Total assets and total liabilities of a company are reported on which of the following?

D.Statement of financial position

Revenues would not result from

D.initial investment of cash by owner

The owner's investment of cash in the company will result in which of the following?

D.An increase in cash and an increase in equity

A.An increase in cash and a decrease in equity

B.An increase in cash and an increase in liabilities

C.An increase in fees earned and an increase in equity

Which of the following statements is true?

D.An account shows increases and decreases and an account balance

A.Debit entries are entries involving the right-hand side on an account

B.Journalizing entries occurs after posting entries

C.Revenue accounts are increased by debit entries

Which of the following is incorrect regarding a trial balance?

C.It proves that the company has recorded all transactions

A.A trial balance is useful in the preparation of financial statements

B.It proves that the debits equal the credits after posting

D.A trial balance uncovers errors in journalizing and posting

Amelia Company received its telephone bill on February 15, 2011 in the amount of $325. This bill covered the period from January 1, 2011 through January 31, 2011. Amelia paid this bill immediately. The company uses a calendar year accounting period and prepares its financial statements only once a year at the end of the year. The general journal entry to record this transaction includes:

B.A debit to the Telephone Expense account for $325

A.A credit to Accounts Payable for $325

C.A credit to the Telephone Expense account for $325

D.A debit to the Cash account for $325

Able Company pays its employees twice a month, on the 7th and the 21st. On June 21, Able Company paid employee salaries of $4,000. This transaction would

D.decrease net income for the month by $4,000

A.decrease the balance in Salaries Expense by $4,000

B.be recorded by a $4,000 debit to Salaries Payable and a $4,000 credit to Salaries Expense

C.increase owner’s equity by $4,000

Which of the following statements is false?

C.Revenues are increased by debits

A.Revenues are a positive factor in the computation of net income

B.Revenues increase owner's equity

D.Revenues have normal credit balances

On March 1, 2011, a company collects a $500 deposit from a customer for the installation of a home-theater system. The installation is scheduled for May 5, 2011. How should the company record this entry on March 1, 2011?

D.The Unearned Sales Revenue account is credited for $500

A.The Cash account is credited for $500

B.The Unearned Sales Revenue account is debited for $500

C.The Sales Revenue account is credited for $500

The usual sequence of steps in the transaction recording process is

B.analyze → journal → ledger

A.journal → analyze → ledger

C.ledger → journal → analyze

D.journal → ledger → analyze

Meenen Company purchases equipment for $1,200 and supplies for $400 from Sanders Co. for $1,600 cash. The entry for this transaction will include a

A.debit to Equipment $1,200 and a debit to Supplies $400 for Meenen

C.debit to Equipment $1,200 and a debit to Supplies Expense $400 for Sanders

D.credit to Accounts Payable for Meenen

After journal entries are posted, the reference column

A.of the general ledger will show journal page numbers

B.of the general journal will show "Dr" or "Cr"

C.of the general ledger will show account numbers

D.of the general journal will be blank

A company which sells and services medical insurance policies received one payment of $14,000 cash from a customer for insurance coverage for the next two years. Recording the receipt of this cash when it is received will require which of the following?

B.An asset to be debited, a liability to be credited

A.An asset to be debited, capital to be credited

C.A liability to be debited, an asset to be credited

D.Withdrawals to be debited, an asset to be credited

Grayton Industries purchased supplies for $1,000. They paid $500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $500. Which of the following would be the correct way to complete the recording of the transaction?

D.Credit another asset account for $500

A.Debit the Grayton, Capital account for $500

B.Credit another liability account for $500

C.Credit the Grayton, Capital account for $500

For prepaid expense adjusting entries

C.the adjusting entry results in a debit to an expense account and a credit to an asset account.

A.prior to adjustment, expenses are overstated and assets are understated.

B.an expense—liability account relationship exists.

If the adjusting entry for depreciation is not made,

D.expenses will be understated.

A.net income will be understated.

B.owner's equity will be understated.

Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause

D.an understatement of expenses and an understatement of liabilities.

A.net income to be understated.

B.an overstatement of expenses and an overstatement of liabilities.

C.an overstatement of assets and an overstatement of liabilities.

Employees at B Corporation are paid $5,000 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Wednesday, December 31. How much salary expense should be recorded two days later on January 2?

C.None, matching requires the weekly salary to be accrued on December 31.

A company adopts the accounting practice whereby all external transactions involving prepaid expenses, such as prepaid insurance, prepaid rent, and office supplies are initially debited to the asset account when acquired. If the company fails to adjust any one of these accounts for the current year, what will be the effect on (1) the current year's total expenses, (2) total revenues, (3) net income, and (4) ending owner's equity?

D.understated, no effect, overstated, and overstated

A.understated, understated, understated, and understated

B.Overstated, overstated, no effect, and no effect

C.understated, overstated, overstated, and overstated

Although it is possible to find an exception to the following statement, the vast majority of adjusting entries follow which pattern described below?

D.One of the accounts debited or credited is an income statement account while the second account debited or credited is a balance sheet account.

A.Both of the accounts debited or credited are part of the statement of owner's equity.

B.Both of the accounts debited or credited are balance sheet accounts.

C.Both of the accounts debited or credited are income statement accounts.

Which of the statements below is not true?

B.An adjusted trial balance is prepared before all transactions have been journalized.

A.An adjusted trial balance can be used to prepare financial statements.

C.An adjusted trial balance should show ledger account balances.

D.An adjusted trial balance proves the mathematical equality of debits and credits in the ledger.

At the end of the fiscal year, an adjusting entry was made for accrued salaries of $2,000. The salaries for one week, $4,250, were paid on the first Friday of the new fiscal period. When the weekly salaries are paid on the first Friday of the new accounting period, what will be the general journal entry?

D.Salary Expense, debit, $2,250; Salaries Payable, debit, $2,000; Cash, credit, $4,250

A.Salary Expense, debit, $2,000; Cash, credit, $2,000

B.Salaries Expense, debit, $4,250; Salaries Payable, credit, $4,250

C.Salaries Expense, debit, $4,250; Cash, credit, $4,250

What are the main purposes of the post-closing trial balance?

C.To verify that only real accounts continue to have a balance in them and that the sum of all the debit balances in the real accounts is equal to the sum of all the credit balances in the real accounts.

D.To verify that all the temporary or nominal accounts have zero balances.

A post-closing trial balance should be prepared

D.after closing entries are posted to the ledger accounts.

A.only if an error in the accounts is detected.

B.before closing entries are posted to the ledger accounts.

C.before adjusting entries are posted to the ledger accounts.

As described in the textbook, in what order should the temporary accounts be closed?

A.(1) revenues, (2) expenses, (3) income summary, and (4) dividends.

B.(1) expenses, (2) revenues, (3) income summary, and (4) dividends.

C.(1) dividends, (2) expenses, (3) revenues, and (4) income summary.

D.(1) revenues, (2) expenses, (3) dividends, and (4) income summary.

The most efficient way to accomplish closing entries is to

A.credit the income summary account for total revenues and debit the income summary account for total expenses

B.debit the income summary account for each expense account balance

C.credit the income summary account for each revenue account balance

D.credit the owner's drawing balance directly to the income summary account

Closing entries are made:

A.in order to transfer net income (or loss) and dividends to the owner's capital account

B.so that financial statements can be prepared

C.in order to terminate the business as an operating entity

D.so that all assets, liabilities, and owner's capital accounts will have zero balances when the next accounting period starts

Income Summary has a credit balance of $12,000 in J. Sawyer Co. after closing revenues and expenses. The entry to close Income Summary is:

B.debit Income Summary $12,000, credit J. Sawyer, Capital $12,000.

A.debit Income Summary $12,000, credit J. Sawyer, Drawing $12,000.

C.credit Income Summary $12,000, debit J. Sawyer, Capital $12,000.

D.credit Income Summary $12,000, debit J. Sawyer, Drawing $12,000.

Accounting (A)

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MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A.Increased by $19,000

B.Increased by $29,000

C.Decreased by $19,000

D.Decreased by $5,000

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Accounting (A)

Which one of the following users of accounting information is considered to be an external user of accounting information rather than an internal user of accounting information?

When cash is received from a customer in payment of an account receivable, how are the elements of the accounting equation affected?

Which of the following financial statements refers to a specific date (point in time)?

Collection of a $500 Accounts Receivable

The primary accounting standard-setting body in the United States is the

Purchasing equipment on account (payment to be made in the future) will have what effect on the elements of the accounting equation?

If during the current accounting period, the company's assets increased by $24,000 and equity increased by $5,000, then how did liabilities change?

Total assets and total liabilities of a company are reported on which of the following?

Revenues would not result from

If total liabilities decreased by $15,000 and owner’s equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

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