Question 1

Liability accounts are increased by debits.

Accepted Answer

A) True 
 B)False

Question 2

The normal balance of an expense account is a credit.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following entries records the receipt of a utility bill from the water company?

Accepted Answer

A)   debit Utilities Expense; credit Accounts Payable
B)   debit Utilities Payable; credit Accounts Receivable
C)   debit Accounts Payable; credit Cash
D)   debit Accounts Payable; credit Utilities PayableE) B) and D)
F) A) and D)

Question 4

The normal balance of revenue accounts is a credit.

Accepted Answer

A) True 
 B)False

Question 5

The process of initially recording a business transaction is called

Accepted Answer

A)   closing
B)   posting
C)   journalizing
D)   balancingE) A) and C)
F) All of the above

Question 6

A debit may signify a(n)

Accepted Answer

A)   decrease in asset accounts
B)   decrease in liability accounts
C)   increase in the capital account
D)   decrease in the drawing accountE) None of the above
F) B) and C) B

Question 7

On January 31, the cash account balance was $96,750. During January, cash receipts totaled $305,000 and cash payments totaled was $375,880. Determine the cash balance on January 1.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> + $305,000 - $375,8...

Question 8

Exhibit 2-1
All nine transactions for Ralston Sports Co. for September 2011, the first month of operations, are recorded in the following T accounts:
      Refer to Exhibit 2-1. Prepare a trial balance, listing the accounts in their proper order.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30">_TB2085_00...

Question 9

Which of the following group of accounts are increased with a debit?

Accepted Answer

A)   assets, liabilities, owner's equity
B)   assets, drawing, expenses
C)   assets, revenues, expenses
D)   assets, liabilities, revenuesE) All of the above
F) B) and D)

Question 10

When an owner invests assets in the business, the capital account increases due to revenue being earned.

Accepted Answer

A) True 
 B)False

Question 11

A trial balance is prepared to

Accepted Answer

A)   prove that there were no errors made in recording transactions into the journal
B)   prove that no errors were made in posting to the ledger
C)   prove that each account balance is correct
D)   summarize the account balances to help prepare financial statementsE) B) and C)
F) None of the above D

Question 12

Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service.

Accepted Answer

A)   Prepaid Rent, debit; Rent Revenue, credit.
B)   Cash, debit; Unearned Rent, credit.
C)   Cash, debit; Prepaid Rent, credit.
D)   Cash, debit; Rent Expense credit.E) None of the above
F) B) and C) B

Question 13

Even when a trial balance is in balance, there may be errors in the individual accounts.

Accepted Answer

A) True 
 B)False

Question 14

When an accounts payable account is paid in cash, the owner's equity in the business decreases.

Accepted Answer

A) True 
 B)False

Question 15

The process of recording a transaction in the journal is called

Accepted Answer

A)   recording
B)   journalizing
C)   posting
D)   summarizingE) B) and D)
F) A) and B)

Question 16

The right hand side of a T account is known as a debit and the left hand side is known as a credit.

Accepted Answer

A) True 
 B)False

Question 17

For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance total to be unequal, indicate whether the debit or credit total is higher and by how much.

Accepted Answer

\(\begin{array}{l}
\text { a. The totals...

Question 18

Which of the following entries records the withdrawal of cash by Sue Martin, owner of a proprietorship, for personal use?

Accepted Answer

A)   debit Sue Martin, Capital; credit Cash
B)   debit Sue Martin, Drawing; credit Cash
C)   debit Salaries Expense; credit Cash
D)   debit Salaries Expense; credit Salaries PayableE) None of the above
F) All of the above

Question 19

When a business receives a bill from the utility company, no entry should be made until the invoice is paid.

Accepted Answer

A) True 
 B)False

Question 20

A credit to the cash account will increase the account.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing Transactions

Liability accounts are increased by debits.

Correct AnswerverifiedShow Answer

The normal balance of an expense account is a credit.

Correct AnswerverifiedShow Answer

Which of the following entries records the receipt of a utility bill from the water company?

Correct AnswerverifiedShow Answer

The normal balance of revenue accounts is a credit.

Correct AnswerverifiedShow Answer

The process of initially recording a business transaction is called

Correct AnswerverifiedShow Answer

A debit may signify a(n)

Correct AnswerverifiedB

On January 31, the cash account balance was $96,750. During January, cash receipts totaled $305,000 and cash payments totaled was $375,880. Determine the cash balance on January 1.

Correct Answerverified + $305,000 - $375,8...View AnswerShow Answer

Exhibit 2-1 All nine transactions for Ralston Sports Co. for September 2011, the first month of operations, are recorded in the following T accounts: Refer to Exhibit 2-1. Prepare a trial balance, listing the accounts in their proper order.

Correct Answerverified_TB2085_00...View AnswerShow Answer

Which of the following group of accounts are increased with a debit?

Correct AnswerverifiedShow Answer

When an owner invests assets in the business, the capital account increases due to revenue being earned.

Correct AnswerverifiedShow Answer

A trial balance is prepared to

Correct AnswerverifiedD

Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service.

Correct AnswerverifiedB

Even when a trial balance is in balance, there may be errors in the individual accounts.

Correct AnswerverifiedShow Answer

When an accounts payable account is paid in cash, the owner's equity in the business decreases.

Correct AnswerverifiedShow Answer

The process of recording a transaction in the journal is called

Correct AnswerverifiedShow Answer

The right hand side of a T account is known as a debit and the left hand side is known as a credit.

Correct AnswerverifiedShow Answer

For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance total to be unequal, indicate whether the debit or credit total is higher and by how much.

Correct Answerverified\(\begin{array}{l}\text { a. The totals...View AnswerShow Answer

Which of the following entries records the withdrawal of cash by Sue Martin, owner of a proprietorship, for personal use?

Correct AnswerverifiedShow Answer

When a business receives a bill from the utility company, no entry should be made until the invoice is paid.

Correct AnswerverifiedShow Answer

A credit to the cash account will increase the account.

Correct AnswerverifiedShow Answer

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B

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+ $305,000 - $375,8...
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_TB2085_00...
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D

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B

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\(\begin{array}{l}
\text { a. The totals...
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