Question 1

A debit entry always increases an account.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is not true:

Accepted Answer

A)  Accounts receivable are held by a seller. 
B)  Accounts receivable arise from credit sales. 
C)  Accounts receivable are increased by customer payments. 
D)  Accounts receivable are classified as assets. 
E)  Accounts receivable are increased by billings to customers. 
A)  Accounts receivable are held by a seller. 
B)  Accounts receivable arise from credit sales. 
C)  Accounts receivable are increased by customer payments. 
D)  Accounts receivable are classified as assets. 
E)  Accounts receivable are increased by billings to customers.

Question 3

Identify the account below that is classified as an asset in a company's chart of accounts:

Accepted Answer

A)  Accounts Receivable 
B)  Accounts Payable 
C)  Common Stock 
D)  Unearned Revenue 
E)  Service Revenue 
A)  Accounts Receivable 
B)  Accounts Payable 
C)  Common Stock 
D)  Unearned Revenue 
E)  Service Revenue

Question 4

Miley Block is a building consultant. Shown below are (a) several accounts in her ledger with each account preceded by an identification number, and (b) several transactions completed by Block. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.
 $\begin{array}{llll}
\text { 1. } & \text { Accounts Payable } & 7 . & \text { Telephone Expense } \
\text { 2. } & \text { Accounts Receivable } & 8 . & \text { Unearned Revenue } \
\text { 3. } & \text { Cash } & 9 . & \text { Common Stock } \
\text { 4. } & \text { Consulting Fees Earned } & \text { 10. } & \text { Dividends } \
\text { 5. } & \text { Office Supplies } & \text { 11. } & \text { Insurance Expense } \
6 . & \text { Office Supplies Expense } & 12 . & \text { Prepaid Insurance }
\end{array}$

Accepted Answer

The answer of Miley Block is a building consultant. Shown...

Question 5

Which of the following is NOT an asset account:

Accepted Answer

A)  Cash 
B)  Land 
C)  Services Revenue 
D)  Buildings 
E)  Equipment 
A)  Cash 
B)  Land 
C)  Services Revenue 
D)  Buildings 
E)  Equipment

Question 6

Sharp Services provided $800 of consulting work and $100 of design work to the same client. It billed the client for the total amount and is expecting to collect from the customer next month. Which of the following general journal entries did Sharp Services make to record the billing of the customer?

Accepted Answer

A)  $\begin{array}{|l|r|l|}
\hline \text { Desion Revenue } & 100 & \
\hline \text { Consulting Revenue } & 800 & \
\hline \text { Accounts Receivable } & & 900\
\hline
\end{array}$ 
B)  $\begin{array}{|l|l|l|}
\hline \text { Accounts Payable } & 800 & \
\hline \text { Design Revenue } & & 100 \
\hline \text { Consulting Revenue } & & 800 \
\hline
\end{array}$ 
C)  $\begin{array}{|l|r|l|}
\hline \text { Desion Revenue } & 100 & \
\hline \text { Consulting Revenue } & 800 & \
\hline \text { Accounts Payable } & &900 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Unearned Revenue } & 900 & \
\hline \text { Consulting Revenue } & & 800 \
\hline \text { Design Revenue } & & 100 \
\hline
\end{array}$ 
E)  $\begin{array}{|l|l|l|}
\hline \text { Accounts Receivable } & 900 & \
\hline \text { Consulting Revenue } & & 800 \
\hline \text { Design Revenue } & & 100 \
\hline
\end{array}$ 
A)  $\begin{array}{|l|r|l|}
\hline \text { Desion Revenue } & 100 & \
\hline \text { Consulting Revenue } & 800 & \
\hline \text { Accounts Receivable } & & 900\
\hline
\end{array}$ 
B)  $\begin{array}{|l|l|l|}
\hline \text { Accounts Payable } & 800 & \
\hline \text { Design Revenue } & & 100 \
\hline \text { Consulting Revenue } & & 800 \
\hline
\end{array}$ 
C)  $\begin{array}{|l|r|l|}
\hline \text { Desion Revenue } & 100 & \
\hline \text { Consulting Revenue } & 800 & \
\hline \text { Accounts Payable } & &900 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Unearned Revenue } & 900 & \
\hline \text { Consulting Revenue } & & 800 \
\hline \text { Design Revenue } & & 100 \
\hline
\end{array}$ 
E)  $\begin{array}{|l|l|l|}
\hline \text { Accounts Receivable } & 900 & \
\hline \text { Consulting Revenue } & & 800 \
\hline \text { Design Revenue } & & 100 \
\hline
\end{array}$

Question 7

Russell Co. received a $400 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Russell Co. make to record the receipt of the bill?

Accepted Answer

A)  $\begin{array}{|l|l|l|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Accounts Receivable } & & 400 \
\hline
\end{array}$ 
B)  $\begin{array}{|l|r|}
\hline \text { Cash } & 400 \
\hline \text { Utilities Expense } & 400\\hline 
\end{array}$ 
C)  $\begin{array}{|l|r|l|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Accounts Payable } & & 400 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Accounts Payable } & 400 & \
\hline \text { Utilities Expense } && 400 \
\hline
\end{array}$ 
E)  No journal entry is required. 
A)  $\begin{array}{|l|l|l|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Accounts Receivable } & & 400 \
\hline
\end{array}$ 
B)  $\begin{array}{|l|r|}
\hline \text { Cash } & 400 \
\hline \text { Utilities Expense } & 400\\hline 
\end{array}$ 
C)  $\begin{array}{|l|r|l|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Accounts Payable } & & 400 \
\hline
\end{array}$ 
D)  $\begin{array}{|l|r|r|}
\hline \text { Accounts Payable } & 400 & \
\hline \text { Utilities Expense } && 400 \
\hline
\end{array}$ 
E)  No journal entry is required.

Question 8

Revenues and expenses are two categories of ________ accounts.

Accepted Answer

The answer of Revenues and expenses are two categories of...

Question 9

In a seller's accounting records, ________ are promises of payment waiting to be received from customers.

Accepted Answer

The answer of In a seller's accounting records, ________ are...

Question 10

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

Accepted Answer

The answer of Larry Matt completed these transactions during December...

Question 11

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

Accepted Answer

A) True 
 B)False

Question 12

A ________ is a list of all the accounts used by a company and their identification codes but does not contain the balances.

Accepted Answer

The answer of A ________ is a list of all...

Question 13

Unearned revenues refer to a(n):

Accepted Answer

A)  Asset that will be used over time. 
B)  Expense incurred because a customer has paid in advance. 
C)  Liability that is settled in the future when a company delivers its products or services. 
D)  Increase in assets as a result of delivering products or services to a customer. 
E)  Decrease in an asset. 
A)  Asset that will be used over time. 
B)  Expense incurred because a customer has paid in advance. 
C)  Liability that is settled in the future when a company delivers its products or services. 
D)  Increase in assets as a result of delivering products or services to a customer. 
E)  Decrease in an asset.

Question 14

Jackson Brown Footwear had total liabilities of $127.5 million and total assets of $375 million. Its debt ratio was ________.

Accepted Answer

34%
Explanation: Debt Ratio =

Question 15

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 16

A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):

Accepted Answer

A)  Account. 
B)  Trial balance. 
C)  Journal. 
D)  T-account. 
E)  Balance column account. 
A)  Account. 
B)  Trial balance. 
C)  Journal. 
D)  T-account. 
E)  Balance column account.

Question 17

An asset created by prepayment of an insurance premium is:

Accepted Answer

A)  Recorded as a debit to Unearned Revenue. 
B)  Recorded as a debit to Prepaid Insurance. 
C)  Recorded as a credit to Unearned Revenue. 
D)  Recorded as a credit to Prepaid Insurance. 
E)  Not recorded in the accounting records until the insurance period expires. 
A)  Recorded as a debit to Unearned Revenue. 
B)  Recorded as a debit to Prepaid Insurance. 
C)  Recorded as a credit to Unearned Revenue. 
D)  Recorded as a credit to Prepaid Insurance. 
E)  Not recorded in the accounting records until the insurance period expires.

Question 18

Identify the account below that is classified as a liability in a company's chart of accounts:

Accepted Answer

A)  Cash 
B)  Unearned Revenue 
C)  Salaries Expense 
D)  Accounts Receivable 
E)  Supplies 
A)  Cash 
B)  Unearned Revenue 
C)  Salaries Expense 
D)  Accounts Receivable 
E)  Supplies

Question 19

All of the following statements accurately describe the debt ratio except.

Accepted Answer

A)  It is of use to both internal and external users of accounting information. 
B)  A relatively low ratio signifies lower risk. 
C)  The ratio is computed by dividing total liabilities by total assets. 
D)  Higher financial leverage means greater risk. 
E)  The ratio is computed by dividing total equity by total liabilities. 
A)  It is of use to both internal and external users of accounting information. 
B)  A relatively low ratio signifies lower risk. 
C)  The ratio is computed by dividing total liabilities by total assets. 
D)  Higher financial leverage means greater risk. 
E)  The ratio is computed by dividing total equity by total liabilities.

Question 20

The record of all accounts and their balances used by a business is called a:

Accepted Answer

A)  Journal. 
B)  Chart of accounts. 
C)  General Journal. 
D)  Balance column journal. 
E)  Ledger (or General Ledger). 
A)  Journal. 
B)  Chart of accounts. 
C)  General Journal. 
D)  Balance column journal. 
E)  Ledger (or General Ledger).

A debit entry always increases an account.

Which of the following statements is not true:

Identify the account below that is classified as an asset in a company's chart of accounts:

Which of the following is NOT an asset account:

Russell Co. received a $400 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Russell Co. make to record the receipt of the bill?

Revenues and expenses are two categories of ________ accounts.

In a seller's accounting records, ________ are promises of payment waiting to be received from customers.

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

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

A ________ is a list of all the accounts used by a company and their identification codes but does not contain the balances.

Unearned revenues refer to a(n):

Jackson Brown Footwear had total liabilities of $127.5 million and total assets of $375 million. Its debt ratio was ________.

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

A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):

An asset created by prepayment of an insurance premium is:

Identify the account below that is classified as a liability in a company's chart of accounts:

All of the following statements accurately describe the debt ratio except.

The record of all accounts and their balances used by a business is called a:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

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Exam 16: Accounting for Business Transactions

A debit entry always increases an account.

Which of the following statements is not true:

Identify the account below that is classified as an asset in a company's chart of accounts:

Which of the following is NOT an asset account:

Russell Co. received a $400 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Russell Co. make to record the receipt of the bill?

Revenues and expenses are two categories of ________ accounts.

In a seller's accounting records, ________ are promises of payment waiting to be received from customers.

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

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

A ________ is a list of all the accounts used by a company and their identification codes but does not contain the balances.

Unearned revenues refer to a(n):

Jackson Brown Footwear had total liabilities of $127.5 million and total assets of $375 million. Its debt ratio was ________.

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

A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):

An asset created by prepayment of an insurance premium is:

Identify the account below that is classified as a liability in a company's chart of accounts:

All of the following statements accurately describe the debt ratio except.

The record of all accounts and their balances used by a business is called a:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

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