Question 1

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Accepted Answer

A) True 
 B)False

Question 2

If the common stock account had a $10,000 credit balance at the beginning of the period,and during the period,stockholders invest an additional $5,000,the balance in the common stock account listed on the trial balance will be equal to a debit balance of $5,000.

Accepted Answer

A) True 
 B)False

Question 3

A bookkeeper has debited an asset 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 a revenue account for $1,500.
D)   Credit the common stock account for $1,500.
E)   Debit another asset account for $1,500.F) C) and E)
G) A) and B)

Question 4

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

\[\begin{array} { l }
112 / 3...

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Mary Martin,the sole stockholder of Martin Consulting,started the business by investing $40,000 cash.Identify the general journal entry below that Martin Consulting will make to record the transaction.

Accepted Answer

A)     Cash 40,000 Common Stock 40,000\begin{array} { | l | r | l | } \hline 	ext { Cash } & 40,000 & \\hline 	ext { Common Stock } & & 40,000 \\hline\end{array} Cash  Common Stock ​40,000​40,000​​ 
B)     Common Stock 40,000 Cash 40,000\begin{array} { | l | r | r | } \hline 	ext { Common Stock } & 40,000 & \\hline 	ext { Cash } & & 40,000 \\hline\end{array} Common Stock  Cash ​40,000​40,000​​ 
C)     Investments 40,000 Cash 40,000\begin{array} { | l | r | r | } \hline 	ext { Investments } & 40,000 & \\hline 	ext { Cash } & & 40,000 \\hline\end{array} Investments  Cash ​40,000​40,000​​ 
D)     Investments 40,000 Common Stock 40,000\begin{array} { | l | r | l | } \hline 	ext { Investments } & 40,000 & \\hline 	ext { Common Stock } & & 40,000 \\hline\end{array} Investments  Common Stock ​40,000​40,000​​ 
E)     Cash 40,000 Increased Equity 40,000\begin{array} { | l | r | l | } \hline 	ext { Cash } & 40,000 & \\hline 	ext { Increased Equity } & & 40,000 \\hline\end{array} Cash  Increased Equity ​40,000​40,000​​F) None of the above
G) A) and E)

Question 7

Match the following terms with the appropriate definition.
-Trial balance

Accepted Answer

A)  A record containing all accounts of a company and their balances.
B)  A written promise to pay a definite sum of money on a specified future date.
C)  The difference between total debits and total credits for an account including the beginning balance.
D)  An increase in an asset, dividend, and expense account, and a decrease in a liability, common stock, and revenue account; recorded on the left side of a T-account.
E)  A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances.F) An account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.G) The ratio of total liabilities to total assets; used to reflect the risk associated with the company's debts.H) A list of all accounts used by a company and the identification number assigned to each account.I) A decrease in an asset, dividend, and expense account, and an increase in a liability, common stock, and revenue account; recorded on the right side of a T-account.J) A chronological record of each transaction in one place that shows debits and credits for each transaction.K) A) and G)
L) C) and G)

Question 8

Joe Jackson opened Jackson's Repairs on March 1 of the current year.During March,the following transactions occurred and were recorded in the company's books:
Jackson invested $25,000 cash in the business in exchange for common stock.
Jackson contributed $100,000 of equipment to the business.
The company paid $2,000 cash to rent office space for the month of March.
The company received $16,000 cash for repair services provided during March.
The company paid $6,200 for salaries for the month of March.
The company provided $3,000 of services to customers on account.
The company paid cash of $500 for utilities for the month of March.
The company received $3,100 cash in advance from a customer for repair services to be provided in April.
The company paid Jackson $5,000 cash as a dividend.
Based on this information,net income for March would be:

Accepted Answer

A)   $10,300.
B)   $13,400.
C)   $5,300.
D)   $8,400.
E)   $13,500.F) All of the above
G) B) and D)

Question 9

Identify the following accounts as appearing on either the Income Statement (IS)  or Balance Sheet (BS) .
-Wages Payable

Accepted Answer

A)  BS
B)  ISC) A) and B)
D) undefined

Question 10

On May 31,the Cash account of Bottle's R US had a normal balance of $5,000.During May,the account was debited for a total of $12,200 and credited for a total of $11,500.What was the balance in the Cash account at the beginning of May?

Accepted Answer

A)   A $0 balance.
B)   A $4,300 debit balance.
C)   A $4,300 credit balance.
D)   A $5,700 debit balance.
E)   A $5,700 credit balance.F) A) and B)
G) None of the above

Question 11

Paul's Landscaping paid $500 on account for supplies purchased in the prior month.Which of the following general journal entries will Paul's Landscaping make to record this transaction?

Accepted Answer

A)   Debit Office supplies expense, $500; credit Cash, $500.
B)   Debit Cash, $500; credit Office supplies, $500.
C)   Debit Office supplies, $500; credit Cash, $500.
D)   Debit Office supplies, $500; credit Accounts payable, $500.
E)   Debit Accounts payable, $500; credit Cash, $500.F) A) and D)
G) B) and E)

Question 12

An account balance is:

Accepted Answer

A)   The total of the credit side of the account.
B)   The total of the debit side of the account.
C)   The difference between the total debits and total credits for an account including the beginning balance.
D)   Assets = liabilities + equity.
E)   Always a credit.F) A) and E)
G) B) and D)

Question 13

ABC Company made a $2,500 payment on account,to satisfy a previously recorded account payable.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of ABC Company made a $2,500 payment on...

Question 14

J.Brown Consulting immediately paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that J.Brown Consulting will make to record this transaction.

Accepted Answer

A)     Utilities Expense 500 Cash 500\begin{array} { | l | r | r | } \hline 	ext { Utilities Expense } & 500 & \\hline 	ext { Cash } & & 500 \\hline\end{array} Utilities Expense  Cash ​500​500​​ 
B)     Cash 500 Utilities Expense 500\begin{array} { | l | r | r | } \hline 	ext { Cash } & 500 & \\hline 	ext { Utilities Expense } & & 500 \\hline\end{array} Cash  Utilities Expense ​500​500​​ 
C)     Cash 500 Accounts Payable 500\begin{array} { | l | r | l | } \hline 	ext { Cash } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Cash  Accounts Payable ​500​500​​ 
D)     Utilities Expense 500 Accounts Payable 500\begin{array} { | l | r | l | } \hline 	ext { Utilities Expense } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Utilities Expense  Accounts Payable ​500​500​​ 
E)     Prepaid Utilities 500 Accounts Payable 500\begin{array} { | l | r | l | } \hline 	ext { Prepaid Utilities } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Prepaid Utilities  Accounts Payable ​500​500​​F) A) and C)
G) C) and E)

Question 15

The following trial balance is prepared from the general ledger of HG's Auto Maintenance.
 $$\begin{array}{c}
\text {HG'S AUTO MAINTENANCE}\
\text {Trial Balance}\
\text {October 31}\
\begin{array} { | l | r | r | } 
\hline \text { Cash } & \text { Debit } & \text { Credit } \
\hline \text { Accounts receivable } & 2,800 & \
\hline \text { Supplies } & 500 & \
\hline \text { Shop equipment } & 13,000 & \
\hline \text { Office equipment } & 6,600 & \
\hline \text { Accounts payable } & & 22,000 \
\hline \text { Hal Griffin, Capital } & 4,200 & \
\hline \text { Hal Griffin, Withdrawals } & & 11,875 \
\hline \text { Repair fees earned } & 8,600 & \
\hline \text { Supplies expense } & \$ 37,675 & \$ 38,385 \
\hline
\end{array}\end{array}$$ 
Because the trial balance did not balance,you decided to examine the accounting records.You found that the following errors had been made:
1.A purchase of supplies on account for $245 was posted as a debit to Supplies and as a debit to Accounts Payable.
2.An investment of $500 cash by the sole stockholder was debited to Common Stock and credited to Cash.
3.In computing the balance of the Accounts Receivable account,a debit of $600 was omitted from the computation.
4.One debit of $300 to the Dividends account was posted as a credit.
5.Office equipment purchased for $800 was posted to the Shop Equipment account.
6.One entire entry was not posted to the general ledger.The transaction involved the receipt of $125 cash for repair services performed for cash.
Prepare a corrected trial balance for the HG's Auto Maintenance as of October 31.

Accepted Answer

Trial Balance
October 31
^aCa...

Question 16

J.Smith,the sole stockholder,received a $100 dividend from Jay's Limo Services.Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Accepted Answer

A)     Dividends 100 Cash 100\begin{array} { | l | r | r | } \hline 	ext { Dividends } & 100 & \\hline 	ext { Cash } & & 100 \\hline\end{array} Dividends  Cash ​100​100​​ 
B)     Cash 100 Dividends 100\begin{array} { | l | r | r | } \hline 	ext { Cash } & 100 & \\hline 	ext { Dividends } & & 100 \\hline\end{array} Cash  Dividends ​100​100​​ 
C)     Common Stock 100 Dividends 100\begin{array} { | l | r | r | } \hline 	ext { Common Stock } & 100 & \\hline 	ext { Dividends } & & 100 \\hline\end{array} Common Stock  Dividends ​100​100​​ 
D)     Dividends 100 Common Stock 100\begin{array} { | l | r | r | } \hline 	ext { Dividends } & 100 & \\hline 	ext { Common Stock } & & 100 \\hline\end{array} Dividends  Common Stock ​100​100​​ 
E)     Cash 100 Common Stock 100\begin{array} { | l | r | r | } \hline 	ext { Cash } & 100 & \\hline 	ext { Common Stock } & & 100 \\hline\end{array} Cash  Common Stock ​100​100​​F) A) and E)
G) A) and D)

Question 17

A business's general journal provides a place for recording all of the following except:

Accepted Answer

A)   The transaction date.
B)   The names of the accounts involved.
C)   The amount of each debit and credit.
D)   An explanation of the transaction.
E)   The balance in each account.F) A) and B)
G) A) and E)

Question 18

Unearned revenues are generally:

Accepted Answer

A)   Revenues that have been earned and received in cash.
B)   Revenues that have been earned but not yet collected in cash.
C)   Liabilities created when a customer pays in advance for products or services before the revenue is earned.
D)   Recorded as an asset in the accounting records.
E)   Increases to common stock.F) B) and D)
G) D) and E)

Question 19

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.F) B) and E)
G) B) and C)

Question 20

Expenses always decrease equity.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing for Business Transactions

Paul's Landscaping paid $500 on account for supplies purchased in the prior month.Which of the following general journal entries will Paul's Landscaping make to record this transaction?

Correct Answer
verified

An account balance is:

Correct Answer
verified

J.Smith,the sole stockholder,received a $100 dividend from Jay's Limo Services.Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Correct Answer
verified

Mary Martin,the sole stockholder of Martin Consulting,started the business by investing $40,000 cash.Identify the general journal entry below that Martin Consulting will make to record the transaction.

Correct Answer
verified

Which of the following statements is not true:

Correct Answer
verified

ABC Company made a $2,500 payment on account,to satisfy a previously recorded account payable.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct Answer
verified

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Correct Answer
verified

Correct Answer
verified
Trial Balance
October 31
^aCa...
View Answer

J.Brown Consulting immediately paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that J.Brown Consulting will make to record this transaction.

Correct Answer
verified

Match the following terms with the appropriate definition. -Trial balance

Correct Answer
verified

Unearned revenues are generally:

Correct Answer
verified

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

Correct Answer
verified

Identify the following accounts as appearing on either the Income Statement (IS) or Balance Sheet (BS) . -Wages Payable

Correct Answer
verified

Expenses always decrease equity.

Correct Answer
verified

On May 31,the Cash account of Bottle's R US had a normal balance of $5,000.During May,the account was debited for a total of $12,200 and credited for a total of $11,500.What was the balance in the Cash account at the beginning of May?

Correct Answer
verified

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

Correct Answer
verified
\[\begin{array} { l }
112 / 3...
View Answer

A business's general journal provides a place for recording all of the following except:

Correct Answer
verified

A bookkeeper has debited an asset 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:

Correct Answer
verified

Correct Answer
verified

If the common stock account had a $10,000 credit balance at the beginning of the period,and during the period,stockholders invest an additional $5,000,the balance in the common stock account listed on the trial balance will be equal to a debit balance of $5,000.

Correct Answer
verified

Exam 2: Analyzing for Business Transactions

Paul's Landscaping paid $500 on account for supplies purchased in the prior month.Which of the following general journal entries will Paul's Landscaping make to record this transaction?

Correct AnswerverifiedShow Answer

An account balance is:

Correct AnswerverifiedShow Answer

J.Smith,the sole stockholder,received a $100 dividend from Jay's Limo Services.Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Correct AnswerverifiedShow Answer

Mary Martin,the sole stockholder of Martin Consulting,started the business by investing $40,000 cash.Identify the general journal entry below that Martin Consulting will make to record the transaction.

Correct AnswerverifiedShow Answer

Which of the following statements is not true:

Correct AnswerverifiedShow Answer

ABC Company made a $2,500 payment on account,to satisfy a previously recorded account payable.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Correct AnswerverifiedShow Answer

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedTrial BalanceOctober 31 aCa...View AnswerShow Answer

J.Brown Consulting immediately paid $500 cash for utilities for the current month.Given the choices below,determine the general journal entry that J.Brown Consulting will make to record this transaction.

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition. -Trial balance

Correct AnswerverifiedShow Answer

Unearned revenues are generally:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Identify the following accounts as appearing on either the Income Statement (IS) or Balance Sheet (BS) . -Wages Payable

Correct AnswerverifiedShow Answer

Expenses always decrease equity.

Correct AnswerverifiedShow Answer

On May 31,the Cash account of Bottle's R US had a normal balance of $5,000.During May,the account was debited for a total of $12,200 and credited for a total of $11,500.What was the balance in the Cash account at the beginning of May?

Correct AnswerverifiedShow Answer

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

Correct Answerverified\[\begin{array} { l } 112 / 3...View AnswerShow Answer

A business's general journal provides a place for recording all of the following except:

Correct AnswerverifiedShow Answer

A bookkeeper has debited an asset 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:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the common stock account had a $10,000 credit balance at the beginning of the period,and during the period,stockholders invest an additional $5,000,the balance in the common stock account listed on the trial balance will be equal to a debit balance of $5,000.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Trial Balance
October 31
^aCa...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
\[\begin{array} { l }
112 / 3...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified