Question 1

Describe the difference between external events and internal events and give two examples of each.

Accepted Answer

External events involve an exchange betw...

Question 2

Following are transactions of Gotebo Tanners,Inc.,a new company,during the month of January 2012: 1.Issued 10,000 shares of common stock for $15,000 cash.
2) Purchased land for $12,000,signing a note payable for the full amount.
3) Purchased office equipment for $1,200 cash.
4) Received cash of $14,000 for services provided to customers during the month.
5) Purchased $300 of office supplies on account.
6) Paid employees $10,000 for their first month's salaries.
What was the balance of Gotebo's Cash account following these six transactions?

Accepted Answer

A)  $29,800.
B)  $19,300.
C)  $17,800.
D)  $22,400.E) A) and C)
F) None of the above

Question 3

Investments by stockholders have what effect on the accounting equation?

Accepted Answer

A)  Assets increase and liabilities increase.
B)  Expenses increase and liabilities increase.
C)  Assets increase and revenues increase.
D)  Assets increase and stockholders' equity increases.E) A) and C)
F) All of the above D

Question 4

If a company provides services on account,which of the following is true?

Accepted Answer

A)  Expenses increase.
B)  Liabilities increase.
C)  Stockholders' equity increases.
D)  Assets decrease.E) All of the above
F) B) and C)

Question 5

A company pays $12,000 to purchase a one-year insurance policy.Record the transaction.

Accepted Answer

The answer of A company pays $12,000 to purchase a...

Question 6

On July 7,2012,Saints Inc.received $10,000 in cash from a customer for services to be provided on October 10,2012.Which of the following describes how the transaction should be recorded on July 7,2012?

Accepted Answer

A)  Debit Cash $10,000,credit Service Revenue $10,000.
B)  Debit Accounts Receivable $10,000,credit Service Revenue $10,000.
C)  Debit Cash $10,000,credit Unearned Revenue $10,000.
D)  Debit Unearned Revenue $10,000,credit Cash $10,000.E) None of the above
F) A) and D)

Question 7

A company pays $800 dividends to stockholders.Indicate the amount of increases and decreases in the accounting equation.

Accepted Answer

The answer of A company pays $800 dividends to stockholders.Indicate...

Question 8

After recording each transaction,total assets must equal total liabilities plus stockholders' equity.

Accepted Answer

A) True 
 B)False  True

Question 9

Which of the following accounts would normally have a credit balance?

Accepted Answer

A)  Accounts Payable,Service Revenue,Common Stock.
B)  Salaries Payable,Unearned Revenue,Delivery Expense.
C)  Income Tax Payable,Service Revenue,Dividends.
D)  Cash,Repairs and Maintenance Expense,Dividends.E) A) and B)
F) B) and C)

Question 10

The following amounts are reported in the ledger of Mariah Company: 
  Assets $80,000 Liabilities 36,000 Retained Earnings 12,000\begin{array} { l r } 	ext { Assets } & \$ 80,000 \	ext { Liabilities } & 36,000 \	ext { Retained Earnings } & 12,000\end{array} Assets  Liabilities  Retained Earnings ​$80,00036,00012,000​ 
What is the balance in the Common Stock account?

Accepted Answer

A)  $44,000.
B)  $32,000.
C)  $48,000.
D)  $42,000. E) A) and B)
F) None of the above

Question 11

Rite Shoes was involved in the transactions described below.Record each transaction.If an entry is not required,state "No Entry."
(a)Purchased $8,200 of supplies on account.
(b)Paid weekly salaries,$920.
(c)Provide services to customers: Cash: $7,100; On account: $5,300.
(d)Paid for supplies purchased in (a)above.
(e)Placed an order for $6,200 of supplies.

Accepted Answer

The answer of Rite Shoes was involved in the transactions...

Question 12

Expenses normally carry a _______ balance and are shown in the _________.

Accepted Answer

A)  Debit; Statement of stockholders' equity
B)  Debit; Income statement
C)  Credit; Balance sheet
D)  Debit; Balance SheetE) A) and B)
F) C) and D)

Question 13

Receiving cash in advance from customers increases the Service Revenue account.

Accepted Answer

A) True 
 B)False

Question 14

Unearned Revenue is a liability account.

Accepted Answer

A) True 
 B)False

Question 15

Tomlin & Company provides music for special occasions.On January 14,the Smith family hired Tomlin for an upcoming family wedding for an agreed upon fee of $10,000.The wedding was scheduled for May 23.As part of the agreement,the Smiths paid Tomlin half of the fee at the end of April with the remaining amount due by the end of June.How would Tomlin record the receipt of the final payment in June?

Accepted Answer

A)  Credit to Accounts Receivable.
B)  Credit to Service Revenue.
C)  Credit to Cash.
D)  Debit to Unearned Revenue.E) B) and D)
F) A) and B)

Question 16

Clement Company paid an account payable related to a previous utility bill of $1,000.This transaction should be recorded as follows on the payment date:

Accepted Answer

A)  Debit Accounts Payable $1,000,credit Cash $1,000.
B)  Debit Cash $1,000,credit Accounts Payable $1,000.
C)  Debit Utilities Expense $1,000,credit Cash $1,000.
D)  Debit Cash $1,000,credit Utilities Expense $1,000.E) A) and B)
F) C) and D) A

Question 17

Posting transactions to the T-accounts involve:

Accepted Answer

A)  Analyzing source documents to determine the effects of transactions on the company's accounts.
B)  Listing all accounts and their balances at a particular date to ensure that debits equal credits.
C)  Preparing a chronological record of all transactions affecting the company.
D)  Transferring debit and credit information from the journal to the accounts in the general ledger.E) A) and D)
F) A) and C)

Question 18

Receiving cash in advance from a customer for services to be provided in the future causes assets to increase and stockholders' equity to increase.

Accepted Answer

A) True 
 B)False

Question 19

A trial balance is a list of all accounts and their balances at a particular date,showing that assets equal liabilities.

Accepted Answer

A) True 
 B)False

Question 20

Assume that $18,000 cash is paid for insurance to cover the next year.The appropriate debit and credit are:

Accepted Answer

A)  Debit Insurance Expense $18,000,credit Prepaid Insurance $18,000.
B)  Debit Prepaid Insurance $18,000,credit Insurance Expense $18,000.
C)  Debit Prepaid Insurance $18,000,credit Cash $18,000.
D)  Debit Cash $18,000,credit Prepaid Insurance $18,000.E) A) and D)
F) A) and C)

Exam 2: The Accounting Information System

Describe the difference between external events and internal events and give two examples of each.

Correct Answer
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External events involve an exchange betw...
View Answer

Correct Answer
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Investments by stockholders have what effect on the accounting equation?

Correct Answer
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D

If a company provides services on account,which of the following is true?

Correct Answer
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A company pays $12,000 to purchase a one-year insurance policy.Record the transaction.

Correct Answer
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On July 7,2012,Saints Inc.received $10,000 in cash from a customer for services to be provided on October 10,2012.Which of the following describes how the transaction should be recorded on July 7,2012?

Correct Answer
verified

A company pays $800 dividends to stockholders.Indicate the amount of increases and decreases in the accounting equation.

Correct Answer
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After recording each transaction,total assets must equal total liabilities plus stockholders' equity.

Correct Answer
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True

Which of the following accounts would normally have a credit balance?

Correct Answer
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The following amounts are reported in the ledger of Mariah Company: $\begin{array} { l r } \text { Assets } & \$ 80,000 \\\text { Liabilities } & 36,000 \\\text { Retained Earnings } & 12,000\end{array}$ What is the balance in the Common Stock account?

Correct Answer
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Correct Answer
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Expenses normally carry a _ balance and are shown in the ___.

Correct Answer
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Receiving cash in advance from customers increases the Service Revenue account.

Correct Answer
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Unearned Revenue is a liability account.

Correct Answer
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Correct Answer
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Clement Company paid an account payable related to a previous utility bill of $1,000.This transaction should be recorded as follows on the payment date:

Correct Answer
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A

Posting transactions to the T-accounts involve:

Correct Answer
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Receiving cash in advance from a customer for services to be provided in the future causes assets to increase and stockholders' equity to increase.

Correct Answer
verified

A trial balance is a list of all accounts and their balances at a particular date,showing that assets equal liabilities.

Correct Answer
verified

Assume that $18,000 cash is paid for insurance to cover the next year.The appropriate debit and credit are:

Correct Answer
verified

Exam 2: The Accounting Information System

Describe the difference between external events and internal events and give two examples of each.

Correct AnswerverifiedExternal events involve an exchange betw...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Investments by stockholders have what effect on the accounting equation?

Correct AnswerverifiedD

If a company provides services on account,which of the following is true?

Correct AnswerverifiedShow Answer

A company pays $12,000 to purchase a one-year insurance policy.Record the transaction.

Correct AnswerverifiedShow Answer

On July 7,2012,Saints Inc.received $10,000 in cash from a customer for services to be provided on October 10,2012.Which of the following describes how the transaction should be recorded on July 7,2012?

Correct AnswerverifiedShow Answer

A company pays $800 dividends to stockholders.Indicate the amount of increases and decreases in the accounting equation.

Correct AnswerverifiedShow Answer

After recording each transaction,total assets must equal total liabilities plus stockholders' equity.

Correct AnswerverifiedTrue

Which of the following accounts would normally have a credit balance?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Expenses normally carry a _______ balance and are shown in the _________.

Correct AnswerverifiedShow Answer

Receiving cash in advance from customers increases the Service Revenue account.

Correct AnswerverifiedShow Answer

Unearned Revenue is a liability account.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Clement Company paid an account payable related to a previous utility bill of $1,000.This transaction should be recorded as follows on the payment date:

Correct AnswerverifiedA

Posting transactions to the T-accounts involve:

Correct AnswerverifiedShow Answer

Receiving cash in advance from a customer for services to be provided in the future causes assets to increase and stockholders' equity to increase.

Correct AnswerverifiedShow Answer

A trial balance is a list of all accounts and their balances at a particular date,showing that assets equal liabilities.

Correct AnswerverifiedShow Answer

Assume that $18,000 cash is paid for insurance to cover the next year.The appropriate debit and credit are:

Correct AnswerverifiedShow Answer

Correct Answer
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External events involve an exchange betw...
View Answer

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D

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True

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Correct Answer
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Correct Answer
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Expenses normally carry a _ balance and are shown in the ___.

Correct Answer
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A

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