Question 1

The normal balance of the Supplies account is a ________ because it is a(n)  ________ account.

Accepted Answer

A)   credit, liability
B)   debit, asset
C)   credit, expense
D)   debit, shareholders' equityE) All of the above
F) A) and D)

Question 2

The collection of cash from a customer on account would:

Accepted Answer

A)   increase net income and shareholders' equity
B)   increase assets and decrease liabilities
C)   increase assets and increase net income
D)   have no effect on net income or shareholders' equityE) A) and B)
F) B) and C)

Question 3

Given the following transactions for Clip Corporation, prepare a trial balance as of March 31, 2014.
a. Owner invested $15,250 cash and $6,500 worth of equipment into the business received common shares in return.
b. Purchased supplies on account, $450.
c. Rented office space paying one months rent, $850.
d. Performed services for a customer on account, $1,400.
e. Purchased a truck by paying $1,000 down and signing a note for the remainder of $8,500.
f. Performed services for a customer and immediately collected $800 cash.
g. Paid employees salaries of $1,200.
h. Owner received a dividend of $500.

Accepted Answer

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Question 4

The accounting transaction to record payment of the telephone bill would include a:

Accepted Answer

A)   credit to Cash
B)   credit to Accounts Payable
C)   credit to Utilities Expense
D)   debit to Accounts ReceivableE) A) and D)
F) B) and D)

Question 5

The payment of the owner's personal expenses from the business's chequebook should be recorded with a debit to:

Accepted Answer

A)   Cash
B)   Dividends
C)   Common shares
D)   Accounts ReceivableE) None of the above
F) B) and C)

Question 6

Accounting transactions are first recorded in a book or record called a:

Accepted Answer

A)   file
B)   ledger
C)   journal
D)   source documentE) B) and C)
F) A) and C)

Question 7

Posting, a part of the accounting process, refers to:

Accepted Answer

A)   copying amounts from the accounts in the general ledger to the journal
B)   copying amounts from the financial statements to the general ledger
C)   copying amounts from the journal to the appropriate accounts in the general ledger
D)   copying amounts from the general ledger to the financial statementsE) B) and C)
F) A) and C)

Question 8

The Dividends account normally has a debit balance.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following business events may not be recorded in a company's general ledger?

Accepted Answer

A)   The company paid each of its employees a Christmas bonus.
B)   The company issued 100 shares of common stock.
C)   The company purchased two acres of land for future plant expansion.
D)   A lawsuit has been filed by one of the company's customers (against the company) .E) None of the above
F) All of the above

Question 10

When the owner of a business invests cash into the business, which of the following accounts is debited?

Accepted Answer

A)   Dividends
B)   Cash
C)   Common Shares
D)   Accounts ReceivableE) None of the above
F) All of the above

Question 11

The normal balance of the Accounts Payable account is a ________ because it is a(n)  ________ account.

Accepted Answer

A)   debit, asset
B)   credit, shareholders' equity
C)   credit, liability
D)   credit, revenueE) B) and D)
F) All of the above

Question 12

The purchase of a building with a cash down payment and a written promise to pay the balance in the future would include a:

Accepted Answer

A)   credit to Cash and a credit to Note Payable
B)   debit to Cash and a credit to Buildings
C)   debit to Note Payable and a credit to Cash
D)   debit to Cash and a debit to Note PayableE) B) and D)
F) A) and B)

Question 13

Which of the following accounts normally has a debit balance?

Accepted Answer

A)   Dividends
B)   Retained Earnings
C)   Share capital
D)   RevenueE) A) and B)
F) B) and D)

Question 14

For each of the following independent scenarios, fill in the blanks with the appropriate dollar amount.

Accepted Answer

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Question 15

Debits are always recorded (journalized) after credits.

Accepted Answer

A) True 
 B)False

Question 16

Every accounting transaction involves an increase in at least one account and a decrease in at least one other account.

Accepted Answer

A) True 
 B)False

Question 17

The retained earnings account represents the money invested by shareholders into the business since its inception.

Accepted Answer

A) True 
 B)False

Question 18

The trial balance is used to prepare the income statement.

Accepted Answer

A) True 
 B)False

Question 19

The costs of operating a business are usually called:

Accepted Answer

A)   expenses
B)   liabilities
C)   assets
D)   revenuesE) B) and C)
F) A) and B)

Question 20

A credit increases the balance of which types of accounts?

Accepted Answer

A)   revenue and assets
B)   liabilities and assets
C)   liabilities and expenses
D)   shareholders' equity and liabilitiesE) A) and B)
F) C) and D)

Exam 2: Recording Business Transactions

The normal balance of the Supplies account is a because it is a(n) account.

Correct Answer
verified

The purchase of a building with a cash down payment and a written promise to pay the balance in the future would include a:

Correct Answer
verified

Correct Answer
verified
_TB4002_00...
View Answer

The normal balance of the Accounts Payable account is a because it is a(n) account.

Correct Answer
verified

Debits are always recorded (journalized) after credits.

Correct Answer
verified

The collection of cash from a customer on account would:

Correct Answer
verified

Every accounting transaction involves an increase in at least one account and a decrease in at least one other account.

Correct Answer
verified

The retained earnings account represents the money invested by shareholders into the business since its inception.

Correct Answer
verified

Accounting transactions are first recorded in a book or record called a:

Correct Answer
verified

The accounting transaction to record payment of the telephone bill would include a:

Correct Answer
verified

Which of the following accounts normally has a debit balance?

Correct Answer
verified

When the owner of a business invests cash into the business, which of the following accounts is debited?

Correct Answer
verified

The Dividends account normally has a debit balance.

Correct Answer
verified

The trial balance is used to prepare the income statement.

Correct Answer
verified

The payment of the owner's personal expenses from the business's chequebook should be recorded with a debit to:

Correct Answer
verified

Posting, a part of the accounting process, refers to:

Correct Answer
verified

A credit increases the balance of which types of accounts?

Correct Answer
verified

The costs of operating a business are usually called:

Correct Answer
verified

Which of the following business events may not be recorded in a company's general ledger?

Correct Answer
verified

For each of the following independent scenarios, fill in the blanks with the appropriate dollar amount.

Correct Answer
verified
_TB4002_00...
View Answer

Exam 2: Recording Business Transactions

The normal balance of the Supplies account is a ________ because it is a(n) ________ account.

Correct AnswerverifiedShow Answer

The purchase of a building with a cash down payment and a written promise to pay the balance in the future would include a:

Correct AnswerverifiedShow Answer

Correct Answerverified_TB4002_00...View AnswerShow Answer

The normal balance of the Accounts Payable account is a ________ because it is a(n) ________ account.

Correct AnswerverifiedShow Answer

Debits are always recorded (journalized) after credits.

Correct AnswerverifiedShow Answer

The collection of cash from a customer on account would:

Correct AnswerverifiedShow Answer

Every accounting transaction involves an increase in at least one account and a decrease in at least one other account.

Correct AnswerverifiedShow Answer

The retained earnings account represents the money invested by shareholders into the business since its inception.

Correct AnswerverifiedShow Answer

Accounting transactions are first recorded in a book or record called a:

Correct AnswerverifiedShow Answer

The accounting transaction to record payment of the telephone bill would include a:

Correct AnswerverifiedShow Answer

Which of the following accounts normally has a debit balance?

Correct AnswerverifiedShow Answer

When the owner of a business invests cash into the business, which of the following accounts is debited?

Correct AnswerverifiedShow Answer

The Dividends account normally has a debit balance.

Correct AnswerverifiedShow Answer

The trial balance is used to prepare the income statement.

Correct AnswerverifiedShow Answer

The payment of the owner's personal expenses from the business's chequebook should be recorded with a debit to:

Correct AnswerverifiedShow Answer

Posting, a part of the accounting process, refers to:

Correct AnswerverifiedShow Answer

A credit increases the balance of which types of accounts?

Correct AnswerverifiedShow Answer

The costs of operating a business are usually called:

Correct AnswerverifiedShow Answer

Which of the following business events may not be recorded in a company's general ledger?

Correct AnswerverifiedShow Answer

For each of the following independent scenarios, fill in the blanks with the appropriate dollar amount.

Correct Answerverified_TB4002_00...View AnswerShow Answer

The normal balance of the Supplies account is a because it is a(n) account.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
_TB4002_00...
View Answer

The normal balance of the Accounts Payable account is a because it is a(n) account.

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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_TB4002_00...
View Answer