Question 1

A business renders services to a customer for $16 000 on credit. Which account is debited?

Accepted Answer

A)  Service revenue
B)  Accounts payable
C)  Cash
D)  Accounts receivableE) A) and B)
F) A) and C)

Question 2

A business renders services to a customer for $16 000 on credit. Which account is credited?

Accepted Answer

A)  Accounts receivable
B)  Cash
C)  Accounts payable
D)  Service revenueE) A) and D)
F) C) and D)

Question 3

Which of the following is NOT an example of a source document?

Accepted Answer

A)  Journal
B)  Bank deposit slip
C)  Sales invoice
D)  Purchase invoiceE) A) and B)
F) A) and C)

Question 4

Which of the following accounts increases with a credit?

Accepted Answer

A)  Accounts receivable
B)  Prepaid expenses
C)  Cash
D)  CapitalE) C) and D)
F) All of the above

Question 5

The following entries were made by the accountant of Patel Pastries during its first month of operation. 1. James Patel, the owner, deposited $3 000 in the business new bank account.
2. Patel Pastries paid the first month's rent of $400 in cash.
3. Patel Pastries purchased equipment by borrowing $11 000.
4. Cash sales for the month were $4 500.
5. Patel Pastries purchased cooking supplies for $1 400 cash.
After the accountant posts these entries to the general ledger, how much are total assets?

Accepted Answer

A)  $7 100
B)  $16 700
C)  $18 100
D)  $6 100E) None of the above
F) A) and B)

Question 6

Which of the following statements CORRECTLY describes a trial balance?

Accepted Answer

A)  A trial balance is a list of all accounts with their balances.
B)  A trial balance is the first step in the accounting cycle.
C)  A trial balance is also known as a balance sheet.
D)  A trial balance is also known as the chart of accounts.E) None of the above
F) A) and B)

Question 7

A business renders service to a client and sends out a sales invoice. The amount will be collected from the customer at a later time. Which of the following would be TRUE at the time when the invoice is sent out?

Accepted Answer

A)  Total liabilities will increase.
B)  Owners' equity will decrease.
C)  Profit will increase.
D)  Total assets will decrease.E) None of the above
F) B) and C)

Question 8

An account is the detailed record of the changes in a particular asset, liability, or owners' equity.

Accepted Answer

A) True 
 B)False

Question 9

In a trial balance, total debits are always equal to total credits.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following accounts is an owners' equity account?

Accepted Answer

A)  Accrued liability
B)  Prepaid expense
C)  Capital
D)  Accounts payableE) A) and D)
F) All of the above

Question 11

A business makes a cash payment of $12 000 to an account payable. Which account is debited?

Accepted Answer

A)  Service revenue
B)  Cash
C)  Accounts receivable
D)  Accounts payableE) C) and D)
F) A) and B)

Question 12

The trial balance is one of the three basic financial statements.

Accepted Answer

A) True 
 B)False

Question 13

A journal entry for a $250 payment to purchase supplies was erroneously recorded as a debit to Supplies for $520 and a credit to Cash for $250. Which of the following statements about the trial balance is TRUE?

Accepted Answer

A)  The sum of the debits will exceed the sum of the credits by $250.
B)  The sum of the debits will exceed the sum of the credits by $270.
C)  The sum of the credits will exceed the sum of the debits by $270.
D)  The trial balance will be in balance; the sum of the credits will equal the sum of the debits.E) B) and C)
F) A) and C)

Question 14

For Revenues, the category of account and its normal balance are:

Accepted Answer

A)  Owners' equity and a credit balance.
B)  Liabilities and a credit balance.
C)  Assets and a debit balance.
D)  Owners' equity and a debit balance.E) B) and C)
F) A) and D)

Question 15

Which of the following accounts is an example of a liability?

Accepted Answer

A)  Bills payable
B)  Service revenue
C)  Building
D)  Accounts receivableE) A) and C)
F) B) and C)

Question 16

Which of the following is a method used to detect errors when the two columns of the trial balance are NOT equal?

Accepted Answer

A)  Calculate the difference in the columns, divide the difference between total debits and total credits by 2 and search for a debit shown as a credit, or vice versa.
B)  Calculate the difference in the columns and search the trial balance for a transposition error or a slide error if the difference is evenly divisible by 9.
C)  Calculate the difference in the columns and search for a missing account with that balance.
D)  All of the above are suggested methods for detecting errors.E) A) and B)
F) A) and C)

Question 17

A business collects cash from a customer in payment of accounts receivable. Which account is credited?

Accepted Answer

A)  Accounts receivable
B)  Supplies
C)  Cash
D)  Service revenueE) A) and B)
F) A) and C)

Question 18

A journal entry for a $75 payment for Rent expense was posted as a debit to Salary expense and a credit to Cash. This error will cause which of the following conditions on the trial balance?

Accepted Answer

A)  The sum of the credits will exceed the sum of the debits by $150.
B)  The sum of the debits will exceed the sum of the credits by $75.
C)  The sum of the credits will equal the sum of the debits.
D)  The sum of the debits will exceed the sum of the credits by $150.E) B) and C)
F) All of the above

Question 19

An asset account is increased by a debit.

Accepted Answer

A) True 
 B)False

Question 20

When a business collects cash, the cash account is always debited.

Accepted Answer

A) True 
 B)False

Exam 2: Recording Business Transactions

A business renders services to a customer for $16 000 on credit. Which account is debited?

Correct Answer
verified

An account is the detailed record of the changes in a particular asset, liability, or owners' equity.

Correct Answer
verified

For Revenues, the category of account and its normal balance are:

Correct Answer
verified

A business renders service to a client and sends out a sales invoice. The amount will be collected from the customer at a later time. Which of the following would be TRUE at the time when the invoice is sent out?

Correct Answer
verified

Which of the following is a method used to detect errors when the two columns of the trial balance are NOT equal?

Correct Answer
verified

Correct Answer
verified

Which of the following accounts is an example of a liability?

Correct Answer
verified

A journal entry for a $75 payment for Rent expense was posted as a debit to Salary expense and a credit to Cash. This error will cause which of the following conditions on the trial balance?

Correct Answer
verified

Which of the following is NOT an example of a source document?

Correct Answer
verified

A business makes a cash payment of $12 000 to an account payable. Which account is debited?

Correct Answer
verified

The trial balance is one of the three basic financial statements.

Correct Answer
verified

Which of the following statements CORRECTLY describes a trial balance?

Correct Answer
verified

Which of the following accounts is an owners' equity account?

Correct Answer
verified

An asset account is increased by a debit.

Correct Answer
verified

A business renders services to a customer for $16 000 on credit. Which account is credited?

Correct Answer
verified

A journal entry for a $250 payment to purchase supplies was erroneously recorded as a debit to Supplies for $520 and a credit to Cash for $250. Which of the following statements about the trial balance is TRUE?

Correct Answer
verified

Which of the following accounts increases with a credit?

Correct Answer
verified

In a trial balance, total debits are always equal to total credits.

Correct Answer
verified

When a business collects cash, the cash account is always debited.

Correct Answer
verified

A business collects cash from a customer in payment of accounts receivable. Which account is credited?

Correct Answer
verified

Exam 2: Recording Business Transactions

A business renders services to a customer for $16 000 on credit. Which account is debited?

Correct AnswerverifiedShow Answer

An account is the detailed record of the changes in a particular asset, liability, or owners' equity.

Correct AnswerverifiedShow Answer

For Revenues, the category of account and its normal balance are:

Correct AnswerverifiedShow Answer

A business renders service to a client and sends out a sales invoice. The amount will be collected from the customer at a later time. Which of the following would be TRUE at the time when the invoice is sent out?

Correct AnswerverifiedShow Answer

Which of the following is a method used to detect errors when the two columns of the trial balance are NOT equal?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following accounts is an example of a liability?

Correct AnswerverifiedShow Answer

A journal entry for a $75 payment for Rent expense was posted as a debit to Salary expense and a credit to Cash. This error will cause which of the following conditions on the trial balance?

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of a source document?

Correct AnswerverifiedShow Answer

A business makes a cash payment of $12 000 to an account payable. Which account is debited?

Correct AnswerverifiedShow Answer

The trial balance is one of the three basic financial statements.

Correct AnswerverifiedShow Answer

Which of the following statements CORRECTLY describes a trial balance?

Correct AnswerverifiedShow Answer

Which of the following accounts is an owners' equity account?

Correct AnswerverifiedShow Answer

An asset account is increased by a debit.

Correct AnswerverifiedShow Answer

A business renders services to a customer for $16 000 on credit. Which account is credited?

Correct AnswerverifiedShow Answer

A journal entry for a $250 payment to purchase supplies was erroneously recorded as a debit to Supplies for $520 and a credit to Cash for $250. Which of the following statements about the trial balance is TRUE?

Correct AnswerverifiedShow Answer

Which of the following accounts increases with a credit?

Correct AnswerverifiedShow Answer

In a trial balance, total debits are always equal to total credits.

Correct AnswerverifiedShow Answer

When a business collects cash, the cash account is always debited.

Correct AnswerverifiedShow Answer

A business collects cash from a customer in payment of accounts receivable. Which account is credited?

Correct AnswerverifiedShow Answer

Correct Answer
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