Question 1

Closing entries move all the yearly data for revenues, expenses, and dividends into the Retained Earnings account.

Accepted Answer

A) True 
 B)False

Question 2

A business's chart of accounts is prepared to verify the equality of debits and credits.

Accepted Answer

A) True 
 B)False

Question 3

Calculating the debt to assets ratio measures how efficiently a company is using its assets in the normal scope of business.

Accepted Answer

A) True 
 B)False

Question 4

A transaction recorded as a debit to Cash and a credit to Unearned Revenue.

Accepted Answer

(I) (I) (N) (N) (N) (N) (I)
Ex

Question 5

Describe the transaction shown in the following journal entry.

Accepted Answer

A) Paid cash to a customer who requested a refund. 
B) Received cash in advance for work to be performed in future months. 
C) Recorded adjusting entry for work completed. 
D) Received cash for services completeD.The debit to cash and credit to unearned revenue would increase both of these accounts. That would be the correct journal entry to record receiving cash in advance for work to be performed in the future. 
A) Paid cash to a customer who requested a refund. 
B) Received cash in advance for work to be performed in future months. 
C) Recorded adjusting entry for work completed. 
D) Received cash for services completeD.The debit to cash and credit to unearned revenue would increase both of these accounts. That would be the correct journal entry to record receiving cash in advance for work to be performed in the future.

Question 6

Ashley Dodd had the following transactions for Dodd Business Services for 2013.
1) Provided services on account, $10,000.
2) Purchased $2,500 of office supplies on account.
3) At the end of the year, an adjusting entry was prepared for the supplies that had been used. The amount of office supplies still on hand was $250.
Required:
a) Show the effect of the above three events on the accounting equation. (You need to fill in the appropriate headings).   b) Set up the appropriate T-accounts and post each of the above transactions.
c) What is the amount of total assets at the end of 2011? What is the amount of net income for 2013?

Accepted Answer

a) Accounting Equation @#IMG-DLM& b) @#IMG-DLM& c)

Question 7

Which of the following statements is true?

Accepted Answer

A) Adjusting entries are recorded after the closing entries have been recorded. 
B) The balance in the retained earnings account in the trial balance will equal the retained earnings balance on the balance sheet after closing entries have been posted to the general ledger. 
C) Debits are equal to credits only after closing entries have been made. 
D) Equal totals in a trial balance guarantees that no errors were made in the recording process. 
A) Adjusting entries are recorded after the closing entries have been recorded. 
B) The balance in the retained earnings account in the trial balance will equal the retained earnings balance on the balance sheet after closing entries have been posted to the general ledger. 
C) Debits are equal to credits only after closing entries have been made. 
D) Equal totals in a trial balance guarantees that no errors were made in the recording process.

Question 8

The Billetts Company purchased $1,000 of supplies on account. After this transaction has been recorded in T-accounts, the $1,000 would appear

Accepted Answer

A) on the left side of the Supplies account. 
B) on the right side of the Supplies account. 
C) on the left side of the Accounts Payable account. 
D) on the right side of the Cash account. 
A) on the left side of the Supplies account. 
B) on the right side of the Supplies account. 
C) on the left side of the Accounts Payable account. 
D) on the right side of the Cash account.

Question 9

The closing entry for the Dividends account would involve which of the following?

Accepted Answer

A) A debit to Retained Earnings 
B) A debit to Dividends 
C) A credit to Common Stock 
D) A credit to Cash 
A) A debit to Retained Earnings 
B) A debit to Dividends 
C) A credit to Common Stock 
D) A credit to Cash

Question 10

At the end of 2013, Vortex Company's adjusted trial balance showed a zero balance in retained earnings. What is the most likely explanation for this?

Accepted Answer

A) Vortex Company reported zero net income in 2013. 
B) 2013 was Vortex Company's first year in business. 
C) Vortex Company's trial balance will be out of balance until closing entries are made. 
D) An error must have been made in preparing Vortex's trial balance. 
A) Vortex Company reported zero net income in 2013. 
B) 2013 was Vortex Company's first year in business. 
C) Vortex Company's trial balance will be out of balance until closing entries are made. 
D) An error must have been made in preparing Vortex's trial balance.

Question 11

On August 1, 2013, Barnabas Company issued a $10,000 6%, 1-year note to Citizens Bank. Which of the following entries reflects the end of the year adjustment to record the expense incurred?

Accepted Answer

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

Question 12

The Davis Clinic provides dental care services. During 2013, the clinic entered into the following transactions:
1) On October 1, collected $3,000 in advance of services being provided. The services are to be performed equally over the next 12 months.
2) On April 1, purchased insurance costing $18,000. The insurance policy would cover the next 12 months.
Required:
a) Draw T-accounts and post the year end adjusting entries to appropriate T-accounts.
b) Analyze how the year end adjusting entries affect the Financial Statements on the horizontal financial model below.

Accepted Answer

The answer of The Davis Clinic provides dental care services....

Question 13

For each of the following unrelated transactions, list the accounts that will be debited and credited.
a) Borrowed cash from the bank.
b) Provided services on account.
c) Paid cash for office supplies.
d) Collected cash due on accounts receivable.
e) Paid cash dividends to stockholders.

Accepted Answer

The answer of For each of the following unrelated transactions,...

Question 14

What effect do credits have on asset accounts? On equity accounts?

Accepted Answer

Credits decrease asset account

Question 15

Indicate whether each of the following statements is true or false.
_____ a) A debit may increase a liability.
_____ b) Closing a revenue account includes a credit to Retained Earnings.
_____ c) Equity accounts are decreased with a debit.
_____ d) Asset accounts are decreased with a credit.
_____ e) Debits to the cash account are reported as cash outflows on the statement of cash flows.

Accepted Answer

a) False b) True c) True d) True e) Fals

Question 16

Debits decrease asset accounts.

Accepted Answer

A) True 
 B)False

Question 17

The general journal is a list of a business's accounts and their account numbers.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following transactions would immediately 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) Paid cash on accounts payable. 
D) Incurred expenses on account. 
A) Received cash from customers for goods sold to them on account last month. 
B) Borrowed cash from a local bank. 
C) Paid cash on accounts payable. 
D) Incurred expenses on account.

Question 19

Fenwick Company recorded $500 of accrued salaries expense. Which of the following shows the proper entry using T-accounts?

Accepted Answer

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

Question 20

A transaction recorded as a debit to Accounts Receivable and a credit to a revenue account.

Accepted Answer

(I) (N) (I) (I) (N) (I) (N)
Ex

Closing entries move all the yearly data for revenues, expenses, and dividends into the Retained Earnings account.

A business's chart of accounts is prepared to verify the equality of debits and credits.

Calculating the debt to assets ratio measures how efficiently a company is using its assets in the normal scope of business.

A transaction recorded as a debit to Cash and a credit to Unearned Revenue.

Describe the transaction shown in the following journal entry.

Which of the following statements is true?

The Billetts Company purchased $1,000 of supplies on account. After this transaction has been recorded in T-accounts, the $1,000 would appear

The closing entry for the Dividends account would involve which of the following?

At the end of 2013, Vortex Company's adjusted trial balance showed a zero balance in retained earnings. What is the most likely explanation for this?

On August 1, 2013, Barnabas Company issued a $10,000 6%, 1-year note to Citizens Bank. Which of the following entries reflects the end of the year adjustment to record the expense incurred?

For each of the following unrelated transactions, list the accounts that will be debited and credited. a) Borrowed cash from the bank. b) Provided services on account. c) Paid cash for office supplies. d) Collected cash due on accounts receivable. e) Paid cash dividends to stockholders.

What effect do credits have on asset accounts? On equity accounts?

Debits decrease asset accounts.

The general journal is a list of a business's accounts and their account numbers.

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

Fenwick Company recorded $500 of accrued salaries expense. Which of the following shows the proper entry using T-accounts?

A transaction recorded as a debit to Accounts Receivable and a credit to a revenue account.

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 Available Online in the Connect Library

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Exam 3: The Double-Entry Accounting System

Closing entries move all the yearly data for revenues, expenses, and dividends into the Retained Earnings account.

A business's chart of accounts is prepared to verify the equality of debits and credits.

Calculating the debt to assets ratio measures how efficiently a company is using its assets in the normal scope of business.

A transaction recorded as a debit to Cash and a credit to Unearned Revenue.

Describe the transaction shown in the following journal entry.

Which of the following statements is true?

The Billetts Company purchased $1,000 of supplies on account. After this transaction has been recorded in T-accounts, the $1,000 would appear

The closing entry for the Dividends account would involve which of the following?

At the end of 2013, Vortex Company's adjusted trial balance showed a zero balance in retained earnings. What is the most likely explanation for this?

On August 1, 2013, Barnabas Company issued a $10,000 6%, 1-year note to Citizens Bank. Which of the following entries reflects the end of the year adjustment to record the expense incurred?

For each of the following unrelated transactions, list the accounts that will be debited and credited. a) Borrowed cash from the bank. b) Provided services on account. c) Paid cash for office supplies. d) Collected cash due on accounts receivable. e) Paid cash dividends to stockholders.

What effect do credits have on asset accounts? On equity accounts?

Debits decrease asset accounts.

The general journal is a list of a business's accounts and their account numbers.

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

Fenwick Company recorded $500 of accrued salaries expense. Which of the following shows the proper entry using T-accounts?

A transaction recorded as a debit to Accounts Receivable and a credit to a revenue account.

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 Available Online in the Connect Library

Filters