Question 1

Given the trial balance amounts below, compute ending retained earnings.

A)$19,578
B)$29,578
C)$23,728
D)$49,578
E)$45,000

Accepted Answer

$30,000 + $20,000 - $422 = $49,578

Question 2

A $72,000 receipt of cash from a customer paying on their account was recorded as a $72,000 debit to Accounts Receivable.Assuming this journal entry was posted, what correcting entry (if any)is needed?
A)Debit Cash and credit Accounts Receivable for $72,000 each.
B)Debit Cash and credit Accounts Receivable for $144,000 each.
C)Credit Cash and debit Accounts Receivable for $72,000 each.
D)Credit Cash and debit Accounts Receivable for $144,000 each.
E)No correcting entry is needed for this transaction.

Accepted Answer

The answer of A $72,000 receipt of cash from a...

Question 3

Which of the following statements are true?
A)If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions.
B)The trial balance is a book of original entry.
C)Another name for trial balance is chart of accounts.
D)The trial balance is a list of all accounts from the ledger with their balances at a point in time.
E)The trial balance is another name for the balance sheet as long as debits balance with credits.

Accepted Answer

The statement that is true is D. The trial balance is a list of all accounts from the ledger with their balances at a point in time. Option A is false because while it can catch some errors, it does not catch all errors. Option B is false because the trial balance is not a book of original entry, but rather a list of accounts and their balances. Option C is false because the chart of accounts is a list of accounts used by a company, but not necessarily a list of their balances. Option E is false because the trial balance is not the same as the balance sheet, even if they have the same balances.

Question 4

A company had the following account balances at year-end: Cash……………………………………… $30,000
Accounts receivable……………………… 32,000
Accounts payable………………………… 20,000
Fees earned…………………………………..65,000
Rent expense…………………………………15,000
Insurance expense……………………………..4,800
Supplies………………………………………..5,000
Common stock……………………………….5,000
Retained earnings………………………….....14,800
Dividends………………………………… 18,000
If all of the accounts have normal balances, what are the total debits on the trial balance?
A)$45,200
B)$67,000
C)$104,800
D)$209,600
E)$186,600

Accepted Answer

The answer of A company had the following account balances...

Question 5

In which of the following situations would the trial balance not balance?
A)A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash.
B)The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable.
C)A $50 cash receipt for the performance of a service was not recorded at all.
D)The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200.
E)The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750.

Accepted Answer

The answer of In which of the following situations would...

Question 6

If the Debit and Credit column totals of a trial balance are equal, then:
A)All transactions have been recorded correctly.
B)All entries from the journal have been posted to the ledger correctly.
C)All ledger account balances are correct.
D)The total debit entries and total credit entries are equal.
E)The balance sheet would be correct.

Accepted Answer

The equality of debit and credit column totals in a trial balance only ensures that the total debit entries and total credit entries are equal. It does not guarantee the accuracy of individual transactions, the correct posting of all journal entries to the ledger, the correctness of all ledger account balances, or the accuracy of the balance sheet.

Question 7

Of the following errors, which one will cause the trial balance to be out of balance?
A)A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense.
B)A $100 cash receipt from a customer in payment of his account posted as a $100 debit to Cash and a $10 credit to Accounts Receivable.
C)A $75 cash receipt from a customer in payment of his account posted as a $75 debit to Cash and a $75 credit to Cash.
D)A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash.
E)An $800 prepayment from a customer for services to be rendered in the future was posted as an $800 debit to Unearned Revenue and an $800 credit to Cash.

Accepted Answer

The answer of Of the following errors, which one will...

Question 8

According to IFRS, comparative information on financial statements is:
A)Not required.
B)Required for publicly traded companies only.
C)Required for the preceding period only.
D)Required for the last five years.
E)Not required, but considered a hallmark for companies of excellence.

Accepted Answer

Under IFRS, comparative information is required for the preceding year only. This means that the financial statements must include information for the current year and the preceding year, with corresponding figures for the preceding year. However, additional comparative information may be included voluntarily.

Question 9

Which of the following is a TRUE statement concerning a company's financial statements?
A)Balance sheet and income statement data combined contain the complete financial picture of a given company.
B)A trial balance is another name for a balance sheet.
C)Another name for the income statement is the earnings statement.
D)Dividends paid to a company's shareholders are shown on the income statement.
E)The balance sheet shows the financial position of a company for a period of time.

Accepted Answer

The answer of Which of the following is a TRUE...

Question 10

Which of the following accounts is a balance sheet account?
A)Wages Payable
B)Operating Activities
C)Revenues
D)Dividends
E)Expenses

Accepted Answer

Wages Payable is a liability account and is found on the balance sheet. The other choices are income statement accounts.

Question 11

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

A)$291,340
B)$106,962
C)$198,730
D)$218,730
E)$221,580

Accepted Answer

$116,640 + $1,500 + $3,200 + $22,450 + $23,300 + $31,640 = $198,730

Question 12

A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n):
A)Account balance
B)Trial balance
C)Ledger
D)Chart of accounts
E)General journal

Accepted Answer

A trial balance is specifically designed to list all accounts and their respective balances in a way that ensures that the total debits equal the total credits. This is important as it acts as a preliminary check to ensure that there are no errors in the accounting system before moving on to financial statements.

Question 13

A company failed to post a $50 debit to the Office Supplies account.The effect of this error will be that:
A)The Office Supplies account balance will be overstated.
B)The trial balance will not balance.
C)The error will overstate the debits listed in the journal.
D)The total debits in the trial balance will be larger than the total credits.
E)The trial balance will be in balance.

Accepted Answer

The answer of A company failed to post a $50...

Question 14

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

Accepted Answer

The answer of A trial balance taken at year-end showed...

Question 15

A $15 credit to Sales was posted as a $150 credit.By what amount is Sales in error?
A)$150 understated
B)$135 overstated
C)$150 overstated
D)$15 understated
E)$135 understated

Accepted Answer

The error made was posting a $150 credit instead of the correct $15 credit, resulting in Sales being overstated by the difference between the two amounts, which is $135.

Question 16

What would be the account balance in the Service Revenue account after the following transactions, assuming a zero beginning balance? 
A)$17,400
B)$10,900
C)$14,400
D)$ 9,000
E)$15,900

Accepted Answer

The answer of What would be the account balance in...

Question 17

A $130 credit to Office Equipment was credited to Fees Earned by mistake.By what amounts are the accounts under- or overstated as a result of this error?
A)Office Equipment, understated $130; Fees Earned, overstated $130.
B)Office Equipment, understated $260; Fees Earned, overstated $130.
C)Office Equipment, overstated $130; Fees Earned, overstated $130.
D)Office Equipment, overstated $130; Fees Earned, understated $130.
E)Office Equipment, overstated $260; Fees Earned, understated $130.

Accepted Answer

The answer of A $130 credit to Office Equipment was...

Question 18

What would be the account balance in the Service Revenue account after the following transactions, assuming a zero beginning balance?? 
A)$17,400 credit
B)$14,400 credit
C)$14,400 debit
D)$15,900 credit
E)$15,900 debit

Accepted Answer

The transactions are not provided, so we cannot determine the specific amounts of revenue earned. However, if the Service Revenue account has a zero beginning balance and all transactions during the given period were revenue earned, then the account balance would be the total amount of revenue earned during that period, which would be reflected as a credit balance. Therefore, the only option that represents a credit balance is (D) $15,900 credit.

Question 19

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?
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.

Accepted Answer

The answer of The credit purchase of a delivery truck...

Question 20

Accountants at Amalgamated Corporation incorrectly journalized a $50,000 equipment purchase as a debit to Buildings.This error was not discovered before the journal entry was posted.What is the correcting entry?
A)Debit Buildings and credit Equipment for $50,000 each.
B)Debit Equipment and credit Buildings for $50,000 each.
C)Debit Buildings and credit Equipment for $100,000 each.
D)Debit Equipment and credit Buildings for $100,000 each.
E)Debit Equipment for $100,000 and credit Buildings for $50,000.

Accepted Answer

The incorrect entry debited Buildings instead of Equipment, resulting in an overstatement of Buildings and an understatement of Equipment. To correct this, the entry should debit Equipment and credit Buildings for the same amount of $50,000 each. This will decrease Buildings and increase Equipment to reflect the correct balances. Options A, C, D and E do not correct the error properly.

Quiz 15: Basic Accounting for Transactions

Given the trial balance amounts below, compute ending retained earnings.

A $72,000 receipt of cash from a customer paying on their account was recorded as a $72,000 debit to Accounts Receivable.Assuming this journal entry was posted, what correcting entry (if any) is needed?

Which of the following statements are true?

In which of the following situations would the trial balance not balance?

If the Debit and Credit column totals of a trial balance are equal, then:

Of the following errors, which one will cause the trial balance to be out of balance?

According to IFRS, comparative information on financial statements is:

Which of the following is a TRUE statement concerning a company's financial statements?

Which of the following accounts is a balance sheet account?

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

A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n) :

A company failed to post a $50 debit to the Office Supplies account.The effect of this error will be that:

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

A $15 credit to Sales was posted as a $150 credit.By what amount is Sales in error?

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

A $130 credit to Office Equipment was credited to Fees Earned by mistake.By what amounts are the accounts under- or overstated as a result of this error?

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

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?

Accountants at Amalgamated Corporation incorrectly journalized a $50,000 equipment purchase as a debit to Buildings.This error was not discovered before the journal entry was posted.What is the correcting entry?