Accounting Chapter 3 Questions

A statement that lists all accounts and related balances, that is prepared after transactions have been recorded, and which tests the accuracy of total debits and total credits is called the _____________. Multiple choice question. double-entry system balance sheet trial balance chart of accounts

Trial balance

True or false: Recording a debit for one amount and a credit for a different amount in a journal entry will result in the trial balance debit and credit columns to not be in balance.

True

Identify the correct statements: Multiple select question. assets increase on the left (debit) side liabilities increase on the right (credit) side owner's equity decrease on the left (debit) side liabilities decrease on the right (credit) side

assets increase on the left (debit) side liabilities increase on the right (credit) side owner's equity decrease on the left (debit) side

A list of the accounts used by a business to record its financial transactions is called the _________________.

chart of accounts

Identify the correct steps to prepare a trial balance: Multiple select question. enter the ending balances of each account in the appropriate debit or credit column enter the trial balance heading sum the total debits with total credits list the accounts names in alphabetical order total the debit column; total the credit column

enter the ending balances of each account in the appropriate debit or credit column enter the trial balance heading total the debit column; total the credit column

Identify which items are on the income statement:

expenses revenues net income

Identify which of the following correctly describes a T-Account Multiple select question. Increases to accounts are recorded on the left hand column Accountants use T accounts to analyze transactions The name of the account is written on the horizontal (top) line Referred to as a T-account because of its relationship to transactions Consists of a vertical line and a horizontal line that resembles the letter T

Accountants use T accounts to analyze transactions Consists of a vertical line and a horizontal line that resembles the letter T The name of the account is written on the horizontal (top) line

Best Consulting Co. issued a check for $1,000 to an office supply vendor in partial payment of an open account balance. This transaction would be recorded with a debit entry to the _________ account: Multiple choice question. office supplies office supplies expense accounts payable cash

Accounts payabel

An entry on the left-hand side of a T account is called a

Debit

An entry on the left-hand side of a T account is called a: Multiple choice question. credit decrease increase debit

Debit

An entry on the left-hand side of a T account is called a: Multiple choice question. decrease increase debit credit

Debit

A company completed services and billed customers for $800. This transaction would (debit/credit) the accounts receivable account, and (debit/credit) the fees income account.

Debit Credit

A company completed services and billed customers for $800. This transaction would (debit/credit) the accounts receivable account, and (debit/credit) the fees income account

Debit Credit

A(n) (increase/decrease) _______ to the cash account is shown on the right-hand side of the T account

Decrease

A company purchased equipment for $2,000 on account. The balance is due in 90 days. This transaction would debit the _______account, and credit the ________ account.

Equipment Accounts payable

True or false: Account balances normally appear on the decrease side of the account.

False

True or false: A list of the accounts used by a business to record financial transactions is called the trial balance.

False (called chart of accounts)

When analyzing accounts receivable:

Increases - Are shown on the left-hand side of the T account. Decreases - Are shown on the right-hand side of the T account

When analyzing a prepaid rent account

Increases are shown on the left hand side of the t account Decreases are shown on the right hand side of the t account

When analyzing an equipment account

Increases are shown on the left-hand side of the T account Decreases are shown on the right-hand side of the T account

An account that is kept open from one accounting period to the next, such as cash, is called a _______ account.

Permanent

An accounting error involving a misplaced decimal point is called a error.

Slide

Match the following accounting errors to the correct definition:

Slide - Choice980.00 instead of 98.00 Transposition - Choice45.00 instead of 54.00

Net income appears on which two financial statements? Multiple select question. balance sheet statement of owner's equity income statement

Statement of owners equity Income statement

Arrange the following sections of the income statement in the correct order.

Title Revenue Expenses Net income

An error where numbers are switched, for example, entering 120 instead of 210, is called a: Multiple choice question. double-entry footing slide transposition

Transposition

Identify which of the following items are on the statement of owner's equity. Multiple select question. Revenue Capital, Beginning Balance Total Liabilities Net Income Withdrawals Total Assets

Capital, Beginning Balance Net Income Withdrawals

Helen Jone's Hair Salon collects $800 cash for services provided during the day. This transaction would be recorded with a debit entry on the left-hand side of which account:

Cash

A company pays office salaries of $3,200. This transaction would (debit/credit) the cash account, and (debit/credit) the salaries expense account.

Credit Debit

Identify which statements are correct: (Check all that apply). Multiple select question. owner's equity accounts show the property a business controls liability accounts show the debts of the business assets accounts show the property a business owns

liability accounts show the debts of the business assets accounts show the property a business owns

Common errors that cause the trial balance debit and credit columns not to balance include (select all that apply): Multiple select question. making an error when calculating the account balance recording an amount incorrectly from a transaction recording an amount incorrectly from the balance sheet

making an error when calculating the account balance recording an amount incorrectly from a transaction

Turner Company purchased equipment for $2,500 in cash. This transaction would increase the _________ account: Multiple choice question. equipment purchases equipment expense cash

Equipment

True or false: When analyzing a transaction using a T account, increases for all accounts are shown on the left-hand column.

False

Identify which items appear on the title of an income statement:

For the Year Ended 2014 Income Statement Company Name

Identify which items appear on the title of an income statement: Multiple select question. Owner's Capital For the Year Ended 2014 Income Statement Company Name 12/31/2014

For the Year Ended 2014 Income Statement Company Name

A(n) (increase/decrease) to an expense account is shown on the left-hand side of the T account.

Increase

A(n) (increase/decrease) to the accounts payable account is shown on the right-hand side of the T account.

Increase

When analyzing the supplies account

Increase are shown on the left-hand side of the T account Decreases are shown on the right-hand side of the T account

When analyzing the fees earned account:

Increase are shown on the right-hand side of the T account Decreases are shown on the left-hand side of the T account

When analyzing the owner's capital account

Increase are shown on the right-hand side of the T-accounts Decreases are shown on the left-hand side of the T-accounts

When analyzing the supplies account

Increases are shown on the left-hand side of the T-account Decreases are shown on the right-hand side of the T-account

Expense accounts are always increased on the (left/right) -hand side of the T account.

Left

Prepaid accounts are always increased on the (left/right) -hand side of the T account.

Left

The cash account is always increased on the (left/right)_________-hand side of the T-account

Left

The equipment account is always increased on the (left/right) _____-hand side of the T account.

Left

The increase side of an account is called the ______ balance.

Normal

Identify which of the following items would appear on the balance sheet: Multiple select question. Owner's Equity Liabilities Revenue Assets Drawings Expenses

Owner's Equity Liabilities Assets

Identify which of the following items would appear on the balance sheet: Multiple select question. Owner's Equity Revenue Liabilities Assets Expenses Drawings

Owner's equity Liabilities Assets

Expense items acquired, recorded, and paid for in advance of their use are called: Multiple choice question. unearned expenses accrued expenses prepaid expenses

Prepaid expenses

Match the terms to the appropriate definition

Prepaid expenses- expense items acquired, recorded, and paid for in advance of their use Accounts receivable- claims for future collection from customers Accounts payable- amounts a business must pay in the future

Gonzo's Grooming Company issued a check in the amount of $3,000 to pay rent for the next three months. This transaction would be recorded with a debit entry to the ______ account.

Prepaid rent

Gonzo's Grooming Company issued a check in the amount of $3,000 to pay rent for the next three months. This transaction would be recorded with a debit entry to the ______ account. Multiple choice question. prepaid rent accounts payable cash rent expense

Prepaid rent

Identify which of the following accounts are permanent accounts:

Prepaid rent Accounts payable Cash

A company issued a check for $6,000 to pay rent for the next three months. This transaction would debit the _____ ______ account, and credit the _______ account.

Prepaid rent Cash

The accounts payable account is always increased on the (left/right) -hand side of the T account.

Right

The fees earned account is always increased on the (left/right) _____ -hand side of the T account.

Right

The owner's capital account is always increased on the (left/right)______ hand side of the T account.

Right

Ronny and Assoc. issued a check for $2,400 to pay salaries. This transaction would be recorded with a debit entry on the left-hand side of which account: Multiple choice question. accounts receivable salaries expense salaries payable cash

Salaries expense

Sean Conroy, owner of Conroy and Associates, withdrew $5,000 cash. This transaction would be recorded with a debit entry on the left-hand side of which account: Multiple choice question. owner expense accounts payable Sean Conroy, Drawing cash

Sean Conroy, Drawing

Fancy Painting Company purchased office supplies for $500 in cash. This transaction would be recorded with a debit to the _______ account.

Supplies

Fancy Painting Company purchased office supplies for $500 in cash. This transaction would be recorded with a debit to the _______ account. Multiple choice question. supplies expense supplies cash accounts payable

Supplies

A company purchased office supplies for $500 in cash. This transaction would debit the ______ account, and credit the ______ account.

Supplies Cash

A company purchased office supplies for $500 in cash. This transaction would debit the_______account, and credit the ______ account.

Supplies Cash

Arrange the following sections of the statement of owner's equity, for a one year period, in the correct order.

Title Capital, January 1, 2016 Net income Less withdrawals Increase in capital Capital, December 31, 2016

When the digits of a number are switched (for example, 940 for 490), it is called a _________ error.

Transposition

A statement that lists all accounts and related balances, that is prepared after transactions have been recorded, and which tests the accuracy of total debits and total credits is called the _____________. Multiple choice question. balance sheet trial balance double-entry system chart of accounts

Trial balance

A statement to test the accuracy of total debits and credits after transactions have been recorded is called the _______ _______.

Trial balance

Quality Plumbing Co. received $450 for plumbing services, previously billed. This transaction would be recorded with a credit entry on the right-hand side of which account: Accounts payable Cash Accounts receivable Fees income

Accounts receivable

Speedy Delivery Company completed a delivery and billed the customer for $980. This transaction would be recorded with a debit entry on the left-hand side of which account: Multiple choice question. cash accounts receivable fees income delivery expense

Accounts receivable

Place the steps to calculate the balance of an account in the correct order.

Add the figures on each side of the account Enter the total in small pencil figures called a footing Subtract the smaller total from the larger total Record the balance on the side that has the larger total

The steps to analyze the effects of the business transactions should be performed in what order?

Analyze the financial event Apply the left- right rules for each account affected Make the entry in T-account form

Identify which of the following items are on the statement of owner's equity. Multiple select question. Withdrawals Net Income Capital, Beginning Balance Revenue Total Assets Total Liabilities

Withdrawals Net Income Capital, Beginning Balance

A company received $600 for services previously billed. This transaction would be recorded with: Multiple select question. a debit to accounts receivable a debit to fees income a credit to accounts receivable a credit to fees income a credit to cash a debit to cash

a credit to accounts receivable a debit to cash

Helen Jone's Hair Salon collects $800 cash for services provided during the day. This transaction would be recorded with a debit entry on the left-hand side of which account: Multiple choice question. fees income cash accounts receivable Helen Jone's, Capital

Cash

A company collected $980 cash from previously billed customers. This transaction would debit the _______ account, and credit the ______ ______account.

Cash Accounts receivable

Identify which of the following items appear on a balance sheet title: Multiple select question. Statement of Owner's Equity Company Name 12/31/XX Balance Sheet For the Year Ended 12/31/XX

Company Name 12/31/XX Balance Sheet

A company collected $200 cash from customers for services provided. This transaction would (debit/credit) the fees earned account, and debit/credit the cash account.

Credit Debit

A company purchased equipment for $2,000 in cash. This transaction would (debit/credit) _____ the cash account, and (debit/credit) _____ the equipment account.

Credit Debit

A company purchased equipment for $2,000 in cash. This transaction would (debit/credit) the cash account, and (debit/credit) the equipment account.

Credit Debit

An owner of a company withdrew $1,000 of his original cash investment. This transaction would (debit/credit) the cash account, and (debit/credit) the drawing account.

Credit Debit

A company collected $200 cash from customers for services provided. This transaction would (debit/credit) the fees earned account, and debit/credit the cash account

Credit Debit

An owner of a company withdrew $1,000 of his original cash investment. This transaction would (debit/credit) the cash account, and (debit/credit) the drawing account.

Credit Debit

A company issued a check for $500 to an office supply vendor in partial payment of an open account balance. This transaction would be recorded with a: Multiple select question. credit to cash debit to cash debit to accounts payable credit to office supplies

Credit to cash Debit to account payable

A(n) (increase/decrease) to the fees earned account is shown on the left-hand side of the T account.

Decrease

A(n) (increase/decrease) to the supplies account is shown on the right-hand side of the T account.

Decrease

An (increase/decrease) to the accounts receivable account is shown on the right-hand side of the T account.

Decrease

A special type of owner's equity account set up to record the owner's withdrawal of cash from the business is called the ___________ account. Multiple choice question. drawing capital equity

Drawing

A special type of owner's equity account set up to record the owner's withdrawal of cash from the business is called the account.

Drawing

Turner Company purchased equipment for $2,500 in cash. This transaction would increase the _________ account:

Equipment

Black Consulting Company purchased equipment for $5,000. This amount is to be paid in 60 days. This transaction would be recorded with a credit entry to the ________ account.

accounts payable

Which of the following are correct steps to calculate the balance of an account? Multiple select question. add the figures on each side of the account enter the total in small pencil figures called a footing add the two footing balances together record the balance on the side that has the smaller total

add the figures on each side of the account enter the total in small pencil figures called a footing

Select all that apply The steps to analyze the effects of a business transaction include (select all that apply): Multiple select question. analyze the financial event make the entry in T-account form apply the high-low rules for each account affected

analyze the financial event make the entry in T-account form

Identify the correct steps to prepare a trial balance:

enter the trial balance heading total the debit column; total the credit column enter the ending balances of each account in the appropriate debit or credit column

Identify the correct statement about the accounting equation: Multiple choice question. owner's equity increases on the right (credit) side liabilities increase on the left (debit) side assets increase on the right (credit) side

owner's equity increases on the right (credit) side

Common errors that cause the trial balance debit and credit columns not to balance include (select all that apply): Multiple select question. recording an amount incorrectly from the balance sheet recording an amount incorrectly from a transaction making an error when calculating the account balance

recording an amount incorrectly from a transaction making an error when calculating the account balance

Identify the correct steps to prepare a trial balance: Multiple select question. total the debit column; total the credit column enter the trial balance heading sum the total debits with total credits list the accounts names in alphabetical order enter the ending balances of each account in the appropriate debit or credit column

total the debit column; total the credit column enter the trial balance heading enter the ending balances of each account in the appropriate debit or credit column