Question 1

Which of the following journal entries is recorded correctly and in the basic format?

Accepted Answer

A) $$\begin{array}{l}
\text { Salaries and Wages Expense } \quad 550\
\begin{array} { c c c } 
\text { Cash } & & 1,500 \
\text { Advertising Expense } & 950 &
\end{array}
\end{array}$$ 
B) Salaries and Wages Expense $ \quad 550 $ 
Advertising Expense $ \quad 950 $ 
Cash$\quad$$\quad$$\quad$1,600 
C) $$\begin{array}{l}
\text { Cash }\
\begin{array} { l l l } 
\text { Salaries and Wages Expense } & 1,500 & 550 \
\text { Advertising Expense } & 950
\end{array}
\end{array}$$ 
D) Salaries and Wages Expense $ \quad 550 $
Advertising Expense $ \quad950 $
Cash$ \quad 1.500 $ 
A) $$\begin{array}{l}
\text { Salaries and Wages Expense } \quad 550\
\begin{array} { c c c } 
\text { Cash } & & 1,500 \
\text { Advertising Expense } & 950 &
\end{array}
\end{array}$$ 
B) Salaries and Wages Expense $ \quad 550 $ 
Advertising Expense $ \quad 950 $ 
Cash$\quad$$\quad$$\quad$1,600 
C) $$\begin{array}{l}
\text { Cash }\
\begin{array} { l l l } 
\text { Salaries and Wages Expense } & 1,500 & 550 \
\text { Advertising Expense } & 950
\end{array}
\end{array}$$ 
D) Salaries and Wages Expense $ \quad 550 $
Advertising Expense $ \quad950 $
Cash$ \quad 1.500 $

Question 2

Can accounting transaction debits and credits be recorded directly in the ledger accounts?
(b) What are the advantages of first recording transactions in the journal and then posting to the ledger?

Accepted Answer

(a) Yes debits and credits could be reco

Question 3

A debit to an asset account indicates a(n)

Accepted Answer

A)  error. 
B)  credit was made to a liability account. 
C)  decrease in the asset. 
D)  increase in the asset. 
A)  error. 
B)  credit was made to a liability account. 
C)  decrease in the asset. 
D)  increase in the asset.

Question 4

In the first month of operations, the total of the debit entries to the Cash account amounted to $1,000 and the total of the credit entries to the Cash account amounted to $600. The Cash account has a

Accepted Answer

A)  $600 credit balance. 
B)  $1,000 debit balance. 
C)  $400 debit balance. 
D)  $600 credit balance 
A)  $600 credit balance. 
B)  $1,000 debit balance. 
C)  $400 debit balance. 
D)  $600 credit balance

Question 5

Identify the impact on the accounting equation of the following transactions.
1. Purchased 24-month insurance policy for cash.
2. Purchased supplies on account.
3. Received utility bill to be paid at later date.
4. Paid utility bill previously accrued.

Accepted Answer

1. Net effect is no change: Increases as

Question 6

Steve Rondelli, a fellow student, contends that the double-entry system means each transaction must be recorded twice. Is Steve correct? Explain.

Accepted Answer

Steve is incorrect the double-entry syst

Question 7

On January 14, Decker industries purchased supplies of $500 on account. The entry to record the purchase will include

Accepted Answer

A)  a debit to Supplies and a credit to Accounts Payable. 
B)  a debit to Supplies Expense and a credit to Accounts Receivable. 
C)  a debit to Supplies and a credit to Cash. 
D)  a debit to Accounts Receivable and a credit to Supplies. 
A)  a debit to Supplies and a credit to Accounts Payable. 
B)  a debit to Supplies Expense and a credit to Accounts Receivable. 
C)  a debit to Supplies and a credit to Cash. 
D)  a debit to Accounts Receivable and a credit to Supplies.

Question 8

Which pair of the listed accounts follows the rules of debits and credits in relation to increases and decreases in the same manner?

Accepted Answer

A)  Salaries and Wages Expense and Notes Payable 
B)  Common Stock and Rent Expense 
C)  Prepaid Rent and Advertising Expense 
D)  Service Revenue and Equipment 
A)  Salaries and Wages Expense and Notes Payable 
B)  Common Stock and Rent Expense 
C)  Prepaid Rent and Advertising Expense 
D)  Service Revenue and Equipment

Question 9

A trial balance would only help in detecting which one of the following errors?

Accepted Answer

A)  A transaction that is not journalized 
B)  A journal entry that is posted twice 
C)  Offsetting errors made in recording the transaction 
D)  A transposition error when transferring the debit side of journal entry to the ledger 
A)  A transaction that is not journalized 
B)  A journal entry that is posted twice 
C)  Offsetting errors made in recording the transaction 
D)  A transposition error when transferring the debit side of journal entry to the ledger

Question 10

An expense

Accepted Answer

A)  decreases assets and liabilities. 
B)  decreases stockholders' equity. 
C)  leaves stockholders' equity unchanged. 
D)  is basically the same as a liability. 
A)  decreases assets and liabilities. 
B)  decreases stockholders' equity. 
C)  leaves stockholders' equity unchanged. 
D)  is basically the same as a liability.

Question 11

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 12

Which of the following are the same under both GAAP and IFRS?

Accepted Answer

A)  The account. 
B)  Debit and credit rules. 
C)  Steps in the recording process. 
D)  All of these answer choices are correct. 
A)  The account. 
B)  Debit and credit rules. 
C)  Steps in the recording process. 
D)  All of these answer choices are correct.

Question 13

On July 7, 2014, 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 14

The receipt of cash in advance from a customer

Accepted Answer

A)  increases assets and stockholders' equity. 
B)  increases assets and decreases stockholders' equity. 
C)  increases assets and liabilities. 
D)  none of these answer choices are correct. 
A)  increases assets and stockholders' equity. 
B)  increases assets and decreases stockholders' equity. 
C)  increases assets and liabilities. 
D)  none of these answer choices are correct.

Question 15

Transactions in a journal are initially recorded in

Accepted Answer

A)  account number order. 
B)  dollar amount order. 
C)  alphabetical order. 
D)  chronological order. 
A)  account number order. 
B)  dollar amount order. 
C)  alphabetical order. 
D)  chronological order.

Question 16

The best interpretation of the word "credit" is the

Accepted Answer

A)  offset side of an account. 
B)  increase side of an account. 
C)  right side of an account. 
D)  decrease side of an account. 
A)  offset side of an account. 
B)  increase side of an account. 
C)  right side of an account. 
D)  decrease side of an account.

Question 17

The purchase of an asset on credit

Accepted Answer

A)  increases assets and stockholders' equity. 
B)  increases assets and liabilities. 
C)  decreases assets and increases liabilities. 
D)  leaves total assets unchanged. 
A)  increases assets and stockholders' equity. 
B)  increases assets and liabilities. 
C)  decreases assets and increases liabilities. 
D)  leaves total assets unchanged.

Question 18

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

Accepted Answer

A)  cash register sales tape. 
B)  bill. 
C)  advertising brochure. 
D)  check. 
A)  cash register sales tape. 
B)  bill. 
C)  advertising brochure. 
D)  check.

Question 19

Transactions for the Hartman Company for the month of November are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations.
1. Stockholders invested an additional $40,000 cash in the business.
2. Purchased land costing $18,000 for cash.
3. Purchased equipment costing $45,000 for $4,500 cash and the remainder on credit.
4. Purchased supplies on account for $800.
5. Paid $3,000 for a one-year insurance policy.
6. Received $2,000 cash for services performed.
7. Received $5,000 for services previously performed on account.
8. Paid wages to employees for $2,500.
9. Paid dividends to stockholders of $400.

Accepted Answer

The answer of Transactions for the Hartman Company for the...

Question 20

Liabilities are increased with debits and decreased with credits.

Accepted Answer

A) True 
 B)False

Which of the following journal entries is recorded correctly and in the basic format?

Can accounting transaction debits and credits be recorded directly in the ledger accounts? (b) What are the advantages of first recording transactions in the journal and then posting to the ledger?

A debit to an asset account indicates a(n)

In the first month of operations, the total of the debit entries to the Cash account amounted to $1,000 and the total of the credit entries to the Cash account amounted to $600. The Cash account has a

Identify the impact on the accounting equation of the following transactions. 1. Purchased 24-month insurance policy for cash. 2. Purchased supplies on account. 3. Received utility bill to be paid at later date. 4. Paid utility bill previously accrued.

Steve Rondelli, a fellow student, contends that the double-entry system means each transaction must be recorded twice. Is Steve correct? Explain.

On January 14, Decker industries purchased supplies of $500 on account. The entry to record the purchase will include

Which pair of the listed accounts follows the rules of debits and credits in relation to increases and decreases in the same manner?

A trial balance would only help in detecting which one of the following errors?

An expense

A company that receives money in advance of performing a service

Which of the following are the same under both GAAP and IFRS?

On July 7, 2014, Shireman Enterprises received cash $1,400 for services rendered. The entry to record this transaction will include

The receipt of cash in advance from a customer

Transactions in a journal are initially recorded in

The best interpretation of the word "credit" is the

The purchase of an asset on credit

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

Liabilities are increased with debits and decreased with credits.

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 and Acquisitions in Accounting

Filters

Exam 3: The Accounting Information System

Which of the following journal entries is recorded correctly and in the basic format?

Can accounting transaction debits and credits be recorded directly in the ledger accounts? (b) What are the advantages of first recording transactions in the journal and then posting to the ledger?

A debit to an asset account indicates a(n)

In the first month of operations, the total of the debit entries to the Cash account amounted to $1,000 and the total of the credit entries to the Cash account amounted to $600. The Cash account has a

Identify the impact on the accounting equation of the following transactions. 1. Purchased 24-month insurance policy for cash. 2. Purchased supplies on account. 3. Received utility bill to be paid at later date. 4. Paid utility bill previously accrued.

Steve Rondelli, a fellow student, contends that the double-entry system means each transaction must be recorded twice. Is Steve correct? Explain.

On January 14, Decker industries purchased supplies of $500 on account. The entry to record the purchase will include

Which pair of the listed accounts follows the rules of debits and credits in relation to increases and decreases in the same manner?

A trial balance would only help in detecting which one of the following errors?

An expense

A company that receives money in advance of performing a service

Which of the following are the same under both GAAP and IFRS?

On July 7, 2014, Shireman Enterprises received cash $1,400 for services rendered. The entry to record this transaction will include

The receipt of cash in advance from a customer

Transactions in a journal are initially recorded in

The best interpretation of the word "credit" is the

The purchase of an asset on credit

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

Liabilities are increased with debits and decreased with credits.

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 and Acquisitions in Accounting

Filters