Accounting Exam #2

An example of an expense is A. prepaid insurance B. advertising C. accounts payable D. cash

Advertising

A credit represents a decrease in A. an asset B. a liability C. owner's equity D. revenues

An asset

Journalizing does NOT include A. debiting account(s) that are affected B. crediting account(s) that are affected C. Posting the debits and credits to the accounts D. entering the date

Posting the debits and credits to the accounts

Forms and papers that provide information about a business transaction are called A. ledgers B. accounts C. source documents D. journals

Source documents

The simplest form of journal is one with A. Four Columns B. Three Columns C. Two Columns D. One Column

Two Columns

Examples of revenue accounts include all of the following EXCEPT A. Wages B. Sales C. Delivery Fees D. Professional Fees

Wages

An increase in an asset account may be offset by a(n) A. decrease in a liability account B. increase in an expense account C. increase in owner's equity D. decrease in owner's equity

Increase in owner's equity

Revenues A. decrease liabilities B. decrease cash C. increase expenses D. increase owner's equity

Increase owner's equity

A purchase of an asset on account A. increase cash B. decrease owner's equity C. increases assets D. decreases expenses

Increases assets

An investment of cash in a business by the owner A. increases cash B. decreases owner's equity C. appears in a liability account D. represents an obligation of the business

Increases cash

The capital account A. decreases with increased revenue B. increases with increased expenses C. has a normal balance of a debit D. increases when the owner invests money in the business

Increases when the owner invests money in the business

The balance sheet A. is a list of all accounts showing the title and balance of each account B. is used as an aid in preparing the trial balance and income statement C. is for a period of time D. shows that assets equal liabilities plus owner's equity

Shows that assets equal liabilities plus owner's equity

The trial balance A. shows the current date B. shows only debit balances C. shows only credit balances D. lists only accounts that are used to prepare the balance sheet

Shows the current date

The standard T account includes all of the following EXCEPT A. A Credit Side B. A Debit Side C. A Title D. The Current Date

The Current Date

The drawing account should be used to show A. the amount the owner has invested in the business B. the amount the owner has taken out of the business C. The amount the business has earned D. The amount the business has spent

The amount the owner has taken out of the business

Every entry in the journal should include all of the following EXCEPT A. the title of each account affected B. the amounts C. a brief description D. the balance of the accounts affected

The balance of the accounts affected

A T Account has which of the following three major parts: A. A title, debit side, and credit side B. A title, current date, and a balance C. A debit side, a credit side, and a total column D. A debit side, a credit side, and a balance

A title, debit side, and a credit side

The purchase of an asset on account and making a partial payment results in all of the following EXCEPT A. An increase in an asset account B. a decrease in the Cash account C. a balanced accounting equation D. An increase in owner's equity

An increase in owner's equity

Because the first formal accounting record of a transaction is made in a journal from source document information, a journal is commonly referred to as a(n) A. ledger B. account C. cross-references D. book of original entry

Book of original entry

Footings in T accounts A. appear after each entry B. always appear on the right side C. are unnecessary when there is only one entry D. appear only in accounts carried over from the previous accounting period

Are unnecessary when there is only one entry

Footings in T accounts A. appear to the left of the amount columns B. are used for accounts with more than one debit or credit C. are only used in asset accounts D. are used for accounts with only one entry

Are used for accounts with more than one debit or credit

The month in the journal is recorded A. with every transaction B. as the first entry on a page C. fix the first and last transaction of the month D. for the last transaction of the month

As the first entry on a page

The difference between the total debits and credits to an account is called a A. Balance B. Ruling C. Footing D. Trial Balance

Balance

Payment of office rent represents a decrease in A. a liability account B. expenses C. cash D. a revenue account

Cash

Check stubs and carbon copies of checks provide information about A. Cash Payments B. Cash Receipts C. Sales of Goods or Services D. Purchases of Goods or Services

Cash Payments

A cash payment on a loan affects which of the following accounts? A. Cash and Accounts Receivable B. Cash and Notes Payable C. Cash and an expense account D. Cash and a revenue account

Cash and Notes Payable

Receipt stubs, carbon copies of receipts, cash register tapes, or memos of cash register totals provide information about A. cash payments B. cash receipts C. accounts payable D. purchases of goods or services

Cash receipts

Liability, owner's capital, and revenue accounts normally have A. debit balances B. Large Balances C. negative balances D. credit balances

Credit Balances

For EVERY transaction, the accountant enters the A. year, month, and day B. month and day C. day D. year and day

Day

Asset and Expense accounts normally have A. Credit Balances B. Large Balances C. Debit Balances D. Negative Balances

Debit Balances

The transaction to record payment for delivery equipment that was purchased on account in the previous month would include A. debiting cash and crediting accounts receivable B. debiting cash and crediting accounts payable C. debiting accounts payable and crediting cash D. debiting delivery equipment and crediting cash

Debiting accounts payable and crediting cash

If the owner of a company invested cash in a business enterprise, the transaction would include A. debiting cash and crediting capital B. debiting capital and crediting cash C. debiting cash and crediting revenue D. Debiting revenue and crediting cash

Debiting cash and crediting capital

Service revenue received in cash is entered by A. debiting cash and crediting service revenue B. debiting service revenue and crediting cash C. debiting cash and crediting accounts payable D. debiting accounts payable and crediting cash

Debiting cash and crediting service revenue

When delivery equipment is purchased on account, the transaction to be entered by the purchase includes A. debiting Delivery equipment and crediting accounts payable B. debiting delivery expense and crediting cash C. debiting delivery expense and crediting accounts payable D. debiting delivery equipment and crediting cash

Debiting delivery equipment and crediting accounts payable

Calma pays wages in the amount of $3,147. This transaction A. decreases Wage Expenses B. increases Cash C. increases owner's equity D. decreases cash

Decreases Cash

The fact that each transaction has a dual effect on the accounting elements provides the basis for what is called: A. single-entry accounting B. compound-entry accounting C. multiple-entry accounting D. double-entry accounting

Double-entry accounting

The steps in the journalizing process include all of the following EXCEPT A. Enter the balance B. Enter the Debit C. Enter the Date D. Enter the Credit

Enter the Balance

Payment of a telephone bill represents an increase is a(n) A. asset B. liability C. revenue D. expense

Expense

Accounts that affect owner's equity are A. Assets, Capital, and Revenue B. Capital, Liabilities, and Expenses C. Expenses, Capital, and Drawing D. Drawing, Assets, and Liabilities

Expenses, Capital, and Drawing

Totals on the debit and credit sides to determine the balance of an account are known as A. rulings B. credits C. debits D. footings

Footings

The normal balance of a capital account A. can be either a debit or a credit balance B. is a debit balance C. is a credit balance D. is called a footing

Is a credit balance

A Credit A. Increases Assets B. Is on the right side C. Decreases Liabilities D. Decreases Owner's Equity

Is on the Right Side

A debit A. is on the left side B. decreases assets C. increases liabilities D. increases owner's equity

Is on the left side

A chronological record of financial transaction expressed as debit and credits to accounts is provided by the A. ledger B. journal C. balance sheet D. trial balance

Journal

Increases are entered on the credit side of a(n) A. Asset Account B. Liability Account C. Expense Account D. Drawing Account

Liability Account

A chart of accounts does NOT include A. assets B. liabilities C. owner's equity D. names of customers

Names of customers

Copies of the sales tickets or sales invoices issued to customers or clients provide information about A. sales of goods or services B. purchases of goods or services C. cash receipts D. Cash payments

Sales of goods or services

The accounts in the chart of accounts are arranged in A. Alphabetical order B. numerical order C. chronological order D. The order they are created

Numerical order

The flow of financial data through the accounting information system does NOT include A. analyzing transaction B. journalizing and posting transaction C. preparing a trial balance D. Paying an account payable

Paying an account payable.

Purchase invoices received from suppliers provide information about A. cash receipts B. sales of goods C. purchases of goods or services D. cash payments

Purchases of goods or services