Question 1

Briefly describe each of the following source documents:

Accepted Answer

The answer of Briefly describe each of the following source...

Question 2

Which of the following is a liability account?

Accepted Answer

A)  Accounts Payable
B)  Prepaid Expense
C)  Salaries Expense
D)  Service RevenueE) None of the above
F) B) and D)

Question 3

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance.

Accepted Answer

A) True 
 B)False

Question 4

A shortened form of the ledger is called a ________.

Accepted Answer

A)  working account
B)  summary account
C)  chart of accounts
D)  T-accountE) B) and C)
F) All of the above

Question 5

Consider the following accounts and identify each as an asset (A),liability (L),or equity (E).

Accepted Answer

The answer of Consider the following accounts and identify each...

Question 6

When using a four-column account,the posting reference column allows the user of the financial data to trace the amounts in the journal back to the ledger.

Accepted Answer

A) True 
 B)False

Question 7

All asset accounts and equity accounts increase with a debit.

Accepted Answer

A) True 
 B)False

Question 8

The T-account is a summary device that is shaped like a capital T with debits posted on the right side of the vertical line and credits posted on the left side of the vertical line.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following sequences states the order in which accounts are listed on a trial balance?

Accepted Answer

A)  Equity → Assets → Liabilities
B)  Liabilities → Assets → Equity
C)  Assets → Equity → Liabilities
D)  Assets → Liabilities → EquityE) B) and D)
F) B) and C) D

Question 10

The following transactions have been journalized and posted to the proper accounts.March is the first month of business operations.

What is the ending balance in the Service Revenue account?

Accepted Answer

A)  $16,000
B)  $10,000
C)  $14,000
D)  $6,000E) A) and D)
F) A) and C)

Question 11

Which of the following is a liability account?

Accepted Answer

A)  Service Revenue
B)  Building
C)  Prepaid Rent
D)  Unearned RevenueE) B) and D)
F) A) and B)

Question 12

When a business records the earning of service revenue,the Service Revenue account is credited.

Accepted Answer

A) True 
 B)False

Question 13

A business borrows cash by signing a note payable.Which of the following accounts is debited?

Accepted Answer

A)  Notes Payable
B)  Accounts Payable
C)  Notes Receivable
D)  CashE) B) and D)
F) B) and C)

Question 14

A business purchases equipment in exchange for a note payable.This transaction results in ________.

Accepted Answer

A)  no journal entry because no cash has been paid
B)  a debit to Notes Payable and a credit to Equipment
C)  an increase in liabilities
D)  a debit to Equipment and a credit to Accounts PayableE) None of the above
F) C) and D)

Question 15

A business renders services to a client and issues a sales invoice.The amount will be collected from the customer at a later time.Which of the following is true at the time the invoice is issued?

Accepted Answer

A)  Equity will decrease.
B)  Total liabilities will increase.
C)  Total assets will decrease.
D)  Net income will increase.E) All of the above
F) B) and C) D

Question 16

A business makes a payment of $1,400 on a note payable.Which of the following journal entries would be recorded?

Accepted Answer

A)  Cash is credited and Notes Payable is debited for $1,400.
B)  Notes Payable is credited and Cash is debited for $1,400.
C)  Cash is credited and Financing Expense is debited for $1,400.
D)  Cash is debited and Financing Revenue is credited for $1,400.E) All of the above
F) A) and C)

Question 17

A trial balance is the list of only a company's asset and liability accounts,along with their account numbers,at a point in time.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a liability account?

Accepted Answer

A)  Prepaid Advertising
B)  Cash
C)  Building
D)  Unearned RentE) A) and C)
F) C) and D)

Question 19

Which of the following statements is true of the Common Stock account?

Accepted Answer

A)  It is an equity account that has a normal credit balance.
B)  It is a liability account that has a normal credit balance.
C)  It is a liability account that has a normal debit balance.
D)  It is an equity account that has a normal debit balance.E) None of the above
F) A) and B) A

Question 20

A business pays cash for dividends.Which of the following accounts is credited?

Accepted Answer

A)  Common Stock
B)  Dividends
C)  Cash
D)  Retained EarningsE) None of the above
F) A) and D)

Exam 2: Recording Business Transactions

Briefly describe each of the following source documents:

Correct AnswerverifiedShow Answer

Which of the following is a liability account?

Correct AnswerverifiedShow Answer

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance.

Correct AnswerverifiedShow Answer

A shortened form of the ledger is called a ________.

Correct AnswerverifiedShow Answer

Consider the following accounts and identify each as an asset (A),liability (L),or equity (E).

Correct AnswerverifiedShow Answer

When using a four-column account,the posting reference column allows the user of the financial data to trace the amounts in the journal back to the ledger.

Correct AnswerverifiedShow Answer

All asset accounts and equity accounts increase with a debit.

Correct AnswerverifiedShow Answer

The T-account is a summary device that is shaped like a capital T with debits posted on the right side of the vertical line and credits posted on the left side of the vertical line.

Correct AnswerverifiedShow Answer

Which of the following sequences states the order in which accounts are listed on a trial balance?

Correct AnswerverifiedD

The following transactions have been journalized and posted to the proper accounts.March is the first month of business operations. What is the ending balance in the Service Revenue account?

Correct AnswerverifiedShow Answer

Which of the following is a liability account?

Correct AnswerverifiedShow Answer

When a business records the earning of service revenue,the Service Revenue account is credited.

Correct AnswerverifiedShow Answer

A business borrows cash by signing a note payable.Which of the following accounts is debited?

Correct AnswerverifiedShow Answer

A business purchases equipment in exchange for a note payable.This transaction results in ________.

Correct AnswerverifiedShow Answer

A business renders services to a client and issues a sales invoice.The amount will be collected from the customer at a later time.Which of the following is true at the time the invoice is issued?

Correct AnswerverifiedD

A business makes a payment of $1,400 on a note payable.Which of the following journal entries would be recorded?

Correct AnswerverifiedShow Answer

A trial balance is the list of only a company's asset and liability accounts,along with their account numbers,at a point in time.

Correct AnswerverifiedShow Answer

Which of the following is a liability account?

Correct AnswerverifiedShow Answer

Which of the following statements is true of the Common Stock account?

Correct AnswerverifiedA

A business pays cash for dividends.Which of the following accounts is credited?

Correct AnswerverifiedShow Answer

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D

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D

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A

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