Question 1

The purchase of supplies on account requires a credit to Accounts Payable.

Accepted Answer

A) True 
 B)False

Question 2

Owner's Drawings is

Accepted Answer

A)   increased when the owner invests cash in the business.
B)   credited when cash or other assets are distributed to the owner.
C)   increased for owner withdrawals.
D)   decreased when the owner withdraws cash from the business.E) A) and B)
F) C) and D)

Question 3

Which one of the following could represent the expanded basic accounting equation?

Accepted Answer

A)   Assets = Liabilities + Owner's Capital + Owner's Drawings - Revenue - Expenses
B)   Assets + Owner's Drawings + Expenses = Liabilities + Owner's Capital + Revenues
C)   Assets - Liabilities - Owner's Drawings = Owner's Capital + Revenues - Expenses
D)   Assets = Revenues + Expenses - LiabilitiesE) A) and D)
F) All of the above

Question 4

Borrowing cash from the bank is recorded with a

Accepted Answer

A)   debit to Accounts Payable.
B)   credit to Cash.
C)   debit to Notes Payable.
D)   credit to Notes Payable.E) A) and C)
F) A) and D)

Question 5

Purchasing supplies for cash will require a credit to Supplies and a debit to Cash.

Accepted Answer

A) True 
 B)False

Question 6

Beethoven Company provided consulting services and billed the client $3,600. As a result of this event,

Accepted Answer

A)   assets remained unchanged.
B)   assets increased by $3,600.
C)   owner's equity increased by $3,600.
D)   assets and owner's equity both increased by $3,600.E) None of the above
F) All of the above

Question 7

On October 3, Jimmy Stokes, a musician, received a cash payment for services previously billed to a client. Jimmy paid his cell phone bill. He also bought supplies on account. For the three transactions, at least one of the entries will include a

Accepted Answer

A)   credit to Owner's Drawings.
B)   credit to Supplies Expense.
C)   debit to Accounts Payable.
D)   credit to Accounts Receivable.E) A) and B)
F) B) and D)

Question 8

The right side of an account is

Accepted Answer

A)   the credit side.
B)   blank.
C)   the debit side.
D)   the normal balance of the account.E) C) and D)
F) All of the above

Question 9

Brettschneider CPA provided accounting services and billed the client $6,600. As a result of this transaction,

Accepted Answer

A)   total assets remained unchanged.
B)   total liabilities increased by $6,600.
C)   owner's equity increased by $6,600.
D)   both assets and liabilities increased by $6,600.E) C) and D)
F) A) and B)

Question 10

At June 1, Cooper Company had an accounts receivable balance of $14,000. During the month, the company performed credit services of $35,000 and collected accounts receivable of $23,000. What is the balance in accounts receivable at June 30?

Accepted Answer

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Question 11

On October 3, Ken Steele, a carpenter, received a cash payment for services previously billed to a client. Ken paid his telephone bill, and he also bought equipment on credit. For the three transactions, at least one of the entries will include a

Accepted Answer

A)   credit to Owner's Capital.
B)   debit to Notes Payable.
C)   debit to Accounts Receivable.
D)   credit to Accounts Payable.E) C) and D)
F) A) and B)

Question 12

A debit represents an increase to an expense account.

Accepted Answer

A) True 
 B)False

Question 13

The normal balance of a liability account is a debit.

Accepted Answer

A) True 
 B)False

Question 14

A credit balance in a liability account indicates that an error in recording has occurred.

Accepted Answer

A) True 
 B)False

Question 15

Laura Chu withdraws $1,000 cash from her company, One Note Music, for personal use. Recording this transaction will include a credit to Cash and a debit of $1,000 to

Accepted Answer

A)   Drawings Expense.
B)   Owner's Capital.
C)   Owner's Drawings.
D)   Salaries and Wages Expense.E) B) and C)
F) A) and D)

Question 16

Receipt of a payment on account requires a credit to Accounts Payable.

Accepted Answer

A) True 
 B)False

Question 17

The double-entry system requires that each transaction must be recorded

Accepted Answer

A)   in at least two different accounts.
B)   in two sets of books.
C)   in a journal and in a ledger.
D)   first as a revenue and then as an expense.E) A) and B)
F) C) and D)

Question 18

Debits

Accepted Answer

A)   decrease both assets and liabilities.
B)   decrease assets and increase liabilities.
C)   increase both assets and liabilities.
D)   increase assets and decrease liabilities.E) B) and C)
F) A) and D)

Question 19

In recording an accounting transaction in a double-entry system

Accepted Answer

A)   the number of debit accounts must equal the number of credit accounts.
B)   there must always be entries made on both sides of the accounting equation.
C)   the amount of the debits must equal the amount of the credits.
D)   there must only be two accounts affected by any transaction.E) None of the above
F) All of the above

Question 20

A credit represents a decrease to a revenue account.

Accepted Answer

A) True 
 B)False

Exam 3: The Recording Process: Debits and Credits

Brettschneider CPA provided accounting services and billed the client $6,600. As a result of this transaction,

Correct AnswerverifiedShow Answer

The right side of an account is

Correct AnswerverifiedShow Answer

At June 1, Cooper Company had an accounts receivable balance of $14,000. During the month, the company performed credit services of $35,000 and collected accounts receivable of $23,000. What is the balance in accounts receivable at June 30?

Correct Answerverified\(\begin{array}{lc}\text { Beginning ac...View AnswerShow Answer

A debit represents an increase to an expense account.

Correct AnswerverifiedShow Answer

Beethoven Company provided consulting services and billed the client $3,600. As a result of this event,

Correct AnswerverifiedShow Answer

On October 3, Jimmy Stokes, a musician, received a cash payment for services previously billed to a client. Jimmy paid his cell phone bill. He also bought supplies on account. For the three transactions, at least one of the entries will include a

Correct AnswerverifiedShow Answer

The normal balance of a liability account is a debit.

Correct AnswerverifiedShow Answer

Debits

Correct AnswerverifiedShow Answer

Owner's Drawings is

Correct AnswerverifiedShow Answer

A credit represents a decrease to a revenue account.

Correct AnswerverifiedShow Answer

Laura Chu withdraws $1,000 cash from her company, One Note Music, for personal use. Recording this transaction will include a credit to Cash and a debit of $1,000 to

Correct AnswerverifiedShow Answer

Purchasing supplies for cash will require a credit to Supplies and a debit to Cash.

Correct AnswerverifiedShow Answer

In recording an accounting transaction in a double-entry system

Correct AnswerverifiedShow Answer

The double-entry system requires that each transaction must be recorded

Correct AnswerverifiedShow Answer

A credit balance in a liability account indicates that an error in recording has occurred.

Correct AnswerverifiedShow Answer

The purchase of supplies on account requires a credit to Accounts Payable.

Correct AnswerverifiedShow Answer

Which one of the following could represent the expanded basic accounting equation?

Correct AnswerverifiedShow Answer

On October 3, Ken Steele, a carpenter, received a cash payment for services previously billed to a client. Ken paid his telephone bill, and he also bought equipment on credit. For the three transactions, at least one of the entries will include a

Correct AnswerverifiedShow Answer

Borrowing cash from the bank is recorded with a

Correct AnswerverifiedShow Answer

Receipt of a payment on account requires a credit to Accounts Payable.

Correct AnswerverifiedShow Answer

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