Question 1

A transaction that includes a debit to an expense and a credit to a liability indicates that:

Accepted Answer

A)  revenues increased.
B)  expenses decreased.
C)  liabilities increased.
D)  liabilities decreased.E) B) and D)
F) A) and B)

Question 2

An account receivable represents the promise of the business to pay a debt.

Accepted Answer

A) True 
 B)False

Question 3

Business events are recorded even if the financial impact cannot be measured.

Accepted Answer

A) True 
 B)False

Question 4

Which transaction decreases stockholders' equity?

Accepted Answer

A)  Inventory was purchased on account.
B)  Services were performed on account.
C)  Services were performed and cash was immediately received from the customers.
D)  Employees worked one week and were paid at the end of the week.E) B) and D)
F) A) and D)

Question 5

A business purchased office supplies of $23,000 by signing a note.The business would:

Accepted Answer

A)  debit Supplies for $23,000 and credit Accounts Payable for $23,000.
B)  debit Supplies for $23,000 and credit Notes Payable for $23,000.
C)  debit Notes Receivable for $23,000 and credit Supplies for $23,000.
D)  debit Notes Payable for $23,000 and credit Supplies Expense for $23,000.E) A) and B)
F) C) and D)

Question 6

A company had credit sales of $33,000 and cash sales of $25,000 during the month of May.Also during May,the company paid wages of $22,000 and utilities of $8,000.It also received payments from customers on account totaling $5,800.What was the company's net income for the month?

Accepted Answer

A)  $25,000
B)  $28,000
C)  $58,000
D)  $88,000E) A) and B)
F) A) and C)

Question 7

An example of a slide-type error is writing:

Accepted Answer

A)  $1,300 as $3,100.
B)  $300 as $600.
C)  $5,000 as $10,000.
D)  $500 as $50.E) A) and D)
F) B) and C)

Question 8

For a new business,the beginning balance of retained earnings equals:

Accepted Answer

A)  cash invested by the stockholders.
B)  beginning balance of the common stock account.
C)  zero.
D)  budgeted net income for the first year.E) B) and C)
F) All of the above

Question 9

The trial balance summarizes all the account balances for the financial statements and shows whether total debits equal total credits.

Accepted Answer

A) True 
 B)False

Question 10

If a company declares and pays a dividend to its stockholders,both cash and expenses will decrease.

Accepted Answer

A) True 
 B)False

Question 11

A chart of accounts:

Accepted Answer

A)  is used by an organization to determine the balance in all of their accounts.
B)  lists all of the accounts of an organization in alphabetical order.
C)  must be the same for all organizations.
D)  lists all of an organization's accounts and account numbers.E) A) and C)
F) None of the above

Question 12

Which of the following transactions would decrease an asset and decrease stockholders' equity?

Accepted Answer

A)  payment of an accounts payable
B)  performance of a service for a client on account
C)  borrowing money from the bank for thirty days
D)  declaration and payment of a dividend to the shareholdersE) B) and C)
F) A) and D)

Question 13

The normal balance of an expense account is a ________ because expenses decrease ________.

Accepted Answer

A)  debit;assets
B)  debit;expenses
C)  debit;retained earnings
D)  credit;retained earningsE) B) and C)
F) None of the above

Question 14

A trial balance has which of the following features?

Accepted Answer

A)  Totals for balance sheet accounts only.
B)  Totals for income statement accounts only.
C)  Totals for all accounts listed in the ledger.
D)  Accounts are listed in alphabetical order.E) A) and B)
F) A) and C)

Question 15

Define and provide an example of each of the following.

Accepted Answer

The answer of Define and provide an example of each...

Question 16

If a company performs services on account,the revenue is not earned until the cash is collected.

Accepted Answer

A) True 
 B)False

Question 17

When working with T accounts,an important rule to remember is:

Accepted Answer

A)  when an account is debited,an amount is entered on the right-hand side on the T account.
B)  an increase to accounts payable will be recorded as a debit.
C)  to credit an account means to enter an amount on the right-hand side of the T account.
D)  the debit side of a T account is on the right-hand side of the T account for assets and expenses.E) A) and B)
F) None of the above

Question 18

A company declared and paid dividends of $1,300.How does this transaction affect the accounting equation?

Accepted Answer

A)  Add $1,300 to Revenue and add $1,300 to Cash.
B)  Add $1,300 to Dividends and add $1,300 to Accounts Receivable.
C)  Subtract $1,300 from Retained Earnings and subtract $1,300 from Cash.
D)  Add $1,300 to Dividend Expense and subtract $1,300 from Cash.E) C) and D)
F) A) and B)

Question 19

Simmons Company began the month with a balance of $84,000 in Accounts Receivable.An analysis of the account determined that sales on account for the month totaled $113,000.At the end of the month,the balance in Accounts Receivable was $86,000.From this information,it can be determined that Simmons Company had collections from customers on account of:

Accepted Answer

A)  $29,000.
B)  $57,000.
C)  $115,000.
D)  $111,000.E) None of the above
F) All of the above

Question 20

The Diamond Store began business on June 1.During the month of June,Diamond had cash payments of $8,000.At the end of June,it had a $20,000 cash balance.Based on this information,the cash receipts for the month of June were:

Accepted Answer

A)  $12,000.
B)  $20,000.
C)  $28,000.
D)  $36,000.E) A) and B)
F) A) and C)

Exam 2: Transaction Analysis

If a company declares and pays a dividend to its stockholders,both cash and expenses will decrease.

Correct Answer
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A business purchased office supplies of $23,000 by signing a note.The business would:

Correct Answer
verified

A trial balance has which of the following features?

Correct Answer
verified

Which of the following transactions would decrease an asset and decrease stockholders' equity?

Correct Answer
verified

A transaction that includes a debit to an expense and a credit to a liability indicates that:

Correct Answer
verified

The Diamond Store began business on June 1.During the month of June,Diamond had cash payments of $8,000.At the end of June,it had a $20,000 cash balance.Based on this information,the cash receipts for the month of June were:

Correct Answer
verified

Correct Answer
verified

If a company performs services on account,the revenue is not earned until the cash is collected.

Correct Answer
verified

Which transaction decreases stockholders' equity?

Correct Answer
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Define and provide an example of each of the following.

Correct Answer
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For a new business,the beginning balance of retained earnings equals:

Correct Answer
verified

Business events are recorded even if the financial impact cannot be measured.

Correct Answer
verified

The trial balance summarizes all the account balances for the financial statements and shows whether total debits equal total credits.

Correct Answer
verified

The normal balance of an expense account is a because expenses decrease .

Correct Answer
verified

A company had credit sales of $33,000 and cash sales of $25,000 during the month of May.Also during May,the company paid wages of $22,000 and utilities of $8,000.It also received payments from customers on account totaling $5,800.What was the company's net income for the month?

Correct Answer
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A chart of accounts:

Correct Answer
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An example of a slide-type error is writing:

Correct Answer
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A company declared and paid dividends of $1,300.How does this transaction affect the accounting equation?

Correct Answer
verified

An account receivable represents the promise of the business to pay a debt.

Correct Answer
verified

When working with T accounts,an important rule to remember is:

Correct Answer
verified

Exam 2: Transaction Analysis

If a company declares and pays a dividend to its stockholders,both cash and expenses will decrease.

Correct AnswerverifiedShow Answer

A business purchased office supplies of $23,000 by signing a note.The business would:

Correct AnswerverifiedShow Answer

A trial balance has which of the following features?

Correct AnswerverifiedShow Answer

Which of the following transactions would decrease an asset and decrease stockholders' equity?

Correct AnswerverifiedShow Answer

A transaction that includes a debit to an expense and a credit to a liability indicates that:

Correct AnswerverifiedShow Answer

The Diamond Store began business on June 1.During the month of June,Diamond had cash payments of $8,000.At the end of June,it had a $20,000 cash balance.Based on this information,the cash receipts for the month of June were:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a company performs services on account,the revenue is not earned until the cash is collected.

Correct AnswerverifiedShow Answer

Which transaction decreases stockholders' equity?

Correct AnswerverifiedShow Answer

Define and provide an example of each of the following.

Correct AnswerverifiedShow Answer

For a new business,the beginning balance of retained earnings equals:

Correct AnswerverifiedShow Answer

Business events are recorded even if the financial impact cannot be measured.

Correct AnswerverifiedShow Answer

The trial balance summarizes all the account balances for the financial statements and shows whether total debits equal total credits.

Correct AnswerverifiedShow Answer

The normal balance of an expense account is a ________ because expenses decrease ________.

Correct AnswerverifiedShow Answer

A company had credit sales of $33,000 and cash sales of $25,000 during the month of May.Also during May,the company paid wages of $22,000 and utilities of $8,000.It also received payments from customers on account totaling $5,800.What was the company's net income for the month?

Correct AnswerverifiedShow Answer

A chart of accounts:

Correct AnswerverifiedShow Answer

An example of a slide-type error is writing:

Correct AnswerverifiedShow Answer

A company declared and paid dividends of $1,300.How does this transaction affect the accounting equation?

Correct AnswerverifiedShow Answer

An account receivable represents the promise of the business to pay a debt.

Correct AnswerverifiedShow Answer

When working with T accounts,an important rule to remember is:

Correct AnswerverifiedShow Answer

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The normal balance of an expense account is a because expenses decrease .

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