Question 1

Clinton prepares monthly financial statements.Which of the following violates the matching principle?

Accepted Answer

A) A portion of the salary payments made this month are not recognized as expense because some of the work was done by employees last month. 
B) The premium on a six-month insurance policy is charged immediately to expense. 
C) Expenses for the period exceed revenues. 
D) The cost of advertising done during the month is charged to expense even though no payment is due for 60 days. 
A) A portion of the salary payments made this month are not recognized as expense because some of the work was done by employees last month. 
B) The premium on a six-month insurance policy is charged immediately to expense. 
C) Expenses for the period exceed revenues. 
D) The cost of advertising done during the month is charged to expense even though no payment is due for 60 days.

Question 2

On June 27,Healthy Life Services,Inc.performed extensive tests on lab specimens submitted by several customers and sent invoices totaling $5,200,due in 30 days.

Accepted Answer

A) No revenue from rendering these services should be recorded until payment is received. 
B) This situation causes an increase in assets and in revenue in June,but has no effect on owners' equity until payment is received. 
C) Revenue is earned in June,but assets are not increased until payment is received. 
D) Assets,revenue,and owners' equity are increased in June,regardless of when payments are received for the services rendered. 
A) No revenue from rendering these services should be recorded until payment is received. 
B) This situation causes an increase in assets and in revenue in June,but has no effect on owners' equity until payment is received. 
C) Revenue is earned in June,but assets are not increased until payment is received. 
D) Assets,revenue,and owners' equity are increased in June,regardless of when payments are received for the services rendered.

Question 3

When making a general journal entry,there can only be one debit and one credit.

Accepted Answer

A) True 
 B)False

Question 4

The reason that both expenses and dividends are recorded by debit entries is that:

Accepted Answer

A) All dividend and expense transactions involve offsetting credit entries to the Cash account. 
B) Both expenses and dividends are offset against revenues in the income statement. 
C) Both expenses and dividends reduce owners' equity. 
D) The statement is untrue-expenses are recorded by debits,but dividends are recorded by credits to the owners' equity account. 
A) All dividend and expense transactions involve offsetting credit entries to the Cash account. 
B) Both expenses and dividends are offset against revenues in the income statement. 
C) Both expenses and dividends reduce owners' equity. 
D) The statement is untrue-expenses are recorded by debits,but dividends are recorded by credits to the owners' equity account.

Question 5

Which of the following is not true regarding the general ledger account for Cash?

Accepted Answer

A) The balance of the account indicates the amount of cash owned by the business on a particular date. 
B) Each debit entry in the Cash account represents a cash receipt. 
C) Debit entries are made before credit entries. 
D) Credit entries in the Cash account represent cash payments. 
A) The balance of the account indicates the amount of cash owned by the business on a particular date. 
B) Each debit entry in the Cash account represents a cash receipt. 
C) Debit entries are made before credit entries. 
D) Credit entries in the Cash account represent cash payments.

Question 6

Master Equipment has a $17,400 liability to Arrow Paint Co.When Master Equipment makes a partial payment of $7,600 on this liability,which of following occurs?

Accepted Answer

A) Retained earnings are debited $9,800. 
B) The Accounts Payable account is credited $9,800. 
C) The Cash account is debited $7,600. 
D) The Accounts Payable account is debited $7,600. 
A) Retained earnings are debited $9,800. 
B) The Accounts Payable account is credited $9,800. 
C) The Cash account is debited $7,600. 
D) The Accounts Payable account is debited $7,600.

Question 7

At the end of October,Flagship Marina received a bill for fuel used in October.Payment is not due until November 30.This transaction:

Accepted Answer

A) Should not be recorded in the accounting records until November. 
B) Causes a decrease in assets and in owners' equity in November,when the bill is paid. 
C) Should be recorded as an expense of October,regardless of the payment date. 
D) Is recorded as a liability in October,but is not considered an expense until paid. 
A) Should not be recorded in the accounting records until November. 
B) Causes a decrease in assets and in owners' equity in November,when the bill is paid. 
C) Should be recorded as an expense of October,regardless of the payment date. 
D) Is recorded as a liability in October,but is not considered an expense until paid.

Question 8

In a ledger,debit entries cause:

Accepted Answer

A) Increases in owners' equity,decreases in liabilities,and increases in assets. 
B) Decreases in liabilities,increases in assets,and decreases in owners' equity. 
C) Decreases in assets,decreases in liabilities,and increases in owners' equity. 
D) Decreases in assets,increases in liabilities,and increases in owners' equity. 
A) Increases in owners' equity,decreases in liabilities,and increases in assets. 
B) Decreases in liabilities,increases in assets,and decreases in owners' equity. 
C) Decreases in assets,decreases in liabilities,and increases in owners' equity. 
D) Decreases in assets,increases in liabilities,and increases in owners' equity.

Question 9

Green Systems sold and delivered modems to Blue Computers for $660,000 to be paid by Blue in three equal installments over the next three months.The journal entry made by Blue Computers to record the last of the three installment payments will include:

Accepted Answer

A) A debit of $220,000 to Modem Expense. 
B) A debit of $220,000 to Accounts Receivable. 
C) A debit of $220,000 to Cash. 
D) A debit of $220,000 to Accounts Payable. 
A) A debit of $220,000 to Modem Expense. 
B) A debit of $220,000 to Accounts Receivable. 
C) A debit of $220,000 to Cash. 
D) A debit of $220,000 to Accounts Payable.

Question 10

In accounting,the terms debit and credit indicate,respectively:

Accepted Answer

A) Increase and decrease. 
B) Left and right. 
C) Decrease and increase. 
D) Right and left. 
A) Increase and decrease. 
B) Left and right. 
C) Decrease and increase. 
D) Right and left.

Question 11

Transactions are recorded in the general journal in:

Accepted Answer

A) Numerical order. 
B) Chronological order. 
C) Account number order. 
D) Financial statement order. 
A) Numerical order. 
B) Chronological order. 
C) Account number order. 
D) Financial statement order.

Question 12

All of the following statements are true of double-entry accounting except:

Accepted Answer

A) There is a need for both debit and credit entries for each and every transaction. 
B) Double-entry accounting can only be used with computer-based accounting systems. 
C) The total dollar amount of debit entries posted to the general ledger is equal to the dollar amount of the credit entries. 
D) Double-entry accounting allows us to measure net income at the same time we record the effect of transactions on the balance sheet accounts. 
A) There is a need for both debit and credit entries for each and every transaction. 
B) Double-entry accounting can only be used with computer-based accounting systems. 
C) The total dollar amount of debit entries posted to the general ledger is equal to the dollar amount of the credit entries. 
D) Double-entry accounting allows us to measure net income at the same time we record the effect of transactions on the balance sheet accounts.

Question 13

On June 18,Baltic Arena paid $6,600 to Marvin Maintenance,Inc.for cleaning the arena following a monster truck show.Which of the following most likely occurred as a result of this transaction?

Accepted Answer

A) The accounts receivable account was debited. 
B) Total assets increased. 
C) The cash account was credited. 
D) Total liabilities increased. 
A) The accounts receivable account was debited. 
B) Total assets increased. 
C) The cash account was credited. 
D) Total liabilities increased.

Question 14

Recording transactions in general journal
Enter the following transactions in the two-column journal of Baumann Bathrooms.Include a brief explanation of the transaction as part of each journal entry.

Accepted Answer

The answer of Recording transactions in general journal
Enter the following...

Question 15

Recording transactions journal entry grid
A list of accounts for Harding Company is given below,followed by a series of transactions.Indicate the accounts that would be debited and credited in recording each transaction by placing the appropriate number (or numbers)in the space provided.

Accepted Answer

The answer of Recording transactions journal entry grid
A list of...

Question 16

Recording transactions in general journal
Enter the following transactions in the two-column journal of Festive Parties,Inc.Include a brief explanation of the transaction as part of each journal entry.

Accepted Answer

The answer of Recording transactions in general journal
Enter the following...

Question 17

Montauk Oil Co.reports these account balances at December 31,2014   On January 2,2015,Montauk Oil collected $50,000 of its accounts receivable and paid $20,000 of its accounts payable.On January 3,2015,total liabilities are:

Accepted Answer

A) $370,000. 
B) $350,000. 
C) $300,000. 
D) $70,000. 
A) $370,000. 
B) $350,000. 
C) $300,000. 
D) $70,000.

Question 18

The purpose of accrual accounting is to measure the amounts of cash received and paid during the period.

Accepted Answer

A) True 
 B)False

Question 19

The reason that revenue is recorded by a credit entry to a revenue account is:

Accepted Answer

A) That revenue always involves a debit to the Cash account. 
B) Explained by the realization principle. 
C) Explained by the matching principle. 
D) That revenue increases owners' equity. 
A) That revenue always involves a debit to the Cash account. 
B) Explained by the realization principle. 
C) Explained by the matching principle. 
D) That revenue increases owners' equity.

Question 20

Earning revenue increases owners' equity and expenses reduce owners' equity,therefore,revenues are recorded with debit entries and expenses are recorded with credit entries.

Accepted Answer

A) True 
 B)False

Exam 3: The Accounting Cycle: Capturing Economic Events

Clinton prepares monthly financial statements.Which of the following violates the matching principle?

On June 27,Healthy Life Services,Inc.performed extensive tests on lab specimens submitted by several customers and sent invoices totaling $5,200,due in 30 days.

When making a general journal entry,there can only be one debit and one credit.

The reason that both expenses and dividends are recorded by debit entries is that:

Which of the following is not true regarding the general ledger account for Cash?

Master Equipment has a $17,400 liability to Arrow Paint Co.When Master Equipment makes a partial payment of $7,600 on this liability,which of following occurs?

At the end of October,Flagship Marina received a bill for fuel used in October.Payment is not due until November 30.This transaction:

In a ledger,debit entries cause:

Green Systems sold and delivered modems to Blue Computers for $660,000 to be paid by Blue in three equal installments over the next three months.The journal entry made by Blue Computers to record the last of the three installment payments will include:

In accounting,the terms debit and credit indicate,respectively:

Transactions are recorded in the general journal in:

All of the following statements are true of double-entry accounting except:

On June 18,Baltic Arena paid $6,600 to Marvin Maintenance,Inc.for cleaning the arena following a monster truck show.Which of the following most likely occurred as a result of this transaction?

Recording transactions in general journal Enter the following transactions in the two-column journal of Baumann Bathrooms.Include a brief explanation of the transaction as part of each journal entry.

Recording transactions journal entry grid A list of accounts for Harding Company is given below,followed by a series of transactions.Indicate the accounts that would be debited and credited in recording each transaction by placing the appropriate number (or numbers)in the space provided.

Recording transactions in general journal Enter the following transactions in the two-column journal of Festive Parties,Inc.Include a brief explanation of the transaction as part of each journal entry.

Montauk Oil Co.reports these account balances at December 31,2014 On January 2,2015,Montauk Oil collected $50,000 of its accounts receivable and paid $20,000 of its accounts payable.On January 3,2015,total liabilities are:

The purpose of accrual accounting is to measure the amounts of cash received and paid during the period.

The reason that revenue is recorded by a credit entry to a revenue account is:

Earning revenue increases owners' equity and expenses reduce owners' equity,therefore,revenues are recorded with debit entries and expenses are recorded with credit entries.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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