Acc Test 1 - Quiz Questions

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Assume that a firm has the following information in its analysis of its business transactions during its first year of business, fees income of 12000, an investment by the owner of 3000, salaries expense of 9000, and withdrawals of 5000. What is the total amount of owners equity that will be reported on the firms balance sheet

1000

Assume that, after analyzing its business transaction, a firm has the following ending balances: accounts payable $3,400, accounts receivable $2,000, cash $1,000, capital $3,600, equipment $3,000, prepaid rent $600, and supplies $400. What is the total amount of assets that will be reported on the firm's balance sheet?

7000

If the trial balance totals are not equal, the error may have been caused by a transposition if the difference is evenly divisible by what?

9

Which of the following statements about a journal entry is accurate? -The description is listed on the final line -The debited account(s) are indented -It is possible for all accounts in a journal entry to increase -The credited account(s) are listed after the debited account(s)

The debited account(s) are indented

Which of the following statements regarding a compound entry is accurate? -A compound entry contains two or more accounts -The total value of the debits within a compound entry must equal the total value of the credits -A compound entry must contain multiple debits and credits -A compound entry includes all credits on top, with all debits on the lines below

The total value of the debits within a compound entry must equal the total value of the credits

Which of the following statements is accurate regarding the withdrawal of cash by the owner of a company? -The withdrawal leads to an increase in owner's equity -The withdrawal leads to a decrease in owner's equity -The withdrawal leads to an increase in liabilities -The withdrawal leads to a decrease in liabilities

The withdrawal leads to a decrease in owner's equity

Which of the following is not included within a column of the balance ledger form? -posting reference -date -description -account number

account number

Which of the following accounts would decrease on the debit side of the T account? -equipment -rent expense -accounts payable -Andrew Martins, Drawing

accounts payable

Amounts that are owed to a business are known as

accounts receivable

Which of the following is not made possible through the use of the audit trail? -Locate errors -Prevent fraud -Analyze results -Trace information

analyze results

When the owner invests cash in a business?

assets and owner's equity increase

When the firm pays its utility bill upon receipt of that bill?

assets decrease and expenses increase

When the owner withdraws cash for personal use

assets decrease and owner's equity decreases

When the owner withdraws cash for personal use?

assets decrease and owner's equity decreases

When the equipment is purchased for cash?

assets, liabilities, and owner's equity are all unchanged

Carpet Co. paid cash to purchase equipment. To record the transaction, what account would be used?

debit equipment and credit cash

The journal entry to record the payment of a bill for advertising expense would include a what?

debit to advertising expense and a credit to cash

The journal entry to record the receipt of cash from clients on account would include a what?

debit to cash and a credit to accounts receivable

The journal entry to record a payment made in January for rent for the months February and March would include what?

debit to prepaid rent and a credit to cash

Which of the following types of accounts normally have debit balances?

expenses and assets

Which of the following groups contain only accounts that normally have credit balances? -Accounts receivable and fees income -Salaries expense and accounts payable -Fees income and John Smith, Capital -Accounts payable and equipment

fees income and john smith, capital

What account type is listed last within the chart of accounts?

income statement accounts

Why are the three financial statements linked together?

net income from the income statement is used on the statement of owner's equity, and the ending balance of the capital account, compared on the statement of owner's equity, is used on the balance sheet

The process of transferring data from the journal to the ledger form is known as what?

posting

The posting reference column of a journal is used for what?

record the number of the ledger account to which the information is posted

What does a single line within an amount column of a financial statement indicate?

that the amounts above it are being added or subtracted

When using a t account to determine an account balance, which of the following statements is incorrect? -A footing may be used to total a single side of the T account -The balance always appears on the side of the T account on which the account increases -The balance is placed on the side of the T account with the larger total -IF a T account contains only one amount, then the amount is the balance

the balance always appears on the side of the T account on which the account increases

Which statement is accurate? -The income statement contains only temporary accounts -The statement of owner's equity contains only real accounts -The balance sheet contains only nominal accounts -The statement of owner's equity contains only permanent accounts

the income statement contains only temporary accounts

When a business collects an account receivable

total assets do not change

When a business collects an account receivable?

total assets do not change


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