Chapter 3 Quiz

Thomas' Dry Wall completed work on a house. Thomas received $3,500 when he finished the job and will receive the balance of $1,500 in 30 days. How much revenue should he record? $3,500 $1,500 $5,000 $0

$5,000

Listed below are steps in the accounting cycle. Choose the answer that represents the correct sequence. 1. Prepare a trial balance. 2. Record transactions in a journal. 3. Analyze the effect of an accounting transaction. 4. Post to the general ledger. 1, 2, 3, 4 2, 4, 3, 1 4, 2, 1, 3 3, 2, 4, 1

3, 2, 4, 1

Which of the following is not an advantage of using a journal? A journal provides a place to write an explanation of the transaction. Amounts from the journal can be transferred to the trial balance. Since debit and credit parts of an entry are in one place, it is easier to locate recording errors. A journal allows us to see transactions in chronological order.

Amounts from the journal can be transferred to the trial balance.

The entry to record the investment of cash in a business by the owner involves a debit to the owner's capital account and a credit to the Cash account. owner's drawing account and a credit to the Cash account. Cash account and a credit to the owner's drawing account. Cash account and a credit to the owner's capital account.

Cash account and a credit to the owner's capital account.

Recording the purchase of delivery equipment on account involves a debit to the Accounts Payable account and a credit to the Delivery Equipment account. Cash account and a credit to the Delivery Equipment account. Delivery Equipment account and a credit to the Accounts Payable account. Delivery Equipment account and a credit to the Cash account.

Delivery Equipment account and a credit to the Accounts Payable account.

The owner of a business purchases equipment by making a down payment with the balance owed on account. This transaction is recorded by debiting the Equipment account and crediting the Cash account and the Accounts Payable account. Equipment account and the Accounts Payable account and crediting the Cash account. Cash account and the Equipment account and crediting the Accounts Payable account. Cash account and the Accounts Payable account and crediting the Equipment account.

Equipment account and crediting the Cash account and the Accounts Payable account.

Which of the following statements is true regarding the chart of accounts? It is a directory of accounts used in the business. It can be used in place of journals. It can be used in place of a ledger. It is only appropriate for large companies.

It is a directory of accounts used in the business.

Which of these lists accurately reflects the sequence followed when recording transactions? General journal, general ledger, trial balance, source documents Source documents, general journal, general ledger, trial balance Trial balance, source documents, general ledger, general journal General ledger, general journal, source documents, trial balance

Source documents, general journal, general ledger, trial balance

What entry is made to record the receipt of cash from customers for services provided today? The Service Revenue account is debited, and the owner's capital account is credited. The Cash account is debited, and the Service Revenue account is credited. The Service Revenue account is debited, and the Cash account is credited. The Cash account is debited, and the owner's capital account is credited.

The Cash account is debited, and the Service Revenue account is credited.

What entry is made to record the payment of utilities for the month? The Cash account is debited, and the Utilities Expense account is credited. The Cash account is debited, and the owner's capital account is credited. The Utilities Expense account is debited, and the Cash account is credited. The Utilities Expense account is debited, and the owner's capital account is credited.

The Utilities Expense account is debited, and the Cash account is credited.

What does a balanced trial balance prove? No math errors have been made. The debit balances are equal to the credit balances. No recording errors were made. No posting errors were made.

The debit balances are equal to the credit balances.

When the new balance of an account is calculated, a debit posting is added if the account has a credit balance. a credit posting is subtracted if the account has a credit balance. a debit posting is subtracted if the account has a debit balance. a debit posting is subtracted if the account has a credit balance.

a debit posting is subtracted if the account has a credit balance.

Another name for a journal is the book of final entry. book of original entry. trial balance. general ledger.

book of original entry.

When a business transaction requires entries to more than one debit or more than one credit, it is called a complex entry. compound entry. standard entry. circular entry.

compound entry.

Ellen started her business by investing $2,500 cash. The correct journal entry to record this transaction is debit Accounts Payable $2,500 and credit Owner's Capital $2,500. debit Owner's Capital $2,500 and credit Accounts Receivable $2,500. debit Cash $2,500 and credit Owner's Capital $2,500. debit Owner's Capital $2,500 and credit Cash $2,500.

debit Cash $2,500 and credit Owner's Capital $2,500.

Thomas' Dry Wall completed work on a house. Thomas received $3,500 when he finished the job and will receive the balance of $1,500 in 30 days. The correct journal entry to record this event is debit Cash $3,500 and credit Service Revenue $3,500. debit Accounts Receivable $5,000 and credit Cash $3,500 and Service Revenue $1,500. debit Cash $3,500 and credit Accounts Receivable $1,500 and Service Revenue $5,000. debit Cash $3,500 and Accounts Receivable $1,500 and credit Service Revenue $5,000.

debit Cash $3,500 and Accounts Receivable $1,500 and credit Service Revenue $5,000.

Joshua invested $7,500 cash to start his business. The correct journal entry would be debit Cash $7,500 and credit Owner's Capital $7,500. debit Owner's Capital $7,500 and credit Owner's Drawing $7,500. debit Owner's Capital $7,500 and credit Accounts Payable $7,500. debit Cash $7,500 and credit Owner's Drawing $7,500.

debit Cash $7,500 and credit Owner's Capital $7,500.

Denise bought a new computer valued at $3,000. She paid $1,000 down and will pay the balance in 90 days. The correct journal entry to record this purchase is debit Cash $3,000 and credit Computer Equipment $3,000. debit Computer Equipment $3,000 and credit Cash $1,000 and Accounts Payable $2,000. debit Computer Equipment $3,000 and credit Owner's Capital $3,000. debit Computer Equipment $2,000 and Cash $1,000 and credit Accounts Payable $3,000.

debit Computer Equipment $3,000 and credit Cash $1,000 and Accounts Payable $2,000.

The journal entry to record the withdrawal of $250 by Lisa from her business is debit Salaries Expense $250 and credit Cash $250. debit Owner's Drawing $250 and credit Cash $250. debit Cash $250 and credit Owner's Capital $250. debit Accounts Payable $250 and credit Owner's Drawing $250.

debit Owner's Drawing $250 and credit Cash $250.

Recording the purchase of office supplies on account requires a credit to the Office Supplies account. credit to the Cash account. debit to the Office Supplies account. debit to the Accounts Payable account.

debit to the Office Supplies account.

When Erica's Salon pays the rent, the bookkeeper will initially debit Rent Expense in the ledger. in the journal. on the trial balance. on the income statement.

in the journal.

Transactions are first recorded in the trial balance and then posted to the journal. journal and then posted to the trial balance. journal and then posted to the ledger. ledger and then posted to the trial balance.

journal and then posted to the ledger.

The book of original entry is the four-column account. journal. ledger. trial balance.

journal.

The term used for transferring information from the journal to the ledger is transference. transposing. posting. referencing.

posting.

The P.R. column in a general journal is used to trace the entry to the financial statements. show the account that the transaction was posted to in the general ledger. trace the transaction to the original book of entry. show which employee posted the record to the general ledger.

show the account that the transaction was posted to in the general ledger.

The trial balance is prepared from source documents. the balance sheet. the general journal. the general ledger.

the general ledger.

When the owner withdraws cash for personal use, the owner's capital account is debited and the Cash account is credited. the owner's drawing account is debited and the Cash account is credited. the owner's capital account is debited and the owner's drawing account is credited. the Cash account is debited and the owner's capital account is credited.

the owner's drawing account is debited and the Cash account is credited.

The P.R. column in the general ledger is used to trace the entry to the book of final entry. show the account to which the transaction was posted in the general ledger. trace the transaction to the original book of entry. show which employee posted the record to the general ledger.

trace the transaction to the original book of entry.