Question 1

Which of the following sequences indicates the correct order of steps in the accounting cycle?

Accepted Answer

A)  Post to ledger,prepare journal entries,prepare trial balance,and prepare financial statements.
B)  Post to ledger,prepare journal entries,prepare financial statements,and prepare trial balance.
C)  Prepare journal entries,post to ledger,prepare trial balance,and prepare financial statements.
D)  Prepare journal entries,post to ledger,prepare financial statements,and prepare trial balance.E) B) and C)
F) None of the above

Question 2

Listed below are components of several transactions.Indicate whether a debit (dr) or credit (cr) would be required to record the component of the transaction.
-Decrease in Notes Payable.

Accepted Answer

A)  cr
B)  drC) A) and B)
D) undefined

Question 3

Forrest Industries has the following information in regard to its Cash account for the month of August.The account had a normal balance of $62,500 on August 1.During August,it had three debit entries totaling $250,000.The balance in the Cash account on August 31 was $112,500.What was the total of the credit entries to the Cash account during the month of August?

Accepted Answer

A)  $50,000
B)  $112,500
C)  $200,000
D)  $300,000E) C) and D)
F) A) and D)

Question 4

The list of account names and reference numbers that the company will use when accounting for transactions is called the chart of accounts.

Accepted Answer

A) True 
 B)False

Question 5

If a company pays back money borrowed from a bank,which of the following would be included in the journal entry to record this transaction?

Accepted Answer

A)  Credit Notes Payable and debit Common Stock
B)  Debit Cash and credit Notes Payable
C)  Debit Cash and credit Common Stock
D)  Credit Cash and debit Notes PayableE) None of the above
F) B) and C)

Question 6

Goodrich,Inc.signed an agreement to rent a warehouse from Ellie Co.This is an example of a transaction that should not be recorded.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would not be recorded as an accounting transaction?

Accepted Answer

A)  Issuing stock to owners in exchange for cash
B)  Ordering supplies to be delivered next month
C)  Selling inventory to customers in exchange for cash to be received next month
D)  Paying the bank for a portion of a note payableE) All of the above
F) A) and D)

Question 8

Match the term with its definition.(There are more definitions than terms. ) 
-Common Stock

Accepted Answer

A)  The abbreviation for an item posted on the left side of a T-account.
B)  A balance sheet that has not yet been publicly released.
C)  A transaction that is triggered automatically merely by the passage of time.
D)  When a company becomes included in the Fortune 500.
E)  The account credited when cash is received in exchange for stock issued.F) The value of a company's public relations campaign.G) An event that has no effect on the balance sheet and is not recorded in the financial statements.H) A balance sheet that has assets and liabilities categorized as current vs.noncurrent.I) Amounts owed to suppliers for goods or services bought on credit.J) The abbreviation for an item posted on the right side of a T-account.K) An exchange or event that has a direct impact on a company's financial statements.L) Liabilities divided by assets.M) Another name for stockholders' equity or shareholders' equity.N) A method of recording a transaction in debit/credit format.O) The expression that assets must equal liabilities plus stockholders' equity.P) E) and M)
Q) D) and E)

Question 9

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name.How would the benefits of this publicity appear on the balance sheet?

Accepted Answer

A)  It would appear as a current asset.
B)  It would appear as Common Stock.
C)  It would appear as a noncurrent asset.
D)  It would not appear on the balance sheet.E) A) and D)
F) A) and C)

Question 10

The characteristic shared by all liabilities is that they:

Accepted Answer

A)  provide a future economic benefit.
B)  result in an inflow of resources to the company.
C)  always end in the word "payable."
D)  obligate the company to do something in the future.E) A) and B)
F) B) and C)

Question 11

Candy Cane's ice cream shop,which opened in June,is a local hit.In July,Candy Cane hired a new employee at a rate of $1,200 per month to start work at the beginning of August.In July,Candy Cane should record:

Accepted Answer

A)  nothing,because an exchange of promises is not a transaction.
B)  a $1,200 increase to Prepaid Wages and a $1,200 decrease to Cash.
C)  a $1,200 increase to Wage Expense and a $1,200 decrease to Cash.
D)  a $1,200 increase in Wages Payable and a $1,200 increase in Wages Expense.E) C) and D)
F) A) and D)

Question 12

When accounts receivable are collected:

Accepted Answer

A)  stockholders' equity increases.
B)  total assets increase.
C)  total assets decrease.
D)  the amount of total assets is unchanged.E) None of the above
F) A) and B)

Question 13

Slug,Inc.purchases equipment for $1,200,000 million paying $180,000 in cash and issuing $1,020,000 in promissory notes.When the journal entry is posted to the related accounts:

Accepted Answer

A)  $1,200,000 will be credited and $180,000 will be debited to asset accounts;$1,020,000 will be debited to liability accounts.
B)  $1,200,000 will be debited to asset accounts;$1,020,000 will be credited to liability accounts.
C)  $1,200,000 will be debited and $180,000 will be credited to asset accounts;$1,020,000 will be credited to liability accounts.
D)  $1,200,000 will be credited to asset accounts;$1,200,000 will be debited to liability accounts.E) None of the above
F) All of the above

Question 14

The general ledger is an internal report that lists all the accounts and their balances and is used to check that total debits equals total credits.

Accepted Answer

A) True 
 B)False

Question 15

Match the term with its definition.(There are more definitions than terms. ) 
-Chart Of Accounts

Accepted Answer

A)  A summary of account names and numbers.
B)  A simplified version of an account in the General Ledger.
C)  Compares balance sheet items from two different time periods.
D)  When a dollar value is assigned to an item recorded in the accounting system.
E)  A journal entry that lowers the balance of the account.F) An amount that is posted on the left side of a T-account or ledger.G) The concept that a company must keep separate accounts by time period.H) An amount that is posted on the right side of a T-account or ledger.I) Assets are initially recorded at the amount paid to acquire them.J) When journal entries are recorded in the appropriate T-account or ledger.K) When a company's balance sheet has been verified by an outside auditor.L) The principle that a company should use the least optimistic measure,when uncertainty exists.M) The concept that any transaction must have at least two effects on the accounting equation.N) The mechanism used to record each transaction in the General Journal.O) J) and M)
P) F) and H)

Question 16

If the total dollar value of debits to an account exceeds the total dollar value of credits to that account,the ending balance of the account will be a debit balance.

Accepted Answer

A) True 
 B)False

Question 17

The Noble Corp.installs $75,000 of equipment,paying $25,000 cash and promising to pay the remaining $50,000 in 6 months.What is the impact to this transaction on the accounting equation?

Accepted Answer

A)  Total assets are increased by $50,000.
B)  Current assets are increased by $50,000.
C)  Total assets are increased by $75,000.
D)  Current assets are increased by $75,000.E) B) and C)
F) All of the above

Question 18

In a classified balance sheet,assets and liabilities are classified according to whether they are current or noncurrent.Which of the following statements is not correct about current assets?

Accepted Answer

A)  They will be acquired within one year.
B)  They will be converted to cash within one year.
C)  They will be sold within one year.
D)  They will be used up within one year.E) B) and C)
F) B) and D)

Question 19

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would be listed as a current liability?

Accepted Answer

A)  Cash
B)  Notes Payable (due in two years) 
C)  Supplies
D)  Accounts PayableE) A) and B)
F) A) and C)

Exam 2: The Balance Sheet

The list of account names and reference numbers that the company will use when accounting for transactions is called the chart of accounts.

Correct Answer
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The characteristic shared by all liabilities is that they:

Correct Answer
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Candy Cane's ice cream shop,which opened in June,is a local hit.In July,Candy Cane hired a new employee at a rate of $1,200 per month to start work at the beginning of August.In July,Candy Cane should record:

Correct Answer
verified

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Correct Answer
verified

The general ledger is an internal report that lists all the accounts and their balances and is used to check that total debits equals total credits.

Correct Answer
verified

Slug,Inc.purchases equipment for $1,200,000 million paying $180,000 in cash and issuing $1,020,000 in promissory notes.When the journal entry is posted to the related accounts:

Correct Answer
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Listed below are components of several transactions.Indicate whether a debit (dr) or credit (cr) would be required to record the component of the transaction. -Decrease in Notes Payable.

Correct Answer
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Match the term with its definition.(There are more definitions than terms. ) -Chart Of Accounts

Correct Answer
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Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name.How would the benefits of this publicity appear on the balance sheet?

Correct Answer
verified

When accounts receivable are collected:

Correct Answer
verified

Goodrich,Inc.signed an agreement to rent a warehouse from Ellie Co.This is an example of a transaction that should not be recorded.

Correct Answer
verified

The Noble Corp.installs $75,000 of equipment,paying $25,000 cash and promising to pay the remaining $50,000 in 6 months.What is the impact to this transaction on the accounting equation?

Correct Answer
verified

Correct Answer
verified

If the total dollar value of debits to an account exceeds the total dollar value of credits to that account,the ending balance of the account will be a debit balance.

Correct Answer
verified

If a company pays back money borrowed from a bank,which of the following would be included in the journal entry to record this transaction?

Correct Answer
verified

Which of the following would be listed as a current liability?

Correct Answer
verified

Which of the following would not be recorded as an accounting transaction?

Correct Answer
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Which of the following sequences indicates the correct order of steps in the accounting cycle?

Correct Answer
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In a classified balance sheet,assets and liabilities are classified according to whether they are current or noncurrent.Which of the following statements is not correct about current assets?

Correct Answer
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Match the term with its definition.(There are more definitions than terms. ) -Common Stock

Correct Answer
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Exam 2: The Balance Sheet

The list of account names and reference numbers that the company will use when accounting for transactions is called the chart of accounts.

Correct AnswerverifiedShow Answer

The characteristic shared by all liabilities is that they:

Correct AnswerverifiedShow Answer

Candy Cane's ice cream shop,which opened in June,is a local hit.In July,Candy Cane hired a new employee at a rate of $1,200 per month to start work at the beginning of August.In July,Candy Cane should record:

Correct AnswerverifiedShow Answer

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Correct AnswerverifiedShow Answer

The general ledger is an internal report that lists all the accounts and their balances and is used to check that total debits equals total credits.

Correct AnswerverifiedShow Answer

Slug,Inc.purchases equipment for $1,200,000 million paying $180,000 in cash and issuing $1,020,000 in promissory notes.When the journal entry is posted to the related accounts:

Correct AnswerverifiedShow Answer

Listed below are components of several transactions.Indicate whether a debit (dr) or credit (cr) would be required to record the component of the transaction. -Decrease in Notes Payable.

Correct AnswerverifiedShow Answer

Match the term with its definition.(There are more definitions than terms. ) -Chart Of Accounts

Correct AnswerverifiedShow Answer

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name.How would the benefits of this publicity appear on the balance sheet?

Correct AnswerverifiedShow Answer

When accounts receivable are collected:

Correct AnswerverifiedShow Answer

Goodrich,Inc.signed an agreement to rent a warehouse from Ellie Co.This is an example of a transaction that should not be recorded.

Correct AnswerverifiedShow Answer

The Noble Corp.installs $75,000 of equipment,paying $25,000 cash and promising to pay the remaining $50,000 in 6 months.What is the impact to this transaction on the accounting equation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the total dollar value of debits to an account exceeds the total dollar value of credits to that account,the ending balance of the account will be a debit balance.

Correct AnswerverifiedShow Answer

If a company pays back money borrowed from a bank,which of the following would be included in the journal entry to record this transaction?

Correct AnswerverifiedShow Answer

Which of the following would be listed as a current liability?

Correct AnswerverifiedShow Answer

Which of the following would not be recorded as an accounting transaction?

Correct AnswerverifiedShow Answer

Which of the following sequences indicates the correct order of steps in the accounting cycle?

Correct AnswerverifiedShow Answer

In a classified balance sheet,assets and liabilities are classified according to whether they are current or noncurrent.Which of the following statements is not correct about current assets?

Correct AnswerverifiedShow Answer

Match the term with its definition.(There are more definitions than terms. ) -Common Stock

Correct AnswerverifiedShow Answer

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