Question 1

An account is a record of increases and decreases in a specific asset,liability,equity,revenue,or expense item.

Accepted Answer

A) True 
 B)False

Question 2

It is not necessary to keep separate accounts for all items of importance for business decisions.

Accepted Answer

A) True 
 B)False

Question 3

Jones Hardware,Inc.paid a cash dividend of $6,000.What is the necessary entry to record this transaction?

Accepted Answer

A)  Debit Cash,credit Retained Earnings.
B)  Debit Dividends,credit Cash.
C)  Debit Common Stock,credit Cash.
D)  Debit Cash,credit Common Stock.
E)  Debit Cash,credit Dividend Income.F) None of the above
G) All of the above

Question 4

What are the total assets shown on the trial balance below?

Accepted Answer

A)  $291,340
B)  $106,962
C)  $198,730
D)  $218,730
E)  $221,580F) All of the above
G) B) and C)

Question 5

What is total debits on this trial balance?

Accepted Answer

A)  $291,340
B)  $106,964
C)  $199,152
D)  $193,390
E)  $203,152F) A) and B)
G) All of the above

Question 6

Montgomery Marketing Co.had assets of $475,000; liabilities of $275,500; and equity of $199,500.Calculate its debt ratio.

Accepted Answer

$275,500/$...

Question 7

On April 15,Landscape by Design Inc.receives cash of $2,000 in advance from a customer who will be out of the country for landscaping services to be performed during the four-month period beginning on June 1.How would Landscape by Design record this transaction?

Accepted Answer

A)  Debit Cash for $2,000 and Credit Unearned Revenue for $2,000.
B)  Credit Cash for $2,000 and Debit Unearned Revenue for $2,000.
C)  Debit Cash for $2,000 and Credit Landscape Revenue for $2,000.
D)  Debit Accounts Receivable for $2,000 and credit Landscape Revenue for $2,000.
E)  Debit Cash for $2,000 and Credit Accounts Receivable for $2,000.F) C) and D)
G) B) and E)

Question 8

Which of the following is the appropriate journal entry if a company hires a new employee?

Accepted Answer

A)  Debit to Cash,credit to Wages Revenue.
B)  No entry should be made.
C)  Debit to Wages Expense,credit to Cash.
D)  Debit to Cash,credit to Wages Expense.
E)  Debit to Wages Payable,credit to Wages Expense.F) A) and E)
G) C) and D)

Question 9

Teasdale Printing Services purchases equipment on credit for $8,000.How would Teasdale record this transaction?

Accepted Answer

A)  Debit Equipment for $8,000 and credit Cash for $8,000.
B)  Credit Cash for $8,000 and credit Accounts Payable for $8,000.
C)  Debit Accounts Payable for $8,000 and credit Cash for $8,000.
D)  Debit Equipment for $8,000 and Credit Accounts Payable for $8,000.
E)  Debit Equipment for $8,000 and Credit Accounts Receivable for $8,000.F) A) and B)
G) B) and E)

Question 10

The trial balance can serve as a replacement for the balance sheet,since debits must balance with credits.

Accepted Answer

A) True 
 B)False

Question 11

An account balance is the difference between the debits and credits for an account including any beginning balance.

Accepted Answer

A) True 
 B)False

Question 12

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit.What effect would this error have on the trial balance?

Accepted Answer

A)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $4,700.
B)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700.
C)  The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400.
D)  The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400.
E)  The total of the Debit column of the trial balance will equal the total of the Credit column.F) B) and C)
G) A) and C)

Question 13

On May 1,Legal Services LLC collected $5,000 for legal services that had been provided on account.How would the company record this transaction?

Accepted Answer

A)  Debit Accounts Receivable for $5,000 and Credit Legal Services Revenue for $5,000.
B)  Debit Cash for $5,000 and Credit Legal Services Revenue for $5,000.
C)  Debit Cash for $5,000 and Credit Accounts Receivable for $5,000.
D)  Debit Accounts Receivable for $5,000 and Debit Legal Services Revenue for $5,000
E)  Credit Cash for $5,000 and Debit Accounts Receivable for $5,000.F) B) and C)
G) C) and D)

Question 14

A trial balance prepared at year-end showed total credits exceeding total debits by $4,950.This discrepancy could have been caused by:

Accepted Answer

A)  An error in the general journal where a $4,950 increase in Accounts Receivable was recorded as an increase in Cash.
B)  A net income of $4,950.
C)  The balance of $49,500 in Accounts Payable being entered in the trial balance as $4,950.
D)  The balance of $5,500 in the Office Equipment account being entered on the trial balance as a debit of $550.
E)  An error in the general journal where a $4,950 increase in Accounts Payable was recorded as a decrease in Accounts Payable.F) A) and D)
G) None of the above

Question 15

A list of all accounts used by a company and the identification number assigned to each account is called a:

Accepted Answer

A)  Ledger
B)  Journal
C)  Trial balance
D)  Chart of accounts
E)  General JournalF) B) and E)
G) B) and D)

Question 16

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?

Accepted Answer

A)  $17,400 credit
B)  $14,400 credit
C)  $14,400 debit
D)  $15,900 credit
E)  $15,900 debitF) All of the above
G) C) and E)

Question 17

Land and buildings are generally recorded in the same ledger account.

Accepted Answer

A) True 
 B)False

Question 18

A debit entry is always favorable.

Accepted Answer

A) True 
 B)False

Question 19

Jab Company pays a $10,000 installment toward principal on a long-term note payable.How would the company record this payment?

Accepted Answer

A)  Debit Notes Payable for $10,000 and credit Cash for $10,000.
B)  Debit Cash for $10,000 and credit Notes Payable for $10,000.
C)  Debit Accounts Payable by $10,000 and credit Cash for $10,000.
D)  Debit Cash for $10,000 and credit Accounts Payable for $10,000.
E)  Debit Common Stock for $10,000 and credit Cash for $10,000.F) A) and D)
G) B) and C)

Question 20

Which of the following statements is incorrect?

Accepted Answer

A)  Higher financial leverage involves higher risk.
B)  Risk is higher if a company has more liabilities.
C)  Risk is higher if a company has higher assets.
D)  The debt ratio is one measure of financial risk.
E)  Lower financial leverage involves lower risk.F) A) and B)
G) B) and C)

Exam 2: Accounting System and Financial Statements

What are the total assets shown on the trial balance below?

Correct AnswerverifiedShow Answer

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?

Correct AnswerverifiedShow Answer

The trial balance can serve as a replacement for the balance sheet,since debits must balance with credits.

Correct AnswerverifiedShow Answer

A trial balance prepared at year-end showed total credits exceeding total debits by $4,950.This discrepancy could have been caused by:

Correct AnswerverifiedShow Answer

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit.What effect would this error have on the trial balance?

Correct AnswerverifiedShow Answer

Jones Hardware,Inc.paid a cash dividend of $6,000.What is the necessary entry to record this transaction?

Correct AnswerverifiedShow Answer

On May 1,Legal Services LLC collected $5,000 for legal services that had been provided on account.How would the company record this transaction?

Correct AnswerverifiedShow Answer

On April 15,Landscape by Design Inc.receives cash of $2,000 in advance from a customer who will be out of the country for landscaping services to be performed during the four-month period beginning on June 1.How would Landscape by Design record this transaction?

Correct AnswerverifiedShow Answer

An account balance is the difference between the debits and credits for an account including any beginning balance.

Correct AnswerverifiedShow Answer

Jab Company pays a $10,000 installment toward principal on a long-term note payable.How would the company record this payment?

Correct AnswerverifiedShow Answer

A debit entry is always favorable.

Correct AnswerverifiedShow Answer

Montgomery Marketing Co.had assets of $475,000; liabilities of $275,500; and equity of $199,500.Calculate its debt ratio.

Correct Answerverified$275,500/$...View AnswerShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

Teasdale Printing Services purchases equipment on credit for $8,000.How would Teasdale record this transaction?

Correct AnswerverifiedShow Answer

An account is a record of increases and decreases in a specific asset,liability,equity,revenue,or expense item.

Correct AnswerverifiedShow Answer

Which of the following is the appropriate journal entry if a company hires a new employee?

Correct AnswerverifiedShow Answer

Land and buildings are generally recorded in the same ledger account.

Correct AnswerverifiedShow Answer

It is not necessary to keep separate accounts for all items of importance for business decisions.

Correct AnswerverifiedShow Answer

What is total debits on this trial balance?

Correct AnswerverifiedShow Answer

A list of all accounts used by a company and the identification number assigned to each account is called a:

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$275,500/$...
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