Question 1

The general ledger is an internal report that lists all the accounts and their balances and is used to check that total debits equals total credits.

Accepted Answer

A) True 
 B)False

Question 2

Slug,Inc.purchases equipment for $1,200,000 million paying $180,000 in cash and issuing $1,020,000 in promissory notes.When the journal entry is posted to the related accounts:

Accepted Answer

A) $1,200,000 will be credited and $180,000 will be debited to asset accounts;$1,020,000 will be debited to liability accounts. 
B) $1,200,000 will be debited to asset accounts;$1,020,000 will be credited to liability accounts. 
C) $1,200,000 will be debited and $180,000 will be credited to asset accounts;$1,020,000 will be credited to liability accounts. 
D) $1,200,000 will be credited to asset accounts;$1,200,000 will be debited to liability accounts. 
A) $1,200,000 will be credited and $180,000 will be debited to asset accounts;$1,020,000 will be debited to liability accounts. 
B) $1,200,000 will be debited to asset accounts;$1,020,000 will be credited to liability accounts. 
C) $1,200,000 will be debited and $180,000 will be credited to asset accounts;$1,020,000 will be credited to liability accounts. 
D) $1,200,000 will be credited to asset accounts;$1,200,000 will be debited to liability accounts.

Question 3

Which of the following would be listed as a current liability?

Accepted Answer

A) Cash 
B) Notes Payable (due in two years) 
C) Supplies 
D) Accounts Payable 
A) Cash 
B) Notes Payable (due in two years) 
C) Supplies 
D) Accounts Payable

Question 4

The list of account names and reference numbers that the company will use when accounting for transactions is called the chart of accounts.

Accepted Answer

A) True 
 B)False

Question 5

In a classified balance sheet,assets and liabilities are classified according to whether they are current or noncurrent.Which of the following statements is not correct about current assets?

Accepted Answer

A) They will be acquired within one year. 
B) They will be converted to cash within one year. 
C) They will be sold within one year. 
D) They will be used up within one year. 
A) They will be acquired within one year. 
B) They will be converted to cash within one year. 
C) They will be sold within one year. 
D) They will be used up within one year.

Question 6

Match the term with its definition.(There are more definitions than terms. )
-Chart Of Accounts

Accepted Answer

A) A summary of account names and numbers. 
B) A simplified version of an account in the General Ledger. 
C) Compares balance sheet items from two different time periods. 
D) When a dollar value is assigned to an item recorded in the accounting system. 
E) A journal entry that lowers the balance of the account.
F)An amount that is posted on the left side of a T-account or ledger.
G)The concept that a company must keep separate accounts by time period.
H)An amount that is posted on the right side of a T-account or ledger.
I)Assets are initially recorded at the amount paid to acquire them.
J)When journal entries are recorded in the appropriate T-account or ledger.
K)When a company's balance sheet has been verified by an outside auditor.
L)The principle that a company should use the least optimistic measure,when uncertainty exists.
M)The concept that any transaction must have at least two effects on the accounting equation.
N)The mechanism used to record each transaction in the General Journal. 
A) A summary of account names and numbers. 
B) A simplified version of an account in the General Ledger. 
C) Compares balance sheet items from two different time periods. 
D) When a dollar value is assigned to an item recorded in the accounting system. 
E) A journal entry that lowers the balance of the account.
F)An amount that is posted on the left side of a T-account or ledger.
G)The concept that a company must keep separate accounts by time period.
H)An amount that is posted on the right side of a T-account or ledger.
I)Assets are initially recorded at the amount paid to acquire them.
J)When journal entries are recorded in the appropriate T-account or ledger.
K)When a company's balance sheet has been verified by an outside auditor.
L)The principle that a company should use the least optimistic measure,when uncertainty exists.
M)The concept that any transaction must have at least two effects on the accounting equation.
N)The mechanism used to record each transaction in the General Journal.

Question 7

Which of the following sequences indicates the correct order of steps in the accounting cycle?

Accepted Answer

A) Post to ledger,prepare journal entries,prepare trial balance,and prepare financial statements. 
B) Post to ledger,prepare journal entries,prepare financial statements,and prepare trial balance. 
C) Prepare journal entries,post to ledger,prepare trial balance,and prepare financial statements. 
D) Prepare journal entries,post to ledger,prepare financial statements,and prepare trial balance. 
A) Post to ledger,prepare journal entries,prepare trial balance,and prepare financial statements. 
B) Post to ledger,prepare journal entries,prepare financial statements,and prepare trial balance. 
C) Prepare journal entries,post to ledger,prepare trial balance,and prepare financial statements. 
D) Prepare journal entries,post to ledger,prepare financial statements,and prepare trial balance.

Question 8

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Accepted Answer

A) True 
 B)False

Question 9

Listed below are components of several transactions.Indicate whether a debit (dr)or credit (cr)would be required to record the component of the transaction.
-Decrease in Notes Payable.

Accepted Answer

A) cr 
B) dr 
A) cr 
B) dr

Question 10

If the total dollar value of debits to an account exceeds the total dollar value of credits to that account,the ending balance of the account will be a debit balance.

Accepted Answer

A) True 
 B)False

Question 11

The Noble Corp.installs $75,000 of equipment,paying $25,000 cash and promising to pay the remaining $50,000 in 6 months.What is the impact to this transaction on the accounting equation?

Accepted Answer

A) Total assets are increased by $50,000. 
B) Current assets are increased by $50,000. 
C) Total assets are increased by $75,000. 
D) Current assets are increased by $75,000. 
A) Total assets are increased by $50,000. 
B) Current assets are increased by $50,000. 
C) Total assets are increased by $75,000. 
D) Current assets are increased by $75,000.

Question 12

If a company pays back money borrowed from a bank,which of the following would be included in the journal entry to record this transaction?

Accepted Answer

A) Credit Notes Payable and debit Common Stock 
B) Debit Cash and credit Notes Payable 
C) Debit Cash and credit Common Stock 
D) Credit Cash and debit Notes Payable 
A) Credit Notes Payable and debit Common Stock 
B) Debit Cash and credit Notes Payable 
C) Debit Cash and credit Common Stock 
D) Credit Cash and debit Notes Payable

Question 13

Candy Cane's ice cream shop,which opened in June,is a local hit.In July,Candy Cane hired a new employee at a rate of $1,200 per month to start work at the beginning of August.In July,Candy Cane should record:

Accepted Answer

A) nothing,because an exchange of promises is not a transaction. 
B) a $1,200 increase to Prepaid Wages and a $1,200 decrease to Cash. 
C) a $1,200 increase to Wage Expense and a $1,200 decrease to Cash. 
D) a $1,200 increase in Wages Payable and a $1,200 increase in Wages Expense. 
A) nothing,because an exchange of promises is not a transaction. 
B) a $1,200 increase to Prepaid Wages and a $1,200 decrease to Cash. 
C) a $1,200 increase to Wage Expense and a $1,200 decrease to Cash. 
D) a $1,200 increase in Wages Payable and a $1,200 increase in Wages Expense.

Question 14

Goodrich,Inc.signed an agreement to rent a warehouse from Ellie Co.This is an example of a transaction that should not be recorded.

Accepted Answer

A) True 
 B)False

Question 15

The characteristic shared by all liabilities is that they:

Accepted Answer

A) provide a future economic benefit. 
B) result in an inflow of resources to the company. 
C) always end in the word "payable." 
D) obligate the company to do something in the future. 
A) provide a future economic benefit. 
B) result in an inflow of resources to the company. 
C) always end in the word "payable." 
D) obligate the company to do something in the future.

Question 16

Match the term with its definition.(There are more definitions than terms. )
-Common Stock

Accepted Answer

A) The abbreviation for an item posted on the left side of a T-account. 
B) A balance sheet that has not yet been publicly released. 
C) A transaction that is triggered automatically merely by the passage of time. 
D) When a company becomes included in the Fortune 500. 
E) The account credited when cash is received in exchange for stock issued.
F)The value of a company's public relations campaign.
G)An event that has no effect on the balance sheet and is not recorded in the financial statements.
H)A balance sheet that has assets and liabilities categorized as current vs.noncurrent.
I)Amounts owed to suppliers for goods or services bought on credit.
J)The abbreviation for an item posted on the right side of a T-account.
K)An exchange or event that has a direct impact on a company's financial statements.
L)Liabilities divided by assets.
M)Another name for stockholders' equity or shareholders' equity.
N)A method of recording a transaction in debit/credit format.
O)The expression that assets must equal liabilities plus stockholders' equity. 
A) The abbreviation for an item posted on the left side of a T-account. 
B) A balance sheet that has not yet been publicly released. 
C) A transaction that is triggered automatically merely by the passage of time. 
D) When a company becomes included in the Fortune 500. 
E) The account credited when cash is received in exchange for stock issued.
F)The value of a company's public relations campaign.
G)An event that has no effect on the balance sheet and is not recorded in the financial statements.
H)A balance sheet that has assets and liabilities categorized as current vs.noncurrent.
I)Amounts owed to suppliers for goods or services bought on credit.
J)The abbreviation for an item posted on the right side of a T-account.
K)An exchange or event that has a direct impact on a company's financial statements.
L)Liabilities divided by assets.
M)Another name for stockholders' equity or shareholders' equity.
N)A method of recording a transaction in debit/credit format.
O)The expression that assets must equal liabilities plus stockholders' equity.

Question 17

Which of the following would not be recorded as an accounting transaction?

Accepted Answer

A) Issuing stock to owners in exchange for cash 
B) Ordering supplies to be delivered next month 
C) Selling inventory to customers in exchange for cash to be received next month 
D) Paying the bank for a portion of a note payable 
A) Issuing stock to owners in exchange for cash 
B) Ordering supplies to be delivered next month 
C) Selling inventory to customers in exchange for cash to be received next month 
D) Paying the bank for a portion of a note payable

Question 18

When accounts receivable are collected:

Accepted Answer

A) stockholders' equity increases. 
B) total assets increase. 
C) total assets decrease. 
D) the amount of total assets is unchanged. 
A) stockholders' equity increases. 
B) total assets increase. 
C) total assets decrease. 
D) the amount of total assets is unchanged.

Question 19

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name.How would the benefits of this publicity appear on the balance sheet?

Accepted Answer

A) It would appear as a current asset. 
B) It would appear as Common Stock. 
C) It would appear as a noncurrent asset. 
D) It would not appear on the balance sheet. 
A) It would appear as a current asset. 
B) It would appear as Common Stock. 
C) It would appear as a noncurrent asset. 
D) It would not appear on the balance sheet.

Question 20

Forrest Industries has the following information in regard to its Cash account for the month of August.The account had a normal balance of $62,500 on August 1.During August,it had three debit entries totaling $250,000.The balance in the Cash account on August 31 was $112,500.What was the total of the credit entries to the Cash account during the month of August?

Accepted Answer

A) $50,000 
B) $112,500 
C) $200,000 
D) $300,000 
A) $50,000 
B) $112,500 
C) $200,000 
D) $300,000

The general ledger is an internal report that lists all the accounts and their balances and is used to check that total debits equals total credits.

Slug,Inc.purchases equipment for $1,200,000 million paying $180,000 in cash and issuing $1,020,000 in promissory notes.When the journal entry is posted to the related accounts:

Which of the following would be listed as a current liability?

The list of account names and reference numbers that the company will use when accounting for transactions is called the chart of accounts.

In a classified balance sheet,assets and liabilities are classified according to whether they are current or noncurrent.Which of the following statements is not correct about current assets?

Match the term with its definition.(There are more definitions than terms. ) -Chart Of Accounts

Which of the following sequences indicates the correct order of steps in the accounting cycle?

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Listed below are components of several transactions.Indicate whether a debit (dr)or credit (cr)would be required to record the component of the transaction. -Decrease in Notes Payable.

If the total dollar value of debits to an account exceeds the total dollar value of credits to that account,the ending balance of the account will be a debit balance.

The Noble Corp.installs $75,000 of equipment,paying $25,000 cash and promising to pay the remaining $50,000 in 6 months.What is the impact to this transaction on the accounting equation?

If a company pays back money borrowed from a bank,which of the following would be included in the journal entry to record this transaction?

Candy Cane's ice cream shop,which opened in June,is a local hit.In July,Candy Cane hired a new employee at a rate of $1,200 per month to start work at the beginning of August.In July,Candy Cane should record:

Goodrich,Inc.signed an agreement to rent a warehouse from Ellie Co.This is an example of a transaction that should not be recorded.

The characteristic shared by all liabilities is that they:

Match the term with its definition.(There are more definitions than terms. ) -Common Stock

Which of the following would not be recorded as an accounting transaction?

When accounts receivable are collected:

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name.How would the benefits of this publicity appear on the balance sheet?

Business Decisions and Financial Accounting

The Income Statement

Adjustments,Financial Statements,and Financial Results

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 2: The Balance Sheet

The general ledger is an internal report that lists all the accounts and their balances and is used to check that total debits equals total credits.

Slug,Inc.purchases equipment for $1,200,000 million paying $180,000 in cash and issuing $1,020,000 in promissory notes.When the journal entry is posted to the related accounts:

Which of the following would be listed as a current liability?

The list of account names and reference numbers that the company will use when accounting for transactions is called the chart of accounts.

In a classified balance sheet,assets and liabilities are classified according to whether they are current or noncurrent.Which of the following statements is not correct about current assets?

Match the term with its definition.(There are more definitions than terms. ) -Chart Of Accounts

Which of the following sequences indicates the correct order of steps in the accounting cycle?

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Listed below are components of several transactions.Indicate whether a debit (dr)or credit (cr)would be required to record the component of the transaction. -Decrease in Notes Payable.

If the total dollar value of debits to an account exceeds the total dollar value of credits to that account,the ending balance of the account will be a debit balance.

The Noble Corp.installs $75,000 of equipment,paying $25,000 cash and promising to pay the remaining $50,000 in 6 months.What is the impact to this transaction on the accounting equation?

If a company pays back money borrowed from a bank,which of the following would be included in the journal entry to record this transaction?

Candy Cane's ice cream shop,which opened in June,is a local hit.In July,Candy Cane hired a new employee at a rate of $1,200 per month to start work at the beginning of August.In July,Candy Cane should record:

Goodrich,Inc.signed an agreement to rent a warehouse from Ellie Co.This is an example of a transaction that should not be recorded.

The characteristic shared by all liabilities is that they:

Match the term with its definition.(There are more definitions than terms. ) -Common Stock

Which of the following would not be recorded as an accounting transaction?

When accounts receivable are collected:

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name.How would the benefits of this publicity appear on the balance sheet?

Business Decisions and Financial Accounting

The Income Statement

Adjustments,Financial Statements,and Financial Results

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters