Chapter 3 Quiz

Journalizing a transaction with both the debit the credit for $87 instead of the correct amount of $78 will cause the trial balance to be out of balance.

False

Posting is the process of transferring information from the ledger to the the trial balance.

False

A journal entry affecting three or more accounts is called a:

compound entry

If you debit Prepaid Insurance, you most likely will:

credit Cash

When recording a transaction in a journal, the account listed first is always the:

debit

Conner Sales' total assets and total liabilities increased $3,400. The transaction could have been:

purchase of supplies for $3,700 with a down payment of $300 and the remainder on account

A calendar year is:

the 12-month period beginning with January

A journal is called the book of final entry.

False

A slide is evenly divisible by the number 8

False

Correctly posting a transaction twice will cause the trial balance totals to be unequal.

False

Interim statements are statements that are prepared for a minimum of 6 months of the fiscal year.

False

Sue's Book Review billed customers $550. The journal entry to record this transaction is:

Accounts Receivable, debit $550; Editing Fees, credit $550

Interim statements are prepared to:

All of these are correct. - notify management for the company's current financial position - notify investors of the company's current financial position -allow management to make changes to the business before processing year-end financial statements.

Which of the following statements is false regarding a proper journal entry?

Always listed the expenses first.

As Withdrawals increase:

Cash decreases

An overpayment was discovered in computing and paying the wages of a Plum Hollow Country Club employee. When he employee returns the amount of the overpayment, Plum Hollow should make which o the following entries?

Cash, debit; Wages Expense, credit

The twelve-month period a business chooses for its accounting period is a(n):

Fiscal Year

A slide is an error that result hen zeros have been added or deleted when writing an amount. Example: 10,000 is written as 1,000

True

A trial balance is a list of the account and their ledger balances.

True

Which of the following entries would record the payment of utility bill?

Utilities Expense, debit; Cash, credit

The general journal entry to record a payment to a creditor would most commonly include:

a debit to Accounts Payable and a credit to Cash

The journal entry to record an investment by the owner would most commonly include:

a debit to Cash and a credit to Capital

The process that begins with recording business transactions and include the completion of the financial statements is the:

accounting cycle

The first step of the accounting cycle is:

analyzing business transactions

A debit to the Accounts Receivable account was posted to an Expense Account. This would cause:

assets to be understated