Chapter 3 Financial Accounting Quiz
Genesis Company buys equipment for $900 on credit. This transaction will immediately affect the A) balance sheet only. B) income statement, retained earnings statement, and balance sheet. C) income statement only. D) income statement and retained earnings statement only.
A
If cash is received in advance from a customer A) liabilities will increase. B) assets will decrease. C) retained earnings will increase. D) stockholders' equity will decrease.
A
The final step in the recording process is to transfer the journal information to the A) ledger. B) file cabinets. C) trial balance. D) financial statements.
A
The first step in the recording process is to A) analyze the transaction in terms of its effect on the accounts. B) prepare financial statements. C) post to a journal. D) prepare a trial balance.
A
The purpose of the ledger is to A) keep in one place all information about changes in specific account balances. B) record chronologically the day's transactions. C) keep a record of documentation to support each transaction. D) make sure that all assets, liabilities, etc., have normal balances at all times.
A
Transactions are initially recorded in chronological order in a __________ before they are transferred to the accounts. A) journal B) register C) T account D) ledger
A
Assets are increased by credits. A) True B) False
B
Equipment costing $17600 is purchased by paying $4400 cash and signing a note payable for the remainder. The journal entry should include a A) debit to Cash. B) credit to Notes Payable. C) credit to Notes Receivable. D) credit to Equipment.
B
If an account is debited in the journal entry, then A) that account will be both debited and credited in the ledger. B) that account will be debited in the ledger. C) that account will be credited in the ledger. D) the transactions will not balance.
B
If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates A) no errors have been made. B) the mathematical equality of the accounting equation. C) no errors can be discovered. D) that all accounts reflect correct balances.
B
In the first month of operations, the total of the debit entries to the Cash account amounted to $5740 and the total of the credit entries to the Cash account amounted to $3280. The Cash account has a A) $5740 debit balance. B) $2460 debit balance. C) $9020 credit balance. D) $3280 credit balance.
B
On July 7, 2017, Sunland Company received cash $1340 for services rendered. The entry to record this transaction will include A) a debit to Service Revenue of $1340. B) a debit to Cash of $1340. C) a credit to Accounts Payable of $1340. D) a credit to Accounts Receivable of $1340.
B
Which of the following is the correct sequence of events? A) None of the answer choices provides the correct sequence B) Analyze a transaction; record it in the journal; post it to the ledger C) Analyze a transaction; post it to the ledger; record it in the journal D) Record a transaction in the journal; analyze the transaction; post it to the ledger
B
An investment by the stockholders in a business increases A) liabilities and stockholders' equity. B) assets only. C) assets and stockholders' equity. D) assets and liabilities.
C
At December 1, 2017, Skysong, Inc. Accounts Receivable balance was $13780. During December, Skysong had credit sales of $36900 and collected accounts receivable of $29520. At December 31, 2017, the Accounts Receivable balance is A) $21160 credit B) $4 debit C) $21160 debit D) $50680 debit
C
If total liabilities increase by $5,000 then A) stockholders' equity increase by $5,000. B) assets and stockholders' equity each increase by $2,500. C) assets increase by $5,000, or stockholders' equity decrease by $5,000. D) assets decrease by $5,000.
C
What does a general ledger of a company contain? A) Asset and liability accounts only B) Revenue and expense accounts only C) All the asset, liability, stockholders' equity, revenue, and expense accounts D) Asset and stockholders' equity accounts only
C
Which accounts normally have debit balances? A) Assets, expenses, and retained earnings B) Assets, liabilities, and dividends C) Assets, dividends, and expenses D) Assets, expenses, and revenues
C
Which is not part of the recording process? A) Analyzing transactions B) Posting transactions C) Preparing a trial balance D) Entering transactions in a journal
C
Which of these statements about a journal is false? A) It provides a chronological record of transactions. B) It helps to locate errors because the debit and credit amounts for each entry can be readily compared. C) It discloses the complete effect of a transaction in one place. D) It contains only revenue and expense accounts.
D