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
