Question 1

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 2

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 cause...

Question 3

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?
$\begin{array}{|l|l|}
\hline\text { Performed services and left a bill. } & \$ 4,200 \
\hline \text { Performed services and collected immediately. } & \$ 3,500 \
\hline \text { Performed services and billed customer. } & \$ 2,200 \
\hline \text { Performed services on account. } & \$ 6,000 \
\hline \text { Received partial payment on account. } & \$ 1,500\
\hline
\end{array}$

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 4

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 journal entry was a debit to Buildings, which means that the Buildings account was overstated by $50,000. To correct this error, we need to make a journal entry that debits the correct account (Equipment) and credits the overstated account (Buildings) for the same amount. Therefore, the correct entry is to Debit Equipment and credit Buildings for $50,000 each. Option B is the only one that correctly reflects this correction. Options A and C suggest doubling the correction, which would overstate both accounts by another $50,000. Option D suggests reversing the original entry, which would be incorrect. Option E suggests overcorrecting the error by debiting Equipment for $100,000, which is twice the correct amount.

Question 5

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 6

What are the total assets shown on the trial balance below?
Common stock……$120,000 Accounts payable…...$25,000
Cash……………….$116,640 Accounts receivable..$22,450
Supplies………… $ 1,500 Office equipment…...$23,300
Prepaid rent……....$ 3,200 Unearned revenue….$ 4,152
Service revenue.....$ 20,000 Utilities expense…....$ 422
Retained earnings...$ 30,000 Shaving equipment… $31,640
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 7

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

Accounts Payable correct post [$4,700 credit] - actual post [$4,700 debit] = $9,400 too few credits

Question 8

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

A. Total debits and credits are still in balance.
B. Net income or net loss will not cause an error in the trial balance.
C. Correct amount [$49,500] - Amount entered [$4,950] = $44,550 error.
D. Correct amount [$5,500] - Amount entered [$550] = $4,950 error.
E. Correct amount [$4,950 credit] - Amount entered [$4,950 debit] = $9,900 error.

Question 9

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance??
$\begin{array}{|l|l|}
\hline\text { Performed services and left a bill. } & \$ 4,200 \
\hline \text { Performed services and collected immediately. } & \$ 3,500 \
\hline \text { Performed services and billed customer. } & \$ 2,200 \
\hline \text { Performed services on account. } & \$ 6,000 \
\hline \text { Received partial payment on account. } & \$ 1,500\
\hline
\end{array}$

A) $17,400 credit
B) $14,400 credit
C) $14,400 debit
D) $15,900 credit
E) $15,900 debit

Accepted Answer

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

Question 10

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 11

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 period only. This means that financial statements must present information for the current period and the preceding period, allowing for better comparison and analysis of the company's financial performance.

Question 12

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

What should have been posted [$15] - Amount posted [$150] = $135 too much

Question 13

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 14

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 accounts and their balances in a way that ensures the total of all debit balances equals the total of all credit balances. This serves as an internal check to ensure that the accounting records are accurate and complete. A account balance is too broad and may not necessarily imply the need for this kind of internal check, a ledger is a record of all transactions for a specific account and does not provide a summary of all account balances. A chart of accounts is a list of all accounts used in an accounting system and does not provide balances. A general journal is a record of all transactions, but again does not provide a summary of account balances.

Question 15

Given the trial balance amounts below,compute ending retained earnings.
Common stock…….$120,000 Accounts payable…...$25,000
Cash………………..$116,640 Accounts receivable.$22,450
Supplies………........$ 1,500 Office equipment…...$23,300
Prepaid rent……….$ 3,200 Unearned revenue….$ 4,152
Service revenue…...$ 20,000 Utilities expense…....$ 422
Beginning Shaving equipment… $31,640
Retained earnings..$ 30,000
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 16

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 reported on the balance sheet.

Question 17

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

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Question 18

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 trial balance is a list of all accounts with their balances from the ledger at a specific point in time. It is used to ensure that the total debit balances equal the total credit balances in the ledger, but it does not guarantee that no errors have been made. It is not a book of original entry and is not the same thing as the chart of accounts. It is also not the same thing as the balance sheet, which is a financial statement that shows the assets, liabilities, and equity of the business at a specific point in time.

Question 19

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 20

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 error will cause the trial balance to not balance because the total debits will not equal the total credits.

Quiz 2: Analyzing and Recording Transactions

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?

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

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

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

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

According to IFRS,comparative information on financial statements is:

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

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

Which of the following accounts is a balance sheet account?

Which of the following statements are true?

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

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