Question 1

An account is said to have a debit balance if

Accepted Answer

A)   the amount of the debits exceeds the amount of the credits
B)   there are more entries on the debit side than on the credit side
C)   its normal balance is debit without regard to the amounts or number of entries on the debit side
D)   the first entry of the accounting period was posted on the debit sideE) A) and C)
F) A) and B)

Question 2

On January 7th, Damien Lawson deposited $95,000 in a bank account in the name of JumpStart in return for shares of stock in the corporation. Prepare the journal entry to record this transaction.

Accepted Answer

The answer of On January 7th, Damien Lawson deposited $95,000...

Question 3

Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means

Accepted Answer

A)   all of the information from the journal was correctly transferred to the ledger
B)   all accounts have their correct balances in the ledger
C)   only the journal is accurate; the ledger may be incorrect
D)   only that the debit dollar amounts equal the credit dollar amountsE) None of the above
F) A) and D)

Question 4

Accounts in the ledger are usually maintained in alphabetical order.

Accepted Answer

A) True 
 B)False

Question 5

What is the best explanation for this journal entry?

Accepted Answer

A)   Purchased supplies with cash.
B)   Returned supplies previously purchased.
C)   Purchased supplies on account.
D)   Paid accounts payable.E) All of the above
F) A) and B)

Question 6

The classification and normal balance of the dividends account is

Accepted Answer

A)   an expense with a credit balance
B)   an expense with a debit balance
C)   a liability with a credit balance
D)   a stockholders' equity item with a debit balanceE) All of the above
F) B) and C)

Question 7

Which of the following entries records the receipt of a utility bill from the water company?

Accepted Answer

A)   debit Utilities Expense; credit Accounts Payable
B)   debit Utilities Payable; credit Accounts Receivable
C)   debit Accounts Payable; credit Cash
D)   debit Accounts Payable; credit Utilities PayableE) A) and B)
F) B) and D)

Question 8

In which of the following types of accounts are increases recorded by credits?

Accepted Answer

A)   revenues, liabilities
B)   dividends, assets
C)   liabilities, dividends
D)   expenses, liabilitiesE) None of the above
F) C) and D)

Question 9

Transactions are listed in the journal chronologically.

Accepted Answer

A) True 
 B)False

Question 10

In which order are the accounts listed in the chart of accounts?

Accepted Answer

A)   assets, expenses, liabilities, stockholders' equity, revenues
B)   stockholders' equity, assets, liabilities, revenues, expenses
C)   assets, liabilities, stockholders' equity, revenues, expenses
D)   assets, liabilities, revenues, expenses, stockholders' equityE) A) and D)
F) A) and C)

Question 11

Net income will result when

Accepted Answer

A)   revenues (credits)  > expenses (debits) 
B)   revenues (debits)  > expenses (credits) 
C)   expenses (credits)  
D)   revenues (credits)  = expenses (debits) E) A) and C)
F) A) and B)

Question 12

A patient has a physical examination and asks the bookkeeper to mail the bill. The bookkeeper should

Accepted Answer

A)   make no entry until the cash is received
B)   Cash, debit; Accounts Receivable, credit
C)   Cash, debit; Fees Earned, credit
D)   Accounts Receivable, debit; Fees Earned, creditE) None of the above
F) A) and B)

Question 13

The journal includes both debit and credit accounts for each transaction.

Accepted Answer

A) True 
 B)False

Question 14

Which group of accounts is comprised of only assets?

Accepted Answer

A)   Cash, Accounts Payable, Buildings
B)   Accounts Receivable, Revenue, Cash
C)   Prepaid Expenses, Buildings, Patents
D)   Unearned Revenues, Prepaid Expenses, CashE) A) and D)
F) A) and C)

Question 15

The cash account will always be debited.

Accepted Answer

A) True 
 B)False

Question 16

All of the following accounts are increased with a debit except

Accepted Answer

A)   Unearned Revenues
B)   Land
C)   Accounts Receivable
D)   CashE) B) and D)
F) A) and C)

Question 17

Even when a trial balance is in balance, there may be errors in the individual accounts.

Accepted Answer

A) True 
 B)False

Question 18

Prepaid expenses are an example of an expense.

Accepted Answer

A) True 
 B)False

Question 19

Posting a transaction twice will cause the trial balance totals to be equal.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following stockholder equity accounts follow the same debit and credit rules as liabilities?

Accepted Answer

A)   Capital Stock only
B)   Dividends only
C)   Retained Earnings and Capital Stock
D)   Retained Earnings, Capital Stock, and DividendsE) B) and C)
F) A) and B)

Exam 2: Analyzing Transactions

An account is said to have a debit balance if

Correct AnswerverifiedShow Answer

Which group of accounts is comprised of only assets?

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Even when a trial balance is in balance, there may be errors in the individual accounts.

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The journal includes both debit and credit accounts for each transaction.

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Posting a transaction twice will cause the trial balance totals to be equal.

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Which of the following stockholder equity accounts follow the same debit and credit rules as liabilities?

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Accounts in the ledger are usually maintained in alphabetical order.

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The cash account will always be debited.

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Net income will result when

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Prepaid expenses are an example of an expense.

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A patient has a physical examination and asks the bookkeeper to mail the bill. The bookkeeper should

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What is the best explanation for this journal entry?

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Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means

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Transactions are listed in the journal chronologically.

Correct AnswerverifiedShow Answer

Which of the following entries records the receipt of a utility bill from the water company?

Correct AnswerverifiedShow Answer

In which of the following types of accounts are increases recorded by credits?

Correct AnswerverifiedShow Answer

On January 7th, Damien Lawson deposited $95,000 in a bank account in the name of JumpStart in return for shares of stock in the corporation. Prepare the journal entry to record this transaction.

Correct AnswerverifiedShow Answer

The classification and normal balance of the dividends account is

Correct AnswerverifiedShow Answer

All of the following accounts are increased with a debit except

Correct AnswerverifiedShow Answer

In which order are the accounts listed in the chart of accounts?

Correct AnswerverifiedShow Answer

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