Acc Test 1 - Quiz Questions
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
