Question 1

Mandy withdraws $600 from her business. This transaction increases cash but decreases owner's equity.

Accepted Answer

A) True 
 B)False  False

Question 2

The balance sheet

Accepted Answer

A)  is a list of all accounts showing the title and balance of each account. 
B)  is used as an aid in preparing the trial balance and income statement. 
C)  is for a period of time. 
D)  shows that assets equal liabilities plus owner's equity. 
A)  is a list of all accounts showing the title and balance of each account. 
B)  is used as an aid in preparing the trial balance and income statement. 
C)  is for a period of time. 
D)  shows that assets equal liabilities plus owner's equity. D

Question 3

A debit represents an increase in

Accepted Answer

A)  an asset. 
B)  a liability. 
C)  owner's equity. 
D)  revenues. 
A)  an asset. 
B)  a liability. 
C)  owner's equity. 
D)  revenues. A

Question 4

Increases are entered on the credit side of a(n)

Accepted Answer

A)  asset account. 
B)  liability account. 
C)  expense account. 
D)  drawing account. 
A)  asset account. 
B)  liability account. 
C)  expense account. 
D)  drawing account.

Question 5

When services are performed for which payment will be received later, accounts receivable increases.

Accepted Answer

A) True 
 B)False

Question 6

A trial balance is a list of all accounts showing the title and balance of each account.

Accepted Answer

A) True 
 B)False

Question 7

The drawing account should be used to show

Accepted Answer

A)  the amount the owner has invested in the business. 
B)  the amount the owner has taken out of the business. 
C)  the amount the business has earned. 
D)  the amount the business has spent. 
A)  the amount the owner has invested in the business. 
B)  the amount the owner has taken out of the business. 
C)  the amount the business has earned. 
D)  the amount the business has spent.

Question 8

Kate made a $475 payment on her company van. She should credit Accounts Payable and debit the automobile account.

Accepted Answer

A) True 
 B)False

Question 9

A credit increases liabilities and owner's equity.

Accepted Answer

A) True 
 B)False

Question 10

Falana receives payment for services performed in the amount of $3,147. This transaction

Accepted Answer

A)  decreases Wage Expense. 
B)  increases Cash. 
C)  increases owner's equity. 
D)  decreases Cash. 
A)  decreases Wage Expense. 
B)  increases Cash. 
C)  increases owner's equity. 
D)  decreases Cash.

Question 11

Footings in T accounts

Accepted Answer

A)  appear to the left of the amount columns. 
B)  are used for accounts with more than one debit or credit. 
C)  are only used in asset accounts. 
D)  are used for accounts with only one entry. 
A)  appear to the left of the amount columns. 
B)  are used for accounts with more than one debit or credit. 
C)  are only used in asset accounts. 
D)  are used for accounts with only one entry.

Question 12

A debit

Accepted Answer

A)  is on the left side. 
B)  decreases assets. 
C)  increases liabilities. 
D)  increases owner's equity. 
A)  is on the left side. 
B)  decreases assets. 
C)  increases liabilities. 
D)  increases owner's equity.

Question 13

Payment of rent on account decreases the Cash account.

Accepted Answer

A) True 
 B)False

Question 14

A T account has three parts: the title, the debit side, and the credit side.

Accepted Answer

A) True 
 B)False

Question 15

Match the terms with the definitions.
-A system in which each transaction has a dual effect on the accounting elements.

Accepted Answer

A) balance 
B) credit 
C) credit balance 
D) debit 
E) debit balance
F)double-entry accounting
G)footings
H)normal balance
I)T account
J)trial balance 
A) balance 
B) credit 
C) credit balance 
D) debit 
E) debit balance
F)double-entry accounting
G)footings
H)normal balance
I)T account
J)trial balance

Question 16

The owner's capital account normally has a credit balance.

Accepted Answer

A) True 
 B)False

Question 17

Asset and expense accounts normally have

Accepted Answer

A)  credit balances. 
B)  large balances. 
C)  debit balances. 
D)  negative balances. 
A)  credit balances. 
B)  large balances. 
C)  debit balances. 
D)  negative balances.

Question 18

Prepaid insurance and supplies are assets because they will provide benefits for more than one month.

Accepted Answer

A) True 
 B)False

Question 19

Match the terms with the definitions.
-The normal balance of liability, owner's equity, and revenue accounts.

Accepted Answer

A) balance 
B) credit 
C) credit balance 
D) debit 
E) debit balance
F)double-entry accounting
G)footings
H)normal balance
I)T account
J)trial balance 
A) balance 
B) credit 
C) credit balance 
D) debit 
E) debit balance
F)double-entry accounting
G)footings
H)normal balance
I)T account
J)trial balance

Question 20

An account is a form or record used to keep track of the increases or decreases in the individual assets, liabilities, owner's equity, revenues, and expenses of a business entity.

Accepted Answer

A) True 
 B)False

Exam 3: The Double-Entry Framework

Mandy withdraws $600 from her business. This transaction increases cash but decreases owner's equity.

The balance sheet

A debit represents an increase in

Increases are entered on the credit side of a(n)

When services are performed for which payment will be received later, accounts receivable increases.

A trial balance is a list of all accounts showing the title and balance of each account.

The drawing account should be used to show

Kate made a $475 payment on her company van. She should credit Accounts Payable and debit the automobile account.

A credit increases liabilities and owner's equity.

Falana receives payment for services performed in the amount of $3,147. This transaction

Footings in T accounts

A debit

Payment of rent on account decreases the Cash account.

A T account has three parts: the title, the debit side, and the credit side.

Match the terms with the definitions. -A system in which each transaction has a dual effect on the accounting elements.

The owner's capital account normally has a credit balance.

Asset and expense accounts normally have

Prepaid insurance and supplies are assets because they will provide benefits for more than one month.

Match the terms with the definitions. -The normal balance of liability, owner's equity, and revenue accounts.

An account is a form or record used to keep track of the increases or decreases in the individual assets, liabilities, owner's equity, revenues, and expenses of a business entity.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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