Question 1

When preparing the trial balance, the total debits should equal the total credits.

Accepted Answer

TRUE

Question 2

Credits increase Liabilities, Owner\'s Equity, and Revenue.

Accepted Answer

TRUE

Question 3

Increases in assets and expenses are both recorded with debits.

Accepted Answer

TRUE

Question 4

Increases in assets and revenue are both recorded with debits.

Accepted Answer

FALSE

Question 5

When an owner invests assets in a business, the capital account is debited

Accepted Answer

FALSE

Question 6

If the total of the amounts on the debit side of an account is greater than the total on the credit side, the balance is recorded on the debit side.

Accepted Answer

TRUE

Question 7

Utilities Expense would be debited when a company receives a bill for utilities that it will pay later.

Accepted Answer

TRUE

Question 8

Debit entries increase asset, drawing, expense and liability accounts

Accepted Answer

FALSE

Question 9

The normal balance side of a liability account is the debit side.

Accepted Answer

FALSE

Question 10

Increases in owner\'s equity are recorded with credits.

Accepted Answer

TRUE

Question 11

Revenue is a subdivision of owner\'s equity.

Accepted Answer

TRUE

Question 12

An increase in an expense results in an increase in owner\'s equity.

Accepted Answer

FALSE

Question 13

Increases in the owner\'s drawing account are recorded with debits.

Accepted Answer

TRUE

Question 14

After transactions for the period have been recorded, a trial balance is prepared to verify the equality of total debits and credits.

Accepted Answer

TRUE

Question 15

A business transaction affects at least two accounts.

Accepted Answer

TRUE

Question 16

The modern system of accounting is called the double-entry system because a debit to one account is balanced by a credit to another account

Accepted Answer

TRUE

Question 17

Financial statements are prepared after the trial balance is prepared.

Accepted Answer

TRUE

Question 18

Another name for permanent accounts is real accounts.

Accepted Answer

TRUE

Question 19

Another name for temporary accounts is real accounts.

Accepted Answer

FALSE

Question 20

When developing a chart of accounts, the highest block of numbers is assigned to asset accounts

Accepted Answer

FALSE

Question 21

An account whose balance is transferred to another account at the end of an accounting period is a temporary account.

Accepted Answer

TRUE

Question 22

An account with a balance that carries over from one accounting period to another is a nominal account.

Accepted Answer

FALSE

Question 23

Separate written records called ____________________ are kept for each asset and liability and for the owner\'s equity of a business.

Accepted Answer

ACCOUNTS

Question 24

Accountants use the term ____________________ when referring to the right side of an account.

Accepted Answer

CREDIT

Question 25

A decrease in a liability is recorded on the ____________________ side of the account.

Accepted Answer

DEBIT

Question 26

Revenue and expense accounts are called nominal or ____________________ accounts.

Accepted Answer

TEMPORARY

Question 27

Expense accounts are increased by ____________________ the accounts.

Accepted Answer

DEBITING

Question 28

When equipment is purchased for cash, the accountant enters an amount on the left side of the ____________________ account.

Accepted Answer

EQUIPMENT

Question 29

A(n) ____________________ account is used to record increases in owner\'s equity from the sale of goods or services.

Accepted Answer

REVENUE

Question 30

The difference between the debit and credit side of an account is called the account ___________________.

Accepted Answer

BALANCE

Question 31

A column of figures is added and the total is entered in small pencil figures called a(n) ___________________.

Accepted Answer

FOOTING

Question 32

The increase side of an account represents the ____________________ balance of the account.

Accepted Answer

NORMAL

Question 33

A statement prepared to test the accuracy of total debits and credits after transactions have been recorded is called a(n) ___________________.

Accepted Answer

TRIAL BALANCE

Question 34

A special type of owner\'s equity account set up to record withdrawals of assets by the owner for personal use is called a(n) ____________________ account.

Accepted Answer

DRAWING

Question 35

The error that occurs when the number $5.00 is written as $50.00 is called a(n) ____________________ error.

Accepted Answer

SLIDE

Question 36

The error that occurs when the number $272.00 is written as $27.20 is called a(n) ____________________ error.

Accepted Answer

SLIDE

Question 37

An entry on the right side of an account is called a(n) ___________________.

Accepted Answer

CREDIT

Question 38

An entry on the left side of an account is called a(n) ___________________.

Accepted Answer

DEBIT

Question 39

Rent Revenue is increased by _________________ the account.

Accepted Answer

CREDITING

Question 40

Another name for the profit and loss statement is the ____________________.

Accepted Answer

INCOME STATEMENT

Question 41

The account Moriah Paige, _______________ would appear on both the Statement of Owner\'s Equity and the Balance Sheet.

Accepted Answer

CAPITAL

Question 42

The order in which financial statements are prepared is determined by the fact that information from one is needed to prepare the next. Which statement is prepared last? ____________________.

Accepted Answer

BALANCE SHEET

Question 43

In a Chart of Accounts, each category of accounts is given a __________ of numbers with gaps so that additional accounts can be added when needed.

Accepted Answer

SERIES

Question 44

The classification and normal balance of the accounts receivable account is:

Accepted Answer

an asset with a debit balance

Question 45

The classification and normal balance of the salaries expense account is:

Accepted Answer

an expense with a debit balance

Question 46

A business earns $4,000 from various charge account clients. To record this transaction, the business would:

Accepted Answer

Debit Accounts Receivable; Credit Revenue

Question 47

Select the entry below that records paying employees for work performed during the pay period?

Accepted Answer

debit Salary Expense and credit Cash

Question 48

A business receives a bill for utilities but decides to pay it next month. The business would record the receipt of the bill by:

Accepted Answer

Debiting Utilities Expense; Crediting Accounts Payable

Question 49

A business purchases equipment costing $4,000. They pay $1,500 right away and charge the remaining amount. To record this transaction, the business would:

Accepted Answer

Debit Equipment $4,000; Credit Cash $1,500 and Credit Accounts Payable $2,500

Question 50

A business performed $6,000 of services. Their customer paid $1,000 of the amount owed right away but charged the remaining amount. To record this transaction, the business would:

Accepted Answer

Debit Cash $1,000 and Debit Accounts Receivable $5,000; Credit Fee Income $6,000

Question 51

Which of the following entries records the withdrawal of cash for personal use by Ty Knott, the owner of a business?

Accepted Answer

debit Ty Knott, Drawing, and credit Cash

Question 52

The ending capital balance appears on which of the following statement(s

Accepted Answer

Statement of owner\'s equity and balance sheet

Question 53

On a statement of owner\'s equity, beginning capital is $30,000, Net Income for the year is $11,000 and Drawing for the year is $6,000, the ending capital amount would be

Accepted Answer

$35,000.

Question 54

A business purchases supplies on account. The entry to record this transaction is:

Accepted Answer

Debit Supplies; Credit Accounts Payable

Question 55

Debits are used to record

Accepted Answer

increases in assets.

Question 56

Which of the following represents the proper sequence for preparing the financial statements?

Accepted Answer

income statement, statement of owner\'s equity, balance sheet

Question 57

Which of the following is not one of the formal financial statements that is made available to all users of the financial statements.

Accepted Answer

Trial Balance

Question 58

A business pays a creditor on account. The entry to record this transaction is

Accepted Answer

Debit Accounts Payable; Credit Cash

Question 59

Credits are used to record

Accepted Answer

increases in liabilities and owner\'s equity.

Question 60

Debits are used to record increases in

Accepted Answer

assets and expenses.

Question 61

A firm paid cash to apply against a debt. To record this transaction, the accountant would

Accepted Answer

debit Accounts Payable and credit Cash.

Question 62

When revenue is earned from charge-account sales, the accountant

Accepted Answer

debits Accounts Receivable and credits a revenue account.

Question 63

When charge customers pay cash to apply against their accounts, the amount is recorded

Accepted Answer

on the left side of the Cash account and the right side of the Accounts Receivable account.

Question 64

The total of the figures on the left side of a Cash account is $25,800. The total of the figures on the right side is $14,100. The balance of this account

Accepted Answer

is $11,700 and would be recorded on the left side of the account.

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