Question 1

If Rent Expense has been debited,it is likely that:
A)the rent was paid for three months in advance.
B)a copy of the lease was received.
C)this month's rent was paid.
D)All of these are possible.

Accepted Answer

If Rent Expense has been debited, it means that the company has paid rent for the current month. Option A and B are possible but not always the case when Rent Expense is debited.

Question 2

If Cash has been debited,it is likely that:
A)the owner made an investment.
B)a charge customer made a payment.
C)the business borrowed cash from the bank.
D)All of these are possible.

Accepted Answer

When cash is debited, it means an increase in the cash balance. This can happen in several scenarios: when the owner invests more money into the business, when a customer pays off their credit, or when the business takes out a loan from the bank. All these actions result in an increase in the cash account, hence the debit entry.

Question 3

The proper format for a journal entry includes all of the following,except:
A)the total amounts of debits must equal the total amount of credits.
B)skip a line between transactions.
C)the credit portion of the transaction is always first.
D)listed in chronological order.

Accepted Answer

The credit portion of the transaction is not always listed first. It depends on whether the transaction involves a debit or a credit. Sometimes the debit portion of the transaction is listed first. Everything else listed in the question is correct.

Question 4

Interim statements are statements that are usually prepared for a portion of the business's fiscal year.

Accepted Answer

Interim statements are prepared for a portion of the business's fiscal year, typically for a quarter or half-year. They provide insight into the financial performance of the company during that period of time.

Question 5

An overpayment was discovered in computing and paying the wages of a Plum Hollow Country Club employee.When the employee returns the amount of the overpayment,Plum Hollow should make which of the following entries?
A)Cash,debit;Wages Expense,credit
B)Wages Payable,debit;Wages Expense,credit
C)Wages Expense,debit;Cash,credit
D)Cash,debit;Wages Payable,credit

Accepted Answer

The answer of An overpayment was discovered in computing and...

Question 6

If Accounts Payable has been credited,it is most likely that:
A)a payment was made on account.
B)a purchase was made on account.
C)a correcting entry was made for the overstatement of the purchase of equipment on account.
D)a customer paid a bill on account.

Accepted Answer

When Accounts Payable is credited, it typically indicates that a liability has been incurred, such as when a purchase is made on account.

Question 7

If Capital has been credited,it is likely that:
A)services were provided to a cash customer.
B)services were provided to a charge customer.
C)the owner made an investment.
D)a payment was made on account.

Accepted Answer

When capital is credited, it means that money has been added to the owner's equity account. This can happen when the owner makes an investment into the business, which increases the amount of capital the business has available. Options A, B, and D relate to services provided or payments made, but do not necessarily involve an increase in the owner's equity account.

Question 8

Which of the following statements is false regarding a proper journal entry?
A)Debits are always listed first in the entry.
B)Credits are always indented.
C)Skip a line between transactions.
D)Always list the expenses first.

Accepted Answer

Expenses are not always listed first in a journal entry. The order of accounts and whether they are listed as debits or credits depends on the specific transaction being recorded.

Question 9

A fiscal year is always January 1 through December 31.

Accepted Answer

A fiscal year can vary depending on the organization or government. While many use the calendar year of January 1 through December 31, others may use different 12-month periods, such as July 1 through June 30 or October 1 through September 30.

Question 10

If Prepaid Rent has been debited,it is likely that:
A)the rent was paid for three months in advance.
B)a bill for the past month's rent was received.
C)this month's rent was paid.
D)All of these are possible.

Accepted Answer

Prepaid Rent is an advance payment of rent and is recorded as a debit because rent expense has not yet been incurred. Therefore, if Prepaid Rent has been debited, it is likely that the rent was paid for three months in advance.

Question 11

Which of the following accounts would be credited in a proper journal entry?
A)Cash when it is increased
B)Accounts Receivable when it is increased
C)Capital when it is decreased
D)Accounts Payable when it is increased

Accepted Answer

When Accounts Payable is increased, it means the company owes money to someone else, and therefore the liability account of Accounts Payable should be credited.

Question 12

Insurance paid in advance is an expense.

Accepted Answer

Insurance paid in advance is considered a prepaid expense, which is an asset on the balance sheet until it is consumed or the coverage period expires.

Question 13

If Accounts Payable has been debited,it is most likely that:
A)a payment was made on account.
B)a purchase was made on account.
C)a charge customer made a payment.
D)an expense was paid with cash.

Accepted Answer

When Accounts Payable is debited, it indicates a reduction in the liability, which typically occurs when a payment is made on account, thus settling or reducing the amount owed to a creditor.

Question 14

Transactions are listed in chronological order in the journal.

Accepted Answer

Transactions are recorded in the journal in the order in which they occur, which is typically chronological.

Question 15

If Fees Earned has been credited,it is most likely that:
A)services were provided.
B)the owner made an investment.
C)a correcting entry for the overstatement of revenue was recorded.
D)All of these are possible.

Accepted Answer

Fees Earned is a revenue account that is used to record the amount of revenue earned by providing services to customers. Therefore, if Fees Earned has been credited, it is most likely that services were provided. The other options, such as the owner making an investment or a correcting entry for the overstatement of revenue, are not related to the Fees Earned account.

Question 16

The time period for which an income statement is prepared is called the accounting period.

Accepted Answer

The accounting period is the time period for which financial statements like income statement, balance sheet, and cash flow statement are prepared.

Question 17

The general journal entry to record a payment to a creditor would most commonly include:
A)a debit to Accounts Payable and a credit to Cash.
B)a debit to Capital and a credit to Cash.
C)a debit to Supplies and a credit to Cash.
D)a debit to Cash and a credit to Accounts Payable.

Accepted Answer

When you pay a creditor, you decrease your liability (Accounts Payable) with a debit and decrease your asset (Cash) with a credit.

Question 18

To find an explanation for a transaction,look in the:
A)income statement.
B)balance sheet.
C)journal.
D)trial balance.

Accepted Answer

The journal is where all transactions are recorded in chronological order and includes an explanation for each transaction.

Question 19

A journal is called the book of final entry.

Accepted Answer

A journal is known as the book of original entry, where transactions are recorded for the first time. The book of final entry is the ledger, where journal entries are posted to individual accounts.

Question 20

The general journal entry to record the earning of revenue would most commonly include:
A)a debit to Accounts Receivable and a credit to Capital.
B)a debit to Cash and a credit to Capital.
C)a debit to Fees Earned and a credit to Cash.
D)a debit to Accounts Receivable and a credit to Fees Earned.

Accepted Answer

The correct journal entry for recording the earning of revenue on account (not yet received in cash) involves debiting Accounts Receivable (to record the amount owed by the customer) and crediting Fees Earned (or a similar revenue account) to recognize the revenue earned. This reflects the increase in assets (Accounts Receivable) and the increase in owner's equity (through revenue).

Quiz 3: Beginning the Accounting Cycle

If Rent Expense has been debited,it is likely that:

If Cash has been debited,it is likely that:

The proper format for a journal entry includes all of the following,except:

Interim statements are statements that are usually prepared for a portion of the business's fiscal year.

An overpayment was discovered in computing and paying the wages of a Plum Hollow Country Club employee.When the employee returns the amount of the overpayment,Plum Hollow should make which of the following entries?

If Accounts Payable has been credited,it is most likely that:

If Capital has been credited,it is likely that:

Which of the following statements is false regarding a proper journal entry?

A fiscal year is always January 1 through December 31.

If Prepaid Rent has been debited,it is likely that:

Which of the following accounts would be credited in a proper journal entry?

Insurance paid in advance is an expense.

If Accounts Payable has been debited,it is most likely that:

Transactions are listed in chronological order in the journal.

If Fees Earned has been credited,it is most likely that:

The time period for which an income statement is prepared is called the accounting period.

The general journal entry to record a payment to a creditor would most commonly include:

To find an explanation for a transaction,look in the:

A journal is called the book of final entry.

The general journal entry to record the earning of revenue would most commonly include: