Accounting Final Review # 2

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The process that begins with recording business transactions and includes the completion of the financial statements is​ the:

accounting cycle.

Extreme Home bought painting equipment on account for​ $3,000. The entry would​ include:

debit to​ Equipment, $3,000; credit to Accounts​ Payable, $3,000.

An​ $1,000 check written for supplies was journalized and posted as​ $200. The entry to correct this error​ is:

debit​ Supplies, $800; credit​ Cash, $800.

Crystal Clear Imagery received and paid a utility bill for​ $300 for the month of November. This transaction​ will:

decrease Cash and increase Utility Expense.

The payment of accounts payable​ would:

decrease both assets and liabilities.

To correct an error made in the journal​ (prior to posting in the​ ledger):

None of the above is correct.

The proper sequence used in recording a business transaction​ is:

analyze, journalize,​ post, record the account​ balance, and complete the reference column in the journal.

The first step of the accounting cycle​ is:

analyzing business transactions.

Given the following list of accounts with normal​ balances, what are the trial balance totals of the debits and​ credits? Cash $1,500 Accounts Receivable 800 Capital 2,200 Accounts Payable 900 Service Fees Earned 1,400 Rent Expense 2,200

$4,500 ​debit, $4,500 credit

Accounts Payable had a normal starting balance of $800. There were debit postings of $300 and credit postings of $200 during the month. The ending balance​ is:

$700 credit.

If total liabilities are $41,000 and​ owner's equity is $35,000, the total assets must​ be:

$76,000.

If total liabilities are $3,000 and total assets are $12,000​, ​owner's equity must​ be:

$9,000.

The Accounts Receivable account has total debit postings of $2,400 and credit postings of $1,500. The balance of the account​ is:

$900 debit.

What is X-cel ​Company's net income or net loss if it had Revenue of $1,900​, Salary Expense of $400​, Utility Expense of $550​, and Withdrawals of $2,000 during​ October?

$950 net income

What is a proper entry to show the owner making an investment in the​ company?

A debit to Cash and a credit to Capital

Which of the following is NOT an​ asset?

Accounts Payable

An account that would be increased by a credit​ is:

Accounts Payable.

What would be the effect on the accounts if the business received the telephone bill but did not pay it​ immediately?

An expense would be debited and a liability credited.

The purchase of supplies for cash would affect which account​ category?

Assets

How does the purchase of supplies on account affect the accounting​ equation?

Assets​ increase; liabilities increase

Which of the following is prepared​ last?

Balance Sheet

Which of the following items are on both the balance sheet and the statement of​ owner's equity?

Capital

Vic's Mart collects​ $200 of its accounts receivable. The expanded accounting equation impact​ is:

Cash increases and Accounts Receivable decreases​ $200.

Which financial statement is prepared​ first?

Income Statement

How are credits distinguished from debits in the​ journal?

Indenting

Which of the following is NOT a type of business​ organization?

Information Technology

Which is an advantage of a sole proprietorship form of​ business?

The owner makes all the decisions.

Which of the following entries would record the payment of a utility​ bill?

Utilities​ Expense, debit;​ Cash, credit

A debit to the Capital account was posted to an expense account. This would​ cause:

expense to be overstated.

Business transactions are first recorded in​ the:

journal.

A credit to a liability account was posted to the capital account. This would​ cause:

liabilities to be understated.

Assets are equal​ to:

liabilities​ + owner's equity.

If beginning capital was $140,000​, ending capital is $90,000​, and the​ owner's withdrawals were $21,000​, the amount of net income or net loss​ was:

net loss of $29,000.

A debit to an expense account was posted as a debit to a revenue account. This error would​ cause:

revenue to be understated.

A law firm would be considered​ a:

service company.


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