Accounting Final Ch. 2

The chart of account for the Corning Company includes some of the following accounts: Cash- 11 Accounts receivable- 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Corning, Capital 31 Corning, Drawing 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 On the journal page 3, the following transaction was found: Prepaid Insurance 1,530 Cash 1,530 What is the post reference that will be found on the cash account? a. 11 b. 15 c. 3 d. None

3

Which of the following accounts would be increased with a credit? a. Land, Accounts Payable, Drawing b. Accounts Payable, Unearned revenue, Collins Capital c. Collins Capital, Accounts Receivable, Unearned Revenue d. Cash, Accounts Receivable, Collins Capital

Accounts payable, unearned revenue, Collins Capital

An overpayment error was discovered in computing and paying the wages of a Jamison Tree Trimming employee. When Jamison receives cash from the employee for the amount of the overpayment, which of the following entries will Jamison make? 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

Cash, debit; wage expense, credit

Joshua Scott invests $40,000 into his new business. How would the journal entry for his transaction be entered in the journal? a. Cash 40,000 Joshua Scott, Capital 40,000 Invested cash in business b. Cash 40,000 Joshua Scott, Capital 40,000 Invested cash in business c. Joshua Scott, Capital 40,000 Cash 40,000 Invested cash in business d. Joshua Scott, Loan 40,000 Cash 40,000 Invested cash in business

Cash- 40,000 Joshua Scott, Capital- 40,000 Invested cash in business

The trial balance is out of balance and the accountant suspects that a transposition or slide error has occurred. What will the accountant do to find the error? a. Determine the amount of the error and look for that amount on the trial balance. b. Determine the amount of the error and divide by two, then look for that amount on the trial balance. c. Determine the amount of the error and refer to the journal entries for that amount. d. Determine the amount of the error and divide by nine. If the result is evenly divided, then this type of error is likely.

Determine the amount of the error and divide by nine. If the result is evenly divided, then this type of error is likely.

All of the following occur with a double-entry accounting system except: a. The accounting equation remains in balance. b. The sum of all debits is always equal to the sum of all credits in each journal entry. c. Each business transaction will have only two entries. d. Every transaction affects at least two accounts.

Each business transaction will have only two entries

May 24 Land- 105,000 Cash- 105,000 Purchased land for business. What effects does this journal entry have on the accounts? a. Increase Cash and increase Land b. Increase Land and decrease Cash c. Decrease Cash and decrease Land d. Increase Cash and decrease Land

Inc Land and dec Cash

Which of the following is true about a T-account? a. Left hand side of the T-Account is called a debit. b. Left hand side of the T-Accounts is called a credit c. Right hand side of the T-Account is called a debit d. None are true.

Left hand side of the T-account is called a debit

Which of the following will increase owner's equity? a. Expenses > revenues b. the owner draws money for personal use c. Revenues > expenses d. Cash is received from customers on account.

Revenues> expenses

Which of the following is true regarding normal balances of accounts? a. All accounts have a normal debit balance. b. The normal balance of all accounts will have either a positive or negative balance. c. Accounts that have a normal debit balance will only have debit entries, never credit entries. d. The normal balance is the side of the account that increases the account.

The normal balance is the side of the account that increases the account

A list of the accounts is called ledger chart of accounts T-Account Debit

chart of accounts

The posting process will include the transfer of the following info from the journal to the account a. date, amount (debit or credit) b. date, amount (debit or credit), journal page number c. amount (debit or credit), account number d. date, amount (debit or credit) account number

date, amount (debit or credit), journal page number

which of the following entries records the receipt of a utility bill from the water company? a. debit Utilities Expense; credit Accounts Payable b. debit Utilities Payable; credit Accounts Receivable c. debit Accounts Payable; credit Cash d. debit Accounts Payable; credit Utilities Payable

debit Utilities Expense; credit Accounts Payable

In which of the following types of accounts are decreases recorded by credits liabilities owner's capital drawing revenues

drawing

Which of the following applicants of the rules of debits and credit is true? a. decrease Prepaid Insurance with a credit and the normal balance is a credit b. increase Accounts Payable with a credit and the normal balance is a debit c. increase Supplies Expense with a debit and the normal balance is a debit d. decrease Cash with a debit and the normal balance is a credit

increase supplies expense with a debit and the normal balance is a debit

The chart of accounts is designed to a. alphabetize the accounts to make reading easier for its financial statement users. b. analyze the accounts and organize them in order of dollar amount to simplify the accounting information for users. c. summarize the transactions and determine their ending balances. d. meet the information needs of a company and other financial statement users.

meet the info needs of a company and other financial statement users

Which of the following types of accounts have a normal credit balance? a. assets and liabilities b. liabilities and expenses c. revenues and liabilities d. capital and drawing

revenue and liabilities

Which of the following describes the classification and normal balance of the fees earned account? asset, credit liability, credit owner's equity, debit revenue, credit

revenue, credit

A debit signifies a decrease in assets expenses drawing revenues

revenues

Net income will result when a. revenues (credits) > expenses (debits) b. revenues (debits) > expenses (credits) c. expenses (credits) = revenues (debits) d. revenues (credits) = expenses (debits)

revenues (credits)>expenses(debits)

In which of the following types of accounts are increases recorded by credits? revenues and liabilities drawing and assets liabilities and drawing expenses and liabilities

revenues and liabilities

Supplies purchased on account were incorrectly recorded as Office Equipment. The correcting entry would be a. Supplies, debit; Office Equipment, credit. b. Accounts Receivable, debit; Supplies, credit. c. Office Equipment, debit; Supplies Expense, credit. d. Supplies, debit; Accounts Payable, credit.

supplies, debit; office equipment, credit

An account is said to have a debit balance if a.the amount of the debits exceeds the amount of the credits b. there are more entries on the debit side than on the credit side c. there are more entries on the credit side than on the debit side d. the first entry of the accounting period was posted on the debit side

the amount of debits exceeds the amount of the credits

Total dollar amount of the debits equal the total dollar amount of the credits in the ledger can be verified through: ledger trial balance account balance sheet

trial balance

The chart of accounts is a. the same as a balance sheet b. usually a listing of accounts in alphabetical order c. usually a listing of accounts in financial statement order d. used in place of a ledger

usually a listing of accounts in financial statement order