Question 1

On a trial balance, if the Debit and Credit column totals 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) Equal debits and credits have been recorded for transactions.
E) The balance sheet would be correct.

Accepted Answer

The answer of On a trial balance, if the Debit...

Question 2

All of the following are asset accounts except:
A) Accounts Receivable.
B) Buildings.
C) Supplies expense.
D) Equipment.
E) Prepaid insurance.

Accepted Answer

Accounts Receivable, Buildings, Equipment, and Prepaid insurance are all examples of asset accounts, but Supplies expense is an expense account.

Question 3

Joe Jackson opened Jackson's Repairs, Inc. on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books:
1) Jackson invested $25,000 cash in the business.
2) Jackson contributed $100,000 of equipment to the corporation.
3) The company paid $2,000 cash to rent office space for the month.
4) The company received $16,000 cash for repair services provided during March.
5) The company paid $6,200 for salaries for the month.
6) The company provided $3,000 of services to customers on account.
7) The company paid cash of $500 for monthly utilities.
8) The company received $3,100 cash in advance of providing repair services to a customer.
Based on this information, net income for March would be:
A) $10,300.
B) $13,400
C) $5,300
D) $8,400
E) $13,500.

Accepted Answer

Net Income = Revenues - Expenses
Net Income = $16,000 (#4) - $2,000 (#3) - $6,200 (#5) + $3,000 (#6) - $500 (#7) = $10,300

Question 4

Joel Consulting received $3,000 from a customer for services provided. Joel's general journal entry to record this transaction will be:
A) Debit Services Revenue, credit Accounts Receivable.
B) Debit Cash, credit Accounts Payable.
C) Debit Cash, credit Accounts Receivable.
D) Debit Cash, credit Services Revenue.
E) Debit Accounts Payable, credit Services Revenue.

Accepted Answer

The answer of Joel Consulting received $3,000 from a customer...

Question 5

At year-end, a trial balance showed total credits exceed total debits by $4,950. This difference 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 At year-end, a trial balance showed total...

Question 6

While in the process of posting from the journal to the ledger, a company failed to post a $500 debit to the Equipment account. The effect of this error will be that:
A) The Equipment 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 error will overstate the credits listed in the journal.

Accepted Answer

The answer of While in the process of posting from...

Question 7

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

Accepted Answer

$150-15 = $135

Question 8

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.
A) Accounts Payable; Cash; Supplies.
B) Unearned Revenue; Accounts Payable; Dividends.
C) Building; Prepaid Insurance; Supplies Expense.
D) Cash; Prepaid Insurance; Equipment.
E) Notes Payable; Cash; Dividends

Accepted Answer

Only Cash, Prepaid Insurance, and Equipment are classified as asset accounts on the Chart of Accounts.

Question 9

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment 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 new oven...

Question 10

Given the following errors, identify the one by itself that 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 her 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 her 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

Option B has a $90 error (debit is $100 but credit is only $10), which will cause the trial balance to be out of balance by $90. The other options have equal debits and credits, or no affecting transaction.

Question 11

Review the transactions below and identify those that would be posted as a credit in the ledger (The first one has been done for you): A) Salary Payable was increased. B) Cash was decreased C) Equipment was increased D) Common Stock was increased E) Salaries Expense was increased F) Accounts Receivable was decreased G) Unearned Revenue was increased H) Dividends was increased I) Supplies was increased J) Building was increased K) Utilities Expense was increased L) Service Revenue was increased

Accepted Answer

The answer of Review the transactions below and identify ...

Question 12

Wiley Hill opened Hill's Repairs, Inc. on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books:
1) Wiley invested $25,000 cash in the corporation.
2) Wiley contributed $100,000 of equipment to the corporation.
3) The company paid $2,000 cash to rent office space for the month.
4) The company received $16,000 cash for repair services provided during March.
5) The company paid $6,200 for salaries for the month.
6) The company provided $3,000 of services to customers on account.
7) The company paid cash of $500 for monthly utilities.
8) The company received $3,100 cash in advance of providing repair services to a customer.
9) The company paid $5,000 cash in dividends to Wiley. (sole shareholder)
Based on this information, the balance in Stockholders' Equity reported on the Balance Sheet at the end of March would be:
A) $133,400.
B) $130,300
C) $125,300
D) $8,400
E) $13,500.

Accepted Answer

Ending Stockholders' Equity= $25,000 (#1) + $100,000 (#2) + $16,000 (#4) + $3,000 (#6) - $2,000
(#3) - $6,200 (#5) - $500 (#7) - $5,000 (#9) = $130,300
Matching Questions

Question 13

Identify the item below that would cause the trial balance to 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 Identify the item below that would cause...

Question 14

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

Accepted Answer

The answer of A $130 credit to Supplies was credited...

Question 15

Which financial statement reports an organization's financial position at a single point in time?
A) Income statement.
B) Balance sheet.
C) Statement of retained earnings.
D) Cash flow statement.
E) Trial balance.

Accepted Answer

The balance sheet reports an organization's financial position at a single point in time, usually at the end of a reporting period. The income statement reports the organization's financial performance over a period of time, such as a month or year. The statement of retained earnings shows changes in the retained earnings account over a period of time. The cash flow statement shows the organization's cash inflows and outflows over a period of time. The trial balance is not a financial statement but a tool used to ensure that debits and credits are equal in the accounting system.

Question 16

Describe what source documents are and the purpose they serve in a business.

Accepted Answer

The answer of Describe what source documents are and the...

Question 17

The business paid $100 cash dividend to Charles Nice (the sole stockholder of the corporation). Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Accepted Answer

The answer of The business paid $100 cash dividend to...

Question 18

Describe the link between a business's income statement, the statement of retained earnings, and the balance sheet.

Accepted Answer

The answer of Describe the link between a business's income...

Question 19

Explain how accounts are used in recording information about a business's transactions.

Accepted Answer

The answer of Explain how accounts are used in recording...

Question 20

Explain the recording and posting processes.

Accepted Answer

The answer of Explain the recording and posting processes....

Quiz 2: Analyzing for Business Transactions

On a trial balance, if the Debit and Credit column totals are equal, then:

All of the following are asset accounts except:

Joel Consulting received $3,000 from a customer for services provided. Joel's general journal entry to record this transaction will be:

At year-end, a trial balance showed total credits exceed total debits by $4,950. This difference could have been caused by:

While in the process of posting from the journal to the ledger, a company failed to post a $500 debit to the Equipment account. The effect of this error will be that:

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

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

Given the following errors, identify the one by itself that will cause the trial balance to be out of balance.

Review the transactions below and identify those that would be posted as a credit in the ledger (The first one has been done for you) :

Identify the item below that would cause the trial balance to not balance?

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

Which financial statement reports an organization's financial position at a single point in time?

Describe what source documents are and the purpose they serve in a business.

The business paid $100 cash dividend to Charles Nice (the sole stockholder of the corporation). Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Describe the link between a business's income statement, the statement of retained earnings, and the balance sheet.

Explain how accounts are used in recording information about a business's transactions.

Explain the recording and posting processes.