ACC Chapter 2 Study Guide

In which of the following types of accounts are decreases recorded by debits? a. liabilities b. dividends c. assets d. expenses

a

That the total dollar amount of the debits equals the total dollar amount of the credits in the ledger accounts can be verified through a(n): a. trial balance b. chart of accounts c. balance sheet d. income statement

a

The chart of accounts for the Corning Company includes the following: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Common Stock 31 Dividends 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 Page 3 of the journal contains the following entry: Description Post. Ref. Debit Credit Prepaid Insurance 1,530 Cash 1,530 What is the posting reference that will be found in the prepaid insurance account? a. 3 b. 11 c. 15 d. 13

a

The stockholders' equity will be reduced by all of the following except a. revenues b. expenses c. dividends d. all of these

a

Which of the following is not true with a double-entry accounting system? a. Each business transaction will have two debits. b. Every transaction affects at least two accounts. c. The sum of all debits is always equal to the sum of all credits in each journal entry d. The accounting equation remains in balance.

a

Which one of the statements below is not a purpose for the journal? a. to help locate errors b. to show increases and decreases in accounts c. to show chronological order of transactions d. to show a complete transaction in one place

a

In which order are the accounts listed in the chart of accounts? a. assets, expenses, liabilities, stockholders' equity, revenues b. assets, liabilities, stockholders' equity, revenues, expenses c. assets, liabilities, revenues, expenses, stockholders' equity d. stockholders' equity, assets, liabilities, revenues, expenses

b

March 10 Accounts Payable 800 Cash 800 Paid creditors on account. What effects does this journal entry have on the accounts? a. increase Accounts Payable, decrease Cash b. decrease Accounts Payable, decrease Cash c. increase Accounts Payable, increase Cash d. decrease Accounts Payable, increase Cash

b

Office supplies purchased by Janer's Cleaning Service on account were returned. The office supplies had not yet been paid for. Which of the following entries for Janer's Cleaning Service records this transaction? a. Office Supplies, debit; Accounts Receivable, credit b. Accounts Payable, debit; Office Supplies, credit c. Cash, debit; Office Supplies, credit d. Office Supplies, debit; Accounts Payable, credit

b

Which of the following groups of accounts increase with a credit? a. common stock, revenues, expenses b. liabilities, common stock, revenues c. assets, common stock, revenues d. none of these

b

Accounts a. are only used by large entities with many transactions b. do not reflect money amounts c. are records of increases and decreases in individual accounting equation elements d. are not used by entities that manufacture products

c

Of the following, which is an internal report that will determine if the total of the debit balances equal the total of the credit balances in the ledger? a. chart of accounts b. horizontal analysis c. trial balance d. income statement

c

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 confirm this suspicion? a. Determine the amount of the error and divide by two, then look for that amount on the trial balance. b. Determine the amount of the error and look for that amount on the trial balance. c. Determine the amount of the error and divide by nine. If the result is evenly divided, then this type of error is likely. d. Determine the amount of the error and refer to the journal entries for that amount.

c

Which of the following stockholders' equity accounts follows the same debit and credit rules as liabilities? a. expense accounts only b. dividends accounts only c. revenue, common stock, and retained earnings accounts d. expense and dividends accounts

c

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

d

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

d

The Posting Reference columns are used to trace transactions from the accounts to the journal. What will be entered in the Posting Reference column of (1) the journal and (2) the account? a. (1) the journal page number and (2) the account number b. (1) the journal page number and (2) the date of the transaction c. (1) the amount of the debit or credit and (2) the journal page number d. (1) the account number and (2) the journal page number

d

The chart of accounts for the Miguel Company includes the following: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Common Stock 31 Dividends 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 Page 5 of the journal contains the following transaction: Description Post. Ref. Debit Credit Salaries Expense 525 Cash 525 What is the posting reference that will be found in the salaries expense account? a. 11 b. 21 c. 54 d. 5

d

The process of recording a transaction in the journal is called a. posting b. summarizing c. balancing d. journalizing

d

Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service. a. Prepaid Rent, debit; Rent Revenue, credit. b. Cash, debit; Rent Expense, credit. c. Cash, debit; Prepaid Rent, credit. d. Cash, debit; Unearned Rent, credit.

d