ch 2

a

Question Content Area The classification and normal balance of the drawing account are a. owner's equity, debit balance b. expense, credit balance c. liability, credit balance d. expense, debit balance

c

Which of the following abbreviations is correct? a. Debit, "Db"; Credit, "Cd" b. Debit, "Dr"; Credit, "Cd" c. Debit, "Dr"; Credit, "Cr" d. Debit, "Db"; Credit, "Cr"

c

Which of the following accounts is an owner's equity account? a. Accounts Payable b. Cash c. Ross Morris, Capital d. Prepaid Insurance

d

Which of the following entries records the withdrawal of cash by Sally Anderson, owner of a proprietorship, for personal use? a. debit Salaries Expense; credit Salaries Payable b. debit Sally Anderson, Capital; credit Cash c. debit Salaries Expense; credit Cash d. debit Sally Anderson, Drawing; credit Cash

c

Which of the following is not a correct rule of debits and credits? a. Assets are decreased by credits and have a normal debit balance. b. Assets, expenses, and withdrawals are increased by debits. c. The normal balance for revenues and expenses is a credit. d. Liabilities, revenues, and owner's equity are increased by credits.

d

Which of the following is not considered to be a liability? a. Unearned Revenue b. Accounts Payable c. Wages Payable d. Accounts Receivable

d

Which of the following is true about assets? a. Assets are the personal property of the owner of the company. b. Assets include only physical items. c. Assets are the result of selling products or services to customers. d. Assets include both physical and intangible items.

d

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

a

A chart of accounts is a. usually a listing of accounts in financial statement order b. used in place of a ledger c. the same as a balance sheet d. usually a listing of accounts in alphabetical order

a

A credit balance in which of the following accounts would likely indicate an error? a. Salary Expense b. Janet James, Capital c. Fees Earned d. Accounts Payable

d

A debit balance in which of the following accounts would likely indicate an error? a. Salaries Expense b. Supplies c. Edgar Martin, Drawing d. Notes Payable

d

A debit signifies a decrease in a. drawing b. assets c. expenses d. revenues

a

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

a

Accounts are classified in the ledger a. in accordance with their appearance in the financial statements b. chronologically c. with the accounts used most often listed first d. alphabetically

a

Assume that you are creating a chart of accounts for a company. Each account number will have two digits. The first digit indicates the major account group to which the account belongs. Which of the following correctly identifies the major account groups typically represented by the numbers 1 through 5? a. 1-Assets, 2-Liabilities, 3-Owner's Equity, 4-Revenues, 5-Expenses b. 1-Owner's Equity, 2-Drawing, 3-Revenues, 4-Expenses c. 1-Assets, 2-Liabilities, 3-Owner's Equity, 4-Expenses, 5-Revenues d. 1-Assets, 2-Owner's Equity, 3-Revenues, 4-Expenses, 5-Drawing

d

In the chart of accounts, the balance sheet accounts are normally listed in which order? a. owner's equity, assets, liabilities b. liabilities, assets, owner's equity c. assets, owner's equity, liabilities d. assets, liabilities, owner's equity

a

In which of the following types of accounts are decreases recorded by credits? a. assets b. liabilities c. revenues d. owner's equity

b

Office supplies purchased by Janer's Cleaning Service on account were returned. Which of the following entries for Janer's Cleaning Service records this transaction? a. Cash, debit; Office Supplies, credit b. Accounts Payable, debit; Office Supplies, credit c. Office Supplies, debit; Accounts Receivable, credit d. Office Supplies, debit; Accounts Payable, credit

c

Office supplies were sold by Janer's Cleaning Service at cost to another repair shop, with cash received. Which of the following entries for Janer's Cleaning Service records this transaction? a. Office Supplies, debit; Accounts Payable, credit b. Accounts Payable, debit; Office Supplies, credit c. Cash, debit; Office Supplies, credit d. Office Supplies, debit; Cash, credit

d

Question Content Area A credit signifies a decrease in a. capital b. liabilities c. revenue d. assets

b

Question Content Area Cash was paid by Janer's Cleaning Service to creditors on account. Which of the following entries for Janer's Cleaning Service records this transaction? a. Accounts Receivable, debit; Cash, credit b. Accounts Payable, debit; Cash, credit c. Accounts Payable, debit; Accounts Receivable, credit d. Cash, debit; Debbi Janer, Capital, credit

b

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

d

Question Content Area In which order are the accounts listed in the chart of accounts? a. assets, liabilities, revenues, expenses, owner's equity b. assets, expenses, liabilities, owner's equity, revenues c. owner's equity, assets, liabilities, revenues, expenses d. assets, liabilities, owner's equity, revenues, expenses

b

Question Content Area The chart of accounts is designed to a. alphabetize the accounts to make reading easier for financial statement users b. meet the information needs of a company's managers and other users of its financial statements c. organize accounts in order of dollar amount to simplify the accounting information for users d. summarize the transactions and determine ending account balances

d

Question Content Area The classification and normal balance of the accounts payable account are a. owner's equity, credit balance b. revenue, credit balance c. asset, credit balance d. liability, credit balance

d

Question Content Area The debit side of an account a. depends on whether the account is an asset, liability, or owner's equity b. can be either side of the account depending on how the accountant set up the system c. is the right side of the account d. is the left side of the account

b

Question Content Area The following accounts appear in the ledger of Monroe Entertainment Co. All accounts have normal balances. Accounts Payable$1,500Fees Earned$3,600Accounts Receivable1,800Insurance Expense1,300Prepaid Insurance2,000Land3,000Cash3,200Wages Expense1,400Drawing1,200Capital8,800 Total assets are a. $8,000 b. $10,000 c. $9,800 d. $9,700

a

Question Content Area The following accounts appear in the ledger of Monroe Entertainment Co. All accounts have normal balances. Accounts Payable$436 Fees Earned$2,499Accounts Receivable790 Insurance Expense451Prepaid Insurance4,015 Land1,703Cash696 Wages Expense710Drawing308 Capital5,738 Total assets are a. $7,204 b. $5,738 c. $2,499 d. $3,631

a

Question Content Area The process of initially recording a business transaction is called a. journalizing b. posting c. balancing d. closing

b

Question Content Area Which group of accounts is comprised of only assets? a. Cash, Accounts Payable, Buildings b. Prepaid Expenses, Buildings, Patents c. Unearned Revenue, Prepaid Expenses, Cash d. Accounts Receivable, Revenue, Cash

c

Question Content Area Which of the following entries records the acquisition of office supplies on account? a. Accounts Receivable, debit; Office Supplies, credit b. Office Supplies, debit; Cash, credit c. Office Supplies, debit; Accounts Payable, credit d. Cash, debit; Office Supplies, credit

a

Question Content Area Which of the following is true about T accounts? a. The left side of a T account is called the debit side. b. The right side of a T account is called the debit side. c. The left side of a T account is called the credit side. d. Transactions are first recorded in T accounts and then posted to the journal.

a

Question Content Area Which statement(s) concerning cash is (are) true? a. Cash is increased by debiting. b. Cash will never have a credit balance. c. Cash will always have more debits than credits. d. All of these choices.