Question 1

Which of the following accounts normally contain a debit balance?

Accepted Answer

A) Asset 
B) Liability 
C) Owners' equity 
D) Revenue 
A) Asset 
B) Liability 
C) Owners' equity 
D) Revenue

Question 2

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 3

The concept of applying the accounting treatment that results in the lowest,most conservative,estimate of net income for the period is called the matching principle.

Accepted Answer

A) True 
 B)False

Question 4

A trial balance includes only the balance sheet accounts;income statement accounts are not included on a trial balance.

Accepted Answer

A) True 
 B)False

Question 5

A trial balance proves that equal amounts of debits and credits were posted to the ledger.

Accepted Answer

A) True 
 B)False

Question 6

Montauk Oil Co.reports these account balances at December 31,2017   On January 2,2018,Montauk Oil collected $50,000 of its accounts receivable and paid $20,000 of its accounts payable.On January 3,2018,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 7

Decreases to owners' equity accounts are recorded using debits.

Accepted Answer

A) True 
 B)False

Question 8

Liability accounts should only be debited and never credited.

Accepted Answer

A) True 
 B)False

Question 9

[The following information applies to the questions displayed below.]
Wilson Trucking,Inc.reports these account balances at January 1,2018 (shown in alphabetical order):
   On January 5,Wilson Trucking collected $175,000 of its accounts receivable,paid $150,000 on its accounts payable,and paid $11,000 on its note payable.
-On January 6,2018,total liabilities are:

Accepted Answer

A) $901,000. 
B) $579,000. 
C) $1,399,000. 
D) $1,721,000. 
A) $901,000. 
B) $579,000. 
C) $1,399,000. 
D) $1,721,000.

Question 10

Davis,Inc. ,a music group,entertained at a black-tie dinner dance on April 26,and collected the fee in full at the end of the evening.This transaction:

Accepted Answer

A) Causes an increase in assets and revenue,as well as an increase in owners' equity. 
B) Is recorded by debiting Cash and crediting the Retained Earnings account. 
C) Causes an increase in assets and a decrease in owners' equity. 
D) Violates the matching principle unless any expenses associated with this cash receipt are paid prior to recording the revenue. 
A) Causes an increase in assets and revenue,as well as an increase in owners' equity. 
B) Is recorded by debiting Cash and crediting the Retained Earnings account. 
C) Causes an increase in assets and a decrease in owners' equity. 
D) Violates the matching principle unless any expenses associated with this cash receipt are paid prior to recording the revenue.

Question 11

A journal entry that records revenue must include:

Accepted Answer

A) A debit to Cash. 
B) A credit to a revenue account. 
C) A credit to the owners' equity account. 
D) A debit to the owners' equity account. 
A) A debit to Cash. 
B) A credit to a revenue account. 
C) A credit to the owners' equity account. 
D) A debit to the owners' equity account.

Question 12

All liability accounts normally have a credit balance.

Accepted Answer

A) True 
 B)False

Question 13

[The following information applies to the questions displayed below.]
Ceramic Products,Inc.reports these account balances at January 1,2018 (shown in alphabetical order):
   On January 5,Ceramic Products collected $12,000 of its accounts receivable and paid $11,000 on its note payable.
-In a trial balance prepared for Ceramic Products on January 1,2018,the total of the credit column is:

Accepted Answer

A) $182,000. 
B) $196000. 
C) $166,000. 
D) $286,000. 
A) $182,000. 
B) $196000. 
C) $166,000. 
D) $286,000.

Question 14

[The following information applies to the questions displayed below.]
The following transactions occurred during May,the first month of operations for Hunter Products,Inc.:
* Issued 50,000 shares of capital stock to the owners of the corporation in exchange for $600,000 cash.
* Purchased a piece of land for $400,000,making a $150,000 cash down payment and signing a note payable for the balance.
* Made a $60,000 cash payment on the note payable from the purchase of land.
* Purchased equipment on credit from BBW,Inc.for $63,000.
-What are total assets of Hunter Products at the end of May?

Accepted Answer

A) $913,000 
B) $790,000 
C) $853,000 
D) $916,000 
A) $913,000 
B) $790,000 
C) $853,000 
D) $916,000

Question 15

Preparing a journal entry in proper form involves all the following except:

Accepted Answer

A) Listing all accounts debited before any credits. 
B) Computing the balances in accounts involved in the transaction. 
C) Indicating the date of the transaction. 
D) Providing a brief written explanation of the transaction. 
A) Listing all accounts debited before any credits. 
B) Computing the balances in accounts involved in the transaction. 
C) Indicating the date of the transaction. 
D) Providing a brief written explanation of the transaction.

Question 16

In the general ledger,a separate "account" is maintained for each:

Accepted Answer

A) Type of asset and liability and for each element of owners' equity. 
B) Business transaction. 
C) Business day. 
D) Journal entry. 
A) Type of asset and liability and for each element of owners' equity. 
B) Business transaction. 
C) Business day. 
D) Journal entry.

Question 17

Journalize and post basic transactions
Geller Landscaping was organized on April 5 when the corporation issued 20,000 shares of capital stock to Larry Geller in exchange for $60,000 cash.
* On April 8,the business acquired gardening equipment by paying cash of $26,000 and signing a $20,000 note payable,due in four monthly installments of $5,000 each,beginning on April 15.
* On April 15,Larry Geller made the first payment on the note payable by writing a check from the business bank account.
Instructions: Journalize these three transactions and post to the ledger accounts.

Accepted Answer

The answer of Journalize and post basic transactions
Geller Landscaping was...

Question 18

[The following information applies to the questions displayed below.]
The following transactions occurred during May,the first month of operations for Hunter Products,Inc.:
* Issued 50,000 shares of capital stock to the owners of the corporation in exchange for $600,000 cash.
* Purchased a piece of land for $400,000,making a $150,000 cash down payment and signing a note payable for the balance.
* Made a $60,000 cash payment on the note payable from the purchase of land.
* Purchased equipment on credit from BBW,Inc.for $63,000.
-What is the balance in the Cash account at the end of May?

Accepted Answer

A) $210,000 
B) $390,000 
C) $600,000 
D) $810,000 
A) $210,000 
B) $390,000 
C) $600,000 
D) $810,000

Question 19

The realization principle indicates that revenue usually should be recognized and recorded in the accounting records:

Accepted Answer

A) When goods are sold or services are rendered to customers. 
B) When cash is collected from customers. 
C) At the end of the accounting period. 
D) Only when the revenue can be matched by an equal dollar amount of expenses. 
A) When goods are sold or services are rendered to customers. 
B) When cash is collected from customers. 
C) At the end of the accounting period. 
D) Only when the revenue can be matched by an equal dollar amount of expenses.

Question 20

In February of each year,the Carlton Hotel holds a very popular wine tasting event.Tickets must be ordered and paid for in advance,and are typically sold out by November of the preceding year.The realization principle indicates that the revenue from these ticket sales should be recognized in the period in which the:

Accepted Answer

A) Order is placed. 
B) Wine tasting event is held. 
C) Payments are received. 
D) Expenses associated with the wine tasting are paid in full. 
A) Order is placed. 
B) Wine tasting event is held. 
C) Payments are received. 
D) Expenses associated with the wine tasting are paid in full.

Exam 3: The Accounting Cycle: Capturing Economic Events

Which of the following accounts normally contain a debit balance?

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

The concept of applying the accounting treatment that results in the lowest,most conservative,estimate of net income for the period is called the matching principle.

A trial balance includes only the balance sheet accounts;income statement accounts are not included on a trial balance.

A trial balance proves that equal amounts of debits and credits were posted to the ledger.

Montauk Oil Co.reports these account balances at December 31,2017 On January 2,2018,Montauk Oil collected $50,000 of its accounts receivable and paid $20,000 of its accounts payable.On January 3,2018,total liabilities are:

Decreases to owners' equity accounts are recorded using debits.

Liability accounts should only be debited and never credited.

Davis,Inc. ,a music group,entertained at a black-tie dinner dance on April 26,and collected the fee in full at the end of the evening.This transaction:

A journal entry that records revenue must include:

All liability accounts normally have a credit balance.

Preparing a journal entry in proper form involves all the following except:

In the general ledger,a separate "account" is maintained for each:

The realization principle indicates that revenue usually should be recognized and recorded in the accounting records:

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

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

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters