Question 1

The balance in Retained Earnings is decreased by debiting the account.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following accounts is decreased with a debit?

Accepted Answer

A) Accounts Receivable 
B) Accounts Payable 
C) Prepaid Rent 
D) Rent Expense 
A) Accounts Receivable 
B) Accounts Payable 
C) Prepaid Rent 
D) Rent Expense B

Question 3

Which of the following statement year,Valley Packaging Company's adjusted trial balance showed a zero balance in retained earnings.Which of the following is the most likely explanation for this?

Accepted Answer

A) Valley reported zero net income in the current year. 
B) Valley's trial balance will be out of balance until closing entries are recorded. 
C) The current year was Valley's first year in business. 
D) An error must have been made in preparing Valley's trial balance. 
A) Valley reported zero net income in the current year. 
B) Valley's trial balance will be out of balance until closing entries are recorded. 
C) The current year was Valley's first year in business. 
D) An error must have been made in preparing Valley's trial balance. C

Question 4

Nelson Company began operations on December 1, Year 1. The following transactions and adjustments were recorded in December and posted to the company's ledger accounts:  
1) Acquired $9,000 cash from the issue of common stock to its stockholders. 
2) Provided services on account for $7,500. 
3) Paid $4,500 cash for land. 
4) Owed $3,000 of salaries expenses to employees for work done in December that will be paid during January. 
5) Purchased $900 of supplies on account to be used in January. 
6) Collected $3,900 from customers.

What is the total of the debit account balances that will be reported on the company's adjusted trial balance at December 31,Year 1?

Accepted Answer

A) $12,000 
B) $20,400 
C) $6,900 
D) $28,800 
A) $12,000 
B) $20,400 
C) $6,900 
D) $28,800

Question 5

A transaction has been recorded in the T-accounts of Horowitz Corporation as follows:

Which of the following reflects how this event affects the company's financial statements?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 6

The employees of Able Company have worked the last two weeks of Year 1,but the employees' salaries have not been paid or recorded as of December 31,Year 1.The adjusting entry that Able should make to accrue these unpaid salaries on December 31,Year 1 is:

Accepted Answer

A) debit to Salaries Expense and credit to Cash. 
B) debit to Salaries Expense and credit to Salaries Payable. 
C) debit to Salaries Payable and credit to Salaries Expense. 
D) no entry is required until the employee is paid next period. 
A) debit to Salaries Expense and credit to Cash. 
B) debit to Salaries Expense and credit to Salaries Payable. 
C) debit to Salaries Payable and credit to Salaries Expense. 
D) no entry is required until the employee is paid next period.

Question 7

Callahan Corporation recorded an adjusting entry using T-accounts as follows:

Which of the following reflects how this adjustment affects the company's financial statements?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 8

The following transaction has been recorded in the general journal entry:
 
Which of the following could be an explanation for this transaction?

Accepted Answer

A) Provided services on account. 
B) Paid cash to settle accounts payable. 
C) Collected cash from customers. 
D) Borrowed money to support operating activities. 
A) Provided services on account. 
B) Paid cash to settle accounts payable. 
C) Collected cash from customers. 
D) Borrowed money to support operating activities.

Question 9

A transaction has been recorded in the T-accounts of Hough Company as follows:

Which of the following reflects how this event affects the company's financial statements?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 10

The Youngstown Company recorded the following adjustment in general journal format:
 
Which of the following choices accurately reflects how this event would affect the company's financial statements?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 11

A transaction has been recorded in the general journal of Todd Company as follows:
 
Which of the following could be an explanation for this transaction?

Accepted Answer

A) Incurred supplies expense 
B) Purchased supplies on account 
C) Used supplies 
D) Purchased supplies with cash 
A) Incurred supplies expense 
B) Purchased supplies on account 
C) Used supplies 
D) Purchased supplies with cash

Question 12

A transaction has been recorded in the general journal of Deluty Company as follows:
 
Which of the following describes the effect of this transaction on the company's financial statements?

Accepted Answer

A) Increases Stockholders' Equity 
B) Increases Liabilities 
C) Decreases Assets 
D) Increases Assets 
A) Increases Stockholders' Equity 
B) Increases Liabilities 
C) Decreases Assets 
D) Increases Assets

Question 13

A transaction has been recorded in the T-accounts of Simpson Company as follows:

Which of the following could be an explanation for this transaction?

Accepted Answer

A) The company borrowed $850. 
B) The company loaned $850 to another company. 
C) The company repaid a $850 debt. 
D) Simpson acquired $850 cash from the issue of common stock. 
A) The company borrowed $850. 
B) The company loaned $850 to another company. 
C) The company repaid a $850 debt. 
D) Simpson acquired $850 cash from the issue of common stock.

Question 14

A company's general ledger provides a chronological record of its business transactions.

Accepted Answer

A) True 
 B)False

Question 15

The left side of a T-account is the debit side.

Accepted Answer

A) True 
 B)False

Question 16

On August 1,Year 1,Bellisa Company issued a $10,000 6%,1-year note to Citizens Bank.Which of the following entries reflects the adjustment required as of December 31,Year 1?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 17

Which of the following transactions would increase a company's return-on-assets ratio?

Accepted Answer

A) Received cash from customers for goods sold to them on account last month. 
B) Borrowed cash from a local bank. 
C) Incurred expenses on account. 
D) Paid cash to settle accounts payable. 
A) Received cash from customers for goods sold to them on account last month. 
B) Borrowed cash from a local bank. 
C) Incurred expenses on account. 
D) Paid cash to settle accounts payable.

Question 18

Which of the following errors would cause the debit side of a trial balance to be larger than the credit side?

Accepted Answer

A) Revenue earned on account was recorded with a debit to Cash and a credit to Revenue. 
B) Purchase of supplies on account was recorded with a credit to Supplies and a debit to Accounts Payable. 
C) Land purchased with cash was recorded with a debit to the Land account and a credit to Accounts Payable. 
D) None of these answer choices would cause the debit side of the trial balance to be larger than the credit side. 
A) Revenue earned on account was recorded with a debit to Cash and a credit to Revenue. 
B) Purchase of supplies on account was recorded with a credit to Supplies and a debit to Accounts Payable. 
C) Land purchased with cash was recorded with a debit to the Land account and a credit to Accounts Payable. 
D) None of these answer choices would cause the debit side of the trial balance to be larger than the credit side.

Question 19

The three primary asset use transactions are incurring expenses,accruing liabilities,and paying dividends.

Accepted Answer

A) True 
 B)False

Question 20

The Dividends account normally has a credit balance.

Accepted Answer

A) True 
 B)False

The balance in Retained Earnings is decreased by debiting the account.

Which of the following accounts is decreased with a debit?

Which of the following statement year,Valley Packaging Company's adjusted trial balance showed a zero balance in retained earnings.Which of the following is the most likely explanation for this?

A transaction has been recorded in the T-accounts of Horowitz Corporation as follows: Which of the following reflects how this event affects the company's financial statements?

The employees of Able Company have worked the last two weeks of Year 1,but the employees' salaries have not been paid or recorded as of December 31,Year 1.The adjusting entry that Able should make to accrue these unpaid salaries on December 31,Year 1 is:

Callahan Corporation recorded an adjusting entry using T-accounts as follows: Which of the following reflects how this adjustment affects the company's financial statements?

The following transaction has been recorded in the general journal entry: Which of the following could be an explanation for this transaction?

A transaction has been recorded in the T-accounts of Hough Company as follows: Which of the following reflects how this event affects the company's financial statements?

The Youngstown Company recorded the following adjustment in general journal format: Which of the following choices accurately reflects how this event would affect the company's financial statements?

A transaction has been recorded in the general journal of Todd Company as follows: Which of the following could be an explanation for this transaction?

A transaction has been recorded in the general journal of Deluty Company as follows: Which of the following describes the effect of this transaction on the company's financial statements?

A transaction has been recorded in the T-accounts of Simpson Company as follows: Which of the following could be an explanation for this transaction?

A company's general ledger provides a chronological record of its business transactions.

The left side of a T-account is the debit side.

On August 1,Year 1,Bellisa Company issued a $10,000 6%,1-year note to Citizens Bank.Which of the following entries reflects the adjustment required as of December 31,Year 1?

Which of the following transactions would increase a company's return-on-assets ratio?

Which of the following errors would cause the debit side of a trial balance to be larger than the credit side?

The three primary asset use transactions are incurring expenses,accruing liabilities,and paying dividends.

The Dividends account normally has a credit balance.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

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Exam 3: The Double-Entry Accounting System

The balance in Retained Earnings is decreased by debiting the account.

Which of the following accounts is decreased with a debit?

Which of the following statement year,Valley Packaging Company's adjusted trial balance showed a zero balance in retained earnings.Which of the following is the most likely explanation for this?

A transaction has been recorded in the T-accounts of Horowitz Corporation as follows: Which of the following reflects how this event affects the company's financial statements?

The employees of Able Company have worked the last two weeks of Year 1,but the employees' salaries have not been paid or recorded as of December 31,Year 1.The adjusting entry that Able should make to accrue these unpaid salaries on December 31,Year 1 is:

Callahan Corporation recorded an adjusting entry using T-accounts as follows: Which of the following reflects how this adjustment affects the company's financial statements?

The following transaction has been recorded in the general journal entry: Which of the following could be an explanation for this transaction?

A transaction has been recorded in the T-accounts of Hough Company as follows: Which of the following reflects how this event affects the company's financial statements?

The Youngstown Company recorded the following adjustment in general journal format: Which of the following choices accurately reflects how this event would affect the company's financial statements?

A transaction has been recorded in the general journal of Todd Company as follows: Which of the following could be an explanation for this transaction?

A transaction has been recorded in the general journal of Deluty Company as follows: Which of the following describes the effect of this transaction on the company's financial statements?

A transaction has been recorded in the T-accounts of Simpson Company as follows: Which of the following could be an explanation for this transaction?

A company's general ledger provides a chronological record of its business transactions.

The left side of a T-account is the debit side.

On August 1,Year 1,Bellisa Company issued a $10,000 6%,1-year note to Citizens Bank.Which of the following entries reflects the adjustment required as of December 31,Year 1?

Which of the following transactions would increase a company's return-on-assets ratio?

Which of the following errors would cause the debit side of a trial balance to be larger than the credit side?

The three primary asset use transactions are incurring expenses,accruing liabilities,and paying dividends.

The Dividends account normally has a credit balance.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

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