Question 1

A company that receives money in advance of performing a service

Accepted Answer

A) debits cash and credits prepaid services. 
B) debits unearned fees and credits accounts payable. 
C) debits cash and credits unearned service revenue. 
D) debits cash and credits accounts receivable. 
A) debits cash and credits prepaid services. 
B) debits unearned fees and credits accounts payable. 
C) debits cash and credits unearned service revenue. 
D) debits cash and credits accounts receivable.

Question 2

A trial balance will balance even if

Accepted Answer

A) a journal entry to record the purchase of equipment for cash of $45,000 is not posted. 
B) a $10,000 cash dividend is debited to dividends for $10,000 and credited to cash for $1,000. 
C) a $300 collection on accounts receivable is credited to accounts receivable for $300 without a corresponding debit. 
D) a purchase of supplies for $575 on account is debited to supplies for $575 and credited to accounts payable for $557. 
A) a journal entry to record the purchase of equipment for cash of $45,000 is not posted. 
B) a $10,000 cash dividend is debited to dividends for $10,000 and credited to cash for $1,000. 
C) a $300 collection on accounts receivable is credited to accounts receivable for $300 without a corresponding debit. 
D) a purchase of supplies for $575 on account is debited to supplies for $575 and credited to accounts payable for $557.

Question 3

On March 1, 2022, Freeze Company hires a new employee who will start to work on March 6.The employee will be paid on the last day of each month.Should a journal entry be made on March 6? Why or why not?

Accepted Answer

A) Yes, the company is now obligated to pay the employee, thus that event must be recorded. 
B) No, hiring an employee is an important event; however it is not an economic event that should be recorded. 
C) Yes, failure to record the event would cause the financial statements to be misleading. 
D) No, the financial position of the company has been changed, however, the dollar amount of the transaction is not yet known. 
A) Yes, the company is now obligated to pay the employee, thus that event must be recorded. 
B) No, hiring an employee is an important event; however it is not an economic event that should be recorded. 
C) Yes, failure to record the event would cause the financial statements to be misleading. 
D) No, the financial position of the company has been changed, however, the dollar amount of the transaction is not yet known.

Question 4

A decrease in a liability is recorded by a debit.

Accepted Answer

A) True 
 B)False

Question 5

Financing activities include the purchase or sale of long-lived assets or the purchase or sale of investment securities.

Accepted Answer

A) True 
 B)False

Question 6

On July 7, 2022, Shireman Enterprises received cash $1,400 for services rendered.The entry to record this transaction will include

Accepted Answer

A) a debit to Service Revenue of $1,400. 
B) a credit to Accounts Receivable of $1,400. 
C) a debit to Cash of $1,400. 
D) a credit to Accounts Payable of $1,400. 
A) a debit to Service Revenue of $1,400. 
B) a credit to Accounts Receivable of $1,400. 
C) a debit to Cash of $1,400. 
D) a credit to Accounts Payable of $1,400.

Question 7

The normal balance of the dividend account is a credit.

Accepted Answer

A) True 
 B)False

Question 8

The journal is a chronological record of all transactions.

Accepted Answer

A) True 
 B)False

Question 9

The Unearned Service Revenue account is classified as a(n)

Accepted Answer

A) asset. 
B) revenue. 
C) expense. 
D) liability. 
A) asset. 
B) revenue. 
C) expense. 
D) liability.

Question 10

In a trial balance, all debits are listed before all credits.

Accepted Answer

A) True 
 B)False

Question 11

If a revenue account is credited, the revenue account is increased.

Accepted Answer

A) True 
 B)False

Question 12

Transactions are recorded in alphabetical order in a journal.

Accepted Answer

A) True 
 B)False

Question 13

At May 1, Barclays Inc.reported at Cash account balance of $1,000.During the month, the total of the debit entries to the Cash account amounted to $2,000 and the total of the credit entries to the Cash account amounted to $1,800.At the end of May, Barclays' Cash account has a

Accepted Answer

A) $1,800 credit balance. 
B) $3,000 debit balance. 
C) $1,200 debit balance. 
D) -$1,800 credit balance. 
A) $1,800 credit balance. 
B) $3,000 debit balance. 
C) $1,200 debit balance. 
D) -$1,800 credit balance.

Question 14

If total liabilities decreased by $4,000, then

Accepted Answer

A) stockholders' equity must have decreased by $4,000. 
B) assets must have decreased by $4,000, or stockholders' equity must have increased by $4,000. 
C) assets and stockholders' equity each increased by $2,000. 
D) assets must have increased by $4,000. 
A) stockholders' equity must have decreased by $4,000. 
B) assets must have decreased by $4,000, or stockholders' equity must have increased by $4,000. 
C) assets and stockholders' equity each increased by $2,000. 
D) assets must have increased by $4,000.

Question 15

If a company has overdrawn its bank balance, then

Accepted Answer

A) its Cash account will show a debit balance. 
B) its Cash account will show a credit balance. 
C) the Cash account debits will exceed the cash account credits. 
D) it cannot be detected by observing the balance of the Cash account. 
A) its Cash account will show a debit balance. 
B) its Cash account will show a credit balance. 
C) the Cash account debits will exceed the cash account credits. 
D) it cannot be detected by observing the balance of the Cash account.

Question 16

The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

Accepted Answer

A) True 
 B)False

Question 17

During February 2022, its first month of operations, the owner of Schwenn Enterprises invested cash of $100,000.Schwenn had cash sales of $20,000 and paid expenses of $35,000.Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28, 2022?

Accepted Answer

A) $15,000 credit 
B) $85,000 debit 
C) $120,000 debit 
D) $65,000 credit 
A) $15,000 credit 
B) $85,000 debit 
C) $120,000 debit 
D) $65,000 credit

Question 18

The complete effect of a transaction on the accounts is disclosed in the journal.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following accounts would likely be listed after the others in a chart of accounts?

Accepted Answer

A) Accumulated Depreciation-Buildings 
B) Insurance Expense 
C) Dividends 
D) Notes Payable 
A) Accumulated Depreciation-Buildings 
B) Insurance Expense 
C) Dividends 
D) Notes Payable

Question 20

The classification and normal balance of the Dividends account is

Accepted Answer

A) revenue with a credit balance. 
B) an expense with a debit balance. 
C) a liability with a credit balance. 
D) stockholders' equity with a debit balance. 
A) revenue with a credit balance. 
B) an expense with a debit balance. 
C) a liability with a credit balance. 
D) stockholders' equity with a debit balance.

A company that receives money in advance of performing a service

A trial balance will balance even if

On March 1, 2022, Freeze Company hires a new employee who will start to work on March 6.The employee will be paid on the last day of each month.Should a journal entry be made on March 6? Why or why not?

A decrease in a liability is recorded by a debit.

Financing activities include the purchase or sale of long-lived assets or the purchase or sale of investment securities.

On July 7, 2022, Shireman Enterprises received cash $1,400 for services rendered.The entry to record this transaction will include

The normal balance of the dividend account is a credit.

The journal is a chronological record of all transactions.

The Unearned Service Revenue account is classified as a(n)

In a trial balance, all debits are listed before all credits.

If a revenue account is credited, the revenue account is increased.

Transactions are recorded in alphabetical order in a journal.

At May 1, Barclays Inc.reported at Cash account balance of $1,000.During the month, the total of the debit entries to the Cash account amounted to $2,000 and the total of the credit entries to the Cash account amounted to $1,800.At the end of May, Barclays' Cash account has a

If total liabilities decreased by $4,000, then

If a company has overdrawn its bank balance, then

The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

During February 2022, its first month of operations, the owner of Schwenn Enterprises invested cash of $100,000.Schwenn had cash sales of $20,000 and paid expenses of $35,000.Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28, 2022?

The complete effect of a transaction on the accounts is disclosed in the journal.

Which of the following accounts would likely be listed after the others in a chart of accounts?

The classification and normal balance of the Dividends account is

Introduction to Financial Statements

A Further Look at Financial Statements

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

Exam 3: The Accounting Information System

A company that receives money in advance of performing a service

A trial balance will balance even if

On March 1, 2022, Freeze Company hires a new employee who will start to work on March 6.The employee will be paid on the last day of each month.Should a journal entry be made on March 6? Why or why not?

A decrease in a liability is recorded by a debit.

Financing activities include the purchase or sale of long-lived assets or the purchase or sale of investment securities.

On July 7, 2022, Shireman Enterprises received cash $1,400 for services rendered.The entry to record this transaction will include

The normal balance of the dividend account is a credit.

The journal is a chronological record of all transactions.

The Unearned Service Revenue account is classified as a(n)

In a trial balance, all debits are listed before all credits.

If a revenue account is credited, the revenue account is increased.

Transactions are recorded in alphabetical order in a journal.

At May 1, Barclays Inc.reported at Cash account balance of $1,000.During the month, the total of the debit entries to the Cash account amounted to $2,000 and the total of the credit entries to the Cash account amounted to $1,800.At the end of May, Barclays' Cash account has a

If total liabilities decreased by $4,000, then

If a company has overdrawn its bank balance, then

The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

During February 2022, its first month of operations, the owner of Schwenn Enterprises invested cash of $100,000.Schwenn had cash sales of $20,000 and paid expenses of $35,000.Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28, 2022?

The complete effect of a transaction on the accounts is disclosed in the journal.

Which of the following accounts would likely be listed after the others in a chart of accounts?

The classification and normal balance of the Dividends account is

Introduction to Financial Statements

A Further Look at Financial Statements

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters