Question 1

The trial balance verifies the equality of debits and credits at a point in time.

Accepted Answer

A) True 
 B)False

Question 2

The Accounts Payable account of Golden Company has the following postings:  Calculate the ending balance of the account.

Accepted Answer

A)   $12,000 credit
B)   $16,000 debit
C)   $16,000 credit
D)   $6,000 debitE) A) and B)
F) A) and C)

Question 3

A business purchases equipment for $8,000 cash. Which of the following accounts is debited?

Accepted Answer

A)   Cash
B)   Accounts Payable
C)   Owner, Capital
D)   EquipmentE) None of the above
F) B) and D)

Question 4

Stewart Candle Company received a cash contribution of $40,000 from the owner of the business. Which of the following accounts will be debited?

Accepted Answer

A)   Accounts Receivable
B)   Cash
C)   Stewart, Capital
D)   Accounts PayableE) B) and D)
F) A) and D)

Question 5

Which of the following statements is true of revenues?

Accepted Answer

A)   Revenues decrease equity, so a revenue account's normal balance is a credit balance.
B)   Revenues decrease equity, so a revenue account's normal balance is a debit balance.
C)   Revenues increase equity, so a revenue account's normal balance is a debit balance.
D)   Revenues increase equity, so a revenue account's normal balance is a credit balance.E) None of the above
F) A) and C)

Question 6

The trial balance is an internal document used only by employees of the company.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following journal entries would be recorded if a business purchased office supplies on account in a previous accounting period and now makes a cash payment of $750 to the supplier to settle the account?

Accepted Answer

A)  
B)  
C)  
D)  E) A) and D)
F) All of the above

Question 8

The owner withdrew cash from the business. Which of the following accounts is debited?

Accepted Answer

A)   Cash
B)   Owner, Withdrawals
C)   Accounts Payable
D)   Common StockE) A) and B)
F) B) and C)

Question 9

Transactions are first record in a ________.

Accepted Answer

A)   chart of accounts
B)   trial balance
C)   journal
D)   ledgerE) None of the above
F) A) and C)

Question 10

Which one of the following account groups normally has a credit balance?

Accepted Answer

A)   assets and liabilities
B)   equity and assets
C)   liabilities and revenues
D)   assets and expensesE) B) and D)
F) B) and C)

Question 11

A payable involves a future receipt of cash.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an asset account?

Accepted Answer

A)   Wages Payable
B)   Notes Payable
C)   Unearned Revenue
D)   Accounts ReceivableE) B) and D)
F) C) and D)

Question 13

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) A) and D)
F) C) and D)

Question 14

The following are the current month's balances for Jackson Company.  Calculate the total amount of credits for the trial balance.

Accepted Answer

A)   $24,500
B)   $21,750
C)   $25,750
D)   $33,750E) A) and B)
F) None of the above

Question 15

A debit always means a decrease, and a credit always means an increase.

Accepted Answer

A) True 
 B)False

Question 16

The Owner's Capital account is a separate account in the ________ category of the accounting equation.

Accepted Answer

A)   equity
B)   asset
C)   liability
D)   revenueE) A) and D)
F) All of the above

Question 17

A business collects cash from a customer for services that were performed one month earlier. Which of the following accounts is debited?

Accepted Answer

A)   Cash
B)   Accounts Receivable
C)   Service Revenue
D)   Accounts PayableE) C) and D)
F) A) and B)

Question 18

Amounts earned from delivering goods or services to customers are called ________.

Accepted Answer

A)   notes receivable
B)   unearned revenues
C)   equity
D)   revenuesE) A) and B)
F) A) and C)

Question 19

A payment of an expense in advance is called a prepaid expense.

Accepted Answer

A) True 
 B)False

Question 20

The normal balance of an account is the increase side of the account.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

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

Correct AnswerverifiedShow Answer

The Accounts Payable account of Golden Company has the following postings: Calculate the ending balance of the account.

Correct AnswerverifiedShow Answer

The Owner's Capital account is a separate account in the ________ category of the accounting equation.

Correct AnswerverifiedShow Answer

The owner withdrew cash from the business. Which of the following accounts is debited?

Correct AnswerverifiedShow Answer

The trial balance is an internal document used only by employees of the company.

Correct AnswerverifiedShow Answer

Which one of the following account groups normally has a credit balance?

Correct AnswerverifiedShow Answer

Stewart Candle Company received a cash contribution of $40,000 from the owner of the business. Which of the following accounts will be debited?

Correct AnswerverifiedShow Answer

The following are the current month's balances for Jackson Company. Calculate the total amount of credits for the trial balance.

Correct AnswerverifiedShow Answer

Amounts earned from delivering goods or services to customers are called ________.

Correct AnswerverifiedShow Answer

A business collects cash from a customer for services that were performed one month earlier. Which of the following accounts is debited?

Correct AnswerverifiedShow Answer

Which of the following statements is true of revenues?

Correct AnswerverifiedShow Answer

Which of the following journal entries would be recorded if a business purchased office supplies on account in a previous accounting period and now makes a cash payment of $750 to the supplier to settle the account?

Correct AnswerverifiedShow Answer

A payment of an expense in advance is called a prepaid expense.

Correct AnswerverifiedShow Answer

The normal balance of an account is the increase side of the account.

Correct AnswerverifiedShow Answer

Transactions are first record in a ________.

Correct AnswerverifiedShow Answer

Which of the following is an asset account?

Correct AnswerverifiedShow Answer

A debit always means a decrease, and a credit always means an increase.

Correct AnswerverifiedShow Answer

The trial balance verifies the equality of debits and credits at a point in time.

Correct AnswerverifiedShow Answer

A payable involves a future receipt of cash.

Correct AnswerverifiedShow Answer

A business purchases equipment for $8,000 cash. Which of the following accounts is debited?

Correct AnswerverifiedShow Answer

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