Question 1

A journal entry that affects no more than two accounts is called a compound entry.

Accepted Answer

A) True 
 B)False

Question 2

Neither U.S. GAAP nor IFRS require the use of accrual basis accounting.

Accepted Answer

A) True 
 B)False

Question 3

A company's formal promise to pay (in the form of a promissory note) a future amount is a(n):

Accepted Answer

A) Unearned revenue. 
B) Prepaid expense. 
C) Credit account. 
D) Note payable. 
E) Account receivable. 
A) Unearned revenue. 
B) Prepaid expense. 
C) Credit account. 
D) Note payable. 
E) Account receivable.

Question 4

Items such as sales tickets, bank statements, checks, and purchase orders are examples of a business's source documents.

Accepted Answer

A) True 
 B)False

Question 5

Asset accounts are normally decreased by debits.

Accepted Answer

A) True 
 B)False

Question 6

Larry Matt, Inc. completed these transactions during December of the current year:   Prepare general journal entries to record these transactions.

Accepted Answer

The answer of Larry Matt, Inc. completed these transactions during...

Question 7

The process of transferring general journal entry information to the ledger is called:

Accepted Answer

A) Double-entry accounting. 
B) Posting. 
C) Balancing an account. 
D) Journalizing. 
E) Not required unless debits do not equal credits. 
A) Double-entry accounting. 
B) Posting. 
C) Balancing an account. 
D) Journalizing. 
E) Not required unless debits do not equal credits.

Question 8

At year-end, a trial balance showed total credits exceed total debits by $4,950. This difference could have been caused by:

Accepted Answer

A) An error in the general journal where a $4,950 increase in Accounts Receivable was recorded as an increase in Cash. 
B) A net income of $4,950. 
C) The balance of $49,500 in Accounts Payable being entered in the trial balance as $4,950. 
D) The balance of $5,500 in the Office Equipment account being entered on the trial balance as a debit of $550. 
E) An error in the general journal where a $4,950 increase in Accounts Payable was recorded as a decrease in Accounts Payable. 
A) An error in the general journal where a $4,950 increase in Accounts Receivable was recorded as an increase in Cash. 
B) A net income of $4,950. 
C) The balance of $49,500 in Accounts Payable being entered in the trial balance as $4,950. 
D) The balance of $5,500 in the Office Equipment account being entered on the trial balance as a debit of $550. 
E) An error in the general journal where a $4,950 increase in Accounts Payable was recorded as a decrease in Accounts Payable.

Question 9

On a trial balance, if the Debit and Credit column totals are equal, then:

Accepted Answer

A) All transactions have been recorded correctly. 
B) All entries from the journal have been posted to the ledger correctly. 
C) All ledger account balances are correct. 
D) Equal debits and credits have been recorded for transactions. 
E) The balance sheet would be correct. 
A) All transactions have been recorded correctly. 
B) All entries from the journal have been posted to the ledger correctly. 
C) All ledger account balances are correct. 
D) Equal debits and credits have been recorded for transactions. 
E) The balance sheet would be correct.

Question 10

Conner Piper began business as Conner's Bookkeeping, Inc. on May 1. Prepare a trial balance, as of May 31 using the account information provided below:

Accepted Answer

The answer of Conner Piper began business as Conner's Bookkeeping,...

Question 11

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of On December 3, the ABBJ Company paid...

Question 12

Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability (L), or equity (SE) by placing initials (R,E,A,L or SE) in the blanks.
____ 1. Salary Expense
____ 2. Cash
____ 3. Equipment
____ 4. Common Stock
____ 5. Fees Revenue
____ 6. Accounts Receivable
____ 7. Accounts Payable
____ 8. Dividends
____ 9. Supplies
____ 10. Unearned Revenue
____ 11. Prepaid Insurance
____ 12. Office Furniture

Accepted Answer

1. E; 2. A; 3. A; 4.

Question 13

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

Accepted Answer

A) True 
 B)False

Question 14

Geraldine Parker, the owner of Gi Gi's Dance Studio, Inc., started the business by investing $10,000 cash and donating a building worth $20,000. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Accepted Answer

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

Question 15

Credits always increase account balances.

Accepted Answer

A) True 
 B)False

Question 16

Jason Hope decided to open a hotel, set up as a corporation, in his hometown. Prepare journal entries to record the following transactions. Hope uses the accounts Room Rental Revenue and Event Revenue. All expenses for special events are recorded as Event Expense.

Accepted Answer

The answer of Jason Hope decided to open a hotel,...

Question 17

J. Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

Accepted Answer

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

Question 18

For each of the accounts in the following table (1) identify the type of account as an asset, liability, equity, revenue, or expense, and (2) identify the normal balance of the account.

Accepted Answer

The answer of For each of the accounts in the...

Question 19

A bookkeeper has debited an account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction?

Accepted Answer

A) Credit another asset account for $1,500. 
B) Credit another liability account for $1,500. 
C) Credit an expense account for $1,500. 
D) Credit the common stock account for $1,500. 
E) Debit another asset account for $1,500. 
A) Credit another asset account for $1,500. 
B) Credit another liability account for $1,500. 
C) Credit an expense account for $1,500. 
D) Credit the common stock account for $1,500. 
E) Debit another asset account for $1,500.

Question 20

___________________ are promises of payment from customers to sellers.

Accepted Answer

The answer of ___________________ are promises of payment from customers...

A journal entry that affects no more than two accounts is called a compound entry.

Neither U.S. GAAP nor IFRS require the use of accrual basis accounting.

A company's formal promise to pay (in the form of a promissory note) a future amount is a(n):

Items such as sales tickets, bank statements, checks, and purchase orders are examples of a business's source documents.

Asset accounts are normally decreased by debits.

Larry Matt, Inc. completed these transactions during December of the current year: Prepare general journal entries to record these transactions.

The process of transferring general journal entry information to the ledger is called:

At year-end, a trial balance showed total credits exceed total debits by $4,950. This difference could have been caused by:

On a trial balance, if the Debit and Credit column totals are equal, then:

Conner Piper began business as Conner's Bookkeeping, Inc. on May 1. Prepare a trial balance, as of May 31 using the account information provided below:

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

Geraldine Parker, the owner of Gi Gi's Dance Studio, Inc., started the business by investing $10,000 cash and donating a building worth $20,000. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Credits always increase account balances.

Jason Hope decided to open a hotel, set up as a corporation, in his hometown. Prepare journal entries to record the following transactions. Hope uses the accounts Room Rental Revenue and Event Revenue. All expenses for special events are recorded as Event Expense.

J. Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

For each of the accounts in the following table (1) identify the type of account as an asset, liability, equity, revenue, or expense, and (2) identify the normal balance of the account.

A bookkeeper has debited an account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction?

___________________ are promises of payment from customers to sellers.

Introducing Financial Accounting

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Exam 2: Accounting System and Financial Statements

A journal entry that affects no more than two accounts is called a compound entry.

Neither U.S. GAAP nor IFRS require the use of accrual basis accounting.

A company's formal promise to pay (in the form of a promissory note) a future amount is a(n):

Items such as sales tickets, bank statements, checks, and purchase orders are examples of a business's source documents.

Asset accounts are normally decreased by debits.

Larry Matt, Inc. completed these transactions during December of the current year: Prepare general journal entries to record these transactions.

The process of transferring general journal entry information to the ledger is called:

At year-end, a trial balance showed total credits exceed total debits by $4,950. This difference could have been caused by:

On a trial balance, if the Debit and Credit column totals are equal, then:

Conner Piper began business as Conner's Bookkeeping, Inc. on May 1. Prepare a trial balance, as of May 31 using the account information provided below:

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

Geraldine Parker, the owner of Gi Gi's Dance Studio, Inc., started the business by investing $10,000 cash and donating a building worth $20,000. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Credits always increase account balances.

Jason Hope decided to open a hotel, set up as a corporation, in his hometown. Prepare journal entries to record the following transactions. Hope uses the accounts Room Rental Revenue and Event Revenue. All expenses for special events are recorded as Event Expense.

J. Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

For each of the accounts in the following table (1) identify the type of account as an asset, liability, equity, revenue, or expense, and (2) identify the normal balance of the account.

A bookkeeper has debited an account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction?

___________________ are promises of payment from customers to sellers.

Introducing Financial Accounting

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters