accounts."
The reason why assets are debit-balance accounts and liabilities are credit-balance accounts is caused by the accounting equation."Assets equal liabilities plus shareholders' equity" means that asset and liability accounts must have opposite normal balances for the equation to balance.

Question 20

The Dividends account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

Define the term account and describe the relationship between accounts and the ledger.

Correct Answer
verified
An account is a record of the increases ...
View Answer

Which of the following accounts normally has a debit balance?

Correct Answer
verified
A

An accounts receivable represents the promise of the business to pay a debt.

Correct Answer
verified

Posting is the process of copying the amounts from the journal to the appropriate accounts in the ledger.

Correct Answer
verified

Purchasing supplies and paying cash for them would:

Correct Answer
verified

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

Correct Answer
verified

The normal balance for any account is always the side of the account (debit or credit)where increases are recorded.

Correct Answer
verified

Which of the following statements regarding accounts is incorrect?

Correct Answer
verified

An expense account is known as a contra equity account.

Correct Answer
verified

An owner makes an investment of cash into the business.Such a transaction would include a:

Correct Answer
verified

What type of account is Prepaid Rent?

Correct Answer
verified

The ledger provides a good indication of how much cash is available for the business to use.

Correct Answer
verified

Credits to revenue accounts ultimately result in:

Correct Answer
verified

If a trial balance is in balance,the accountant is assured that no mistakes were made either in recording or posting.

Correct Answer
verified

A balance sheet is a required financial statement that reports the financial position of the company as of a given day in time.

Correct Answer
verified

Correct Answer
verified

On a trial balance the total of all debits must equal the total of all credits.

Correct Answer
verified

List the types of accounts that appear on the income statement.List the types of accounts that appear on the balance sheet.

Correct Answer
verified
The income statement contains accounts classified as revenues and expenses.The balance sheet contains accounts classified as assets,liabilities,and owners' equity.

Identify the normal balance for asset and liability accounts.What is the reasoning behind the "normal balances" for these accounts?

The Dividends account normally has a debit balance.

Correct Answer
verified

Exam 2: Recording Business Transactions

Define the term account and describe the relationship between accounts and the ledger.

Correct AnswerverifiedAn account is a record of the increases ...View AnswerShow Answer

Which of the following accounts normally has a debit balance?

Correct AnswerverifiedA

An accounts receivable represents the promise of the business to pay a debt.

Correct AnswerverifiedShow Answer

Posting is the process of copying the amounts from the journal to the appropriate accounts in the ledger.

Correct AnswerverifiedShow Answer

Purchasing supplies and paying cash for them would:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The normal balance for any account is always the side of the account (debit or credit)where increases are recorded.

Correct AnswerverifiedShow Answer

Which of the following statements regarding accounts is incorrect?

Correct AnswerverifiedShow Answer

An expense account is known as a contra equity account.

Correct AnswerverifiedShow Answer

An owner makes an investment of cash into the business.Such a transaction would include a:

Correct AnswerverifiedShow Answer

What type of account is Prepaid Rent?

Correct AnswerverifiedShow Answer

The ledger provides a good indication of how much cash is available for the business to use.

Correct AnswerverifiedShow Answer

Credits to revenue accounts ultimately result in:

Correct AnswerverifiedShow Answer

If a trial balance is in balance,the accountant is assured that no mistakes were made either in recording or posting.

Correct AnswerverifiedShow Answer

A balance sheet is a required financial statement that reports the financial position of the company as of a given day in time.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

On a trial balance the total of all debits must equal the total of all credits.

Correct AnswerverifiedShow Answer

List the types of accounts that appear on the income statement.List the types of accounts that appear on the balance sheet.

Correct AnswerverifiedThe income statement contains accounts classified as revenues and expenses.The balance sheet contains accounts classified as assets,liabilities,and owners' equity.

Identify the normal balance for asset and liability accounts.What is the reasoning behind the "normal balances" for these accounts?

The Dividends account normally has a debit balance.

Correct AnswerverifiedShow Answer

Correct Answer
verified
An account is a record of the increases ...
View Answer

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The income statement contains accounts classified as revenues and expenses.The balance sheet contains accounts classified as assets,liabilities,and owners' equity.

Correct Answer
verified