Question 1

Which of the following accounts is an example of a liability?

Accepted Answer

A)   Bills payable
B)   Service revenue
C)   Accounts receivable
D)   BuildingE) A) and D)
F) A) and C)

Question 2

A business buys $500 in supplies on credit.Which account is credited?

Accepted Answer

A)   Service revenue
B)   Cash
C)   Supplies
D)   Accounts payableE) None of the above
F) C) and D)

Question 3

Which of the following statements is FALSE?

Accepted Answer

A)   A trial balance shows total debits and total credits.
B)   A trial balance is created before the balance sheet is prepared.
C)   A trial balance presents data in debit and credit format, but a balance sheet does not.
D)   A trial balance shows total amounts for assets, liabilities and equity.E) B) and C)
F) A) and C)

Question 4

In a trial balance,total debits are always equal to total credits.

Accepted Answer

A) True 
 B)False

Question 5

The normal sequence of information flow in an accounting system is:

Accepted Answer

A)   source document, ledger, journal.
B)   journal, source document, ledger.
C)   source document, journal, ledger.
D)   ledger, journal, source document.E) All of the above
F) A) and C)

Question 6

The following are the current month's balances for Toys Galore:
  Accounts payable $10,000 Revenue 3000 Cash 3000 Expenses 1200 Furniture 11,000 Accounts receivable 15,000 Iones, capital 7250 Loan payable 6500\begin{array} { | l | l | } \hline 	ext { Accounts payable } & \$ 10,000 \\hline 	ext { Revenue } & 3000 \\hline 	ext { Cash } & 3000 \\hline 	ext { Expenses } & 1200 \\hline 	ext { Furniture } & 11,000 \\hline 	ext { Accounts receivable } & 15,000 \\hline 	ext { Iones, capital } & 7250 \\hline 	ext { Loan payable } & 6500 \\hline\end{array} Accounts payable  Revenue  Cash  Expenses  Furniture  Accounts receivable  Iones, capital  Loan payable ​$10,00030003000120011,00015,00072506500​​ 
Calculate the total amount of credits for the trial balance.

Accepted Answer

A)   $31,750
B)   $23,750
C)   $24,500
D)   $21,750 E) All of the above
F) B) and C)

Question 7

Which of the following is NOT an example of a source document?

Accepted Answer

A)   Bank deposit slip
B)   Purchase invoice
C)   Journal
D)   Sales invoiceE) A) and C)
F) All of the above

Question 8

The Accounts receivable account of Nuptials Ltd is shown below.
Accounts receivable
20,000
3000

5000

Calculate the ending balance of the account.

Accepted Answer

A)   $18,000, debit
B)   $5000, credit
C)   $28,000, debit
D)   $23,000, debitE) B) and C)
F) All of the above

Question 9

Which of the following accounts is an owners' equity account?

Accepted Answer

A)   Accrued liability
B)   Prepaid expense
C)   Accounts payable
D)   CapitalE) None of the above
F) All of the above

Question 10

The drawings account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 11

The first step of journalising an entry is to:

Accepted Answer

A)   identify the transaction from source documents.
B)   post the accounts to the ledger.
C)   determine whether each account is increased or decreased.
D)   record the transaction in the journal, including a brief explanation.E) All of the above
F) A) and C)

Question 12

A journal entry for a $70 payment for rent expense was posted as a debit to Salaries expense and a credit to Cash.This error will cause which of the following conditions on the trial balance?

Accepted Answer

A)   The sum of the credits will equal the sum of the debits.
B)   The sum of the debits will exceed the sum of the credits by $140.
C)   The sum of the credits will exceed the sum of the debits by $140.
D)   The sum of the debits will exceed the sum of the credits by $70.E) All of the above
F) B) and D)

Question 13

Which of the following accounts is an example of an owners' equity account?

Accepted Answer

A)   Cash
B)   Equipment
C)   Drawings
D)   Accounts payableE) A) and C)
F) B) and D)

Question 14

In a typical chart of accounts,liabilities appear before assets.

Accepted Answer

A) True 
 B)False

Question 15

When a business collects cash,the Cash account is debited.

Accepted Answer

A) True 
 B)False

Question 16

The trial balance is one of the three basic financial statements.

Accepted Answer

A) True 
 B)False

Question 17

A listing of all account titles in numerical order is a(n) :

Accepted Answer

A)   ledger.
B)   journal.
C)   chart of accounts.
D)   income statement.E) A) and C)
F) A) and D)

Question 18

A company received $75 000 from a customer 'on account'.The journal entry would be to:

Accepted Answer

A)   debit Accounts receivable and credit Sales revenue.
B)   debit Sales revenue and credit Accounts receivable.
C)   debit Cash and credit Accounts receivable.
D)   debit Accounts receivable and credit Cash.E) B) and C)
F) A) and D)

Question 19

Debit refers to the right side of the T-account and credit refers to the left side.

Accepted Answer

A) True 
 B)False

Question 20

A business collects cash from a customer in payment of accounts receivable.Which account is debited?

Accepted Answer

A)   Cash
B)   Service revenue
C)   Accounts receivable
D)   SuppliesE) C) and D)
F) B) and D)

Exam 2: Recording Business Transactions

Which of the following accounts is an example of a liability?

Correct Answer
verified

Debit refers to the right side of the T-account and credit refers to the left side.

Correct Answer
verified

Which of the following accounts is an owners' equity account?

Correct Answer
verified

Which of the following is NOT an example of a source document?

Correct Answer
verified

The normal sequence of information flow in an accounting system is:

Correct Answer
verified

When a business collects cash,the Cash account is debited.

Correct Answer
verified

A business buys $500 in supplies on credit.Which account is credited?

Correct Answer
verified

The Accounts receivable account of Nuptials Ltd is shown below. Accounts receivable 20,000 3000 5000 Calculate the ending balance of the account.

Correct Answer
verified

Which of the following accounts is an example of an owners' equity account?

Correct Answer
verified

In a typical chart of accounts,liabilities appear before assets.

Correct Answer
verified

The trial balance is one of the three basic financial statements.

Correct Answer
verified

In a trial balance,total debits are always equal to total credits.

Correct Answer
verified

Correct Answer
verified

A journal entry for a $70 payment for rent expense was posted as a debit to Salaries expense and a credit to Cash.This error will cause which of the following conditions on the trial balance?

Correct Answer
verified

A business collects cash from a customer in payment of accounts receivable.Which account is debited?

Correct Answer
verified

The first step of journalising an entry is to:

Correct Answer
verified

A company received $75 000 from a customer 'on account'.The journal entry would be to:

Correct Answer
verified

A listing of all account titles in numerical order is a(n) :

Correct Answer
verified

Which of the following statements is FALSE?

Correct Answer
verified

The drawings account is increased by a debit.

Correct Answer
verified

Exam 2: Recording Business Transactions

Which of the following accounts is an example of a liability?

Correct AnswerverifiedShow Answer

Debit refers to the right side of the T-account and credit refers to the left side.

Correct AnswerverifiedShow Answer

Which of the following accounts is an owners' equity account?

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of a source document?

Correct AnswerverifiedShow Answer

The normal sequence of information flow in an accounting system is:

Correct AnswerverifiedShow Answer

When a business collects cash,the Cash account is debited.

Correct AnswerverifiedShow Answer

A business buys $500 in supplies on credit.Which account is credited?

Correct AnswerverifiedShow Answer

The Accounts receivable account of Nuptials Ltd is shown below. Accounts receivable 20,000 3000 5000 Calculate the ending balance of the account.

Correct AnswerverifiedShow Answer

Which of the following accounts is an example of an owners' equity account?

Correct AnswerverifiedShow Answer

In a typical chart of accounts,liabilities appear before assets.

Correct AnswerverifiedShow Answer

The trial balance is one of the three basic financial statements.

Correct AnswerverifiedShow Answer

In a trial balance,total debits are always equal to total credits.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A journal entry for a $70 payment for rent expense was posted as a debit to Salaries expense and a credit to Cash.This error will cause which of the following conditions on the trial balance?

Correct AnswerverifiedShow Answer

A business collects cash from a customer in payment of accounts receivable.Which account is debited?

Correct AnswerverifiedShow Answer

The first step of journalising an entry is to:

Correct AnswerverifiedShow Answer

A company received $75 000 from a customer 'on account'.The journal entry would be to:

Correct AnswerverifiedShow Answer

A listing of all account titles in numerical order is a(n) :

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

The drawings account is increased by a debit.

Correct AnswerverifiedShow Answer

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