Accounts are records of increases and decreases in individual financial statement True False ANSWER: True DIFFICULTY: Easy Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: - Purpose - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A chart of accounts is a listing of accounts that make up the journal. True ANSWER: False DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The chart of accounts should be the same for each business. True ANSWER: DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Accounts payable are accounts that you expect will be paid to you. True ANSWER: False DIFFICULTY: Moderate Bloom’s: Remembering Trial Trial Trial Trial
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.04 - Cash vs. Accrual ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Consuming goods and services in the process of generating revenues results in expenses. True ANSWER: True DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Prepaid expenses are an example of an expense. True False ANSWER: DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Cash vs. Accrual ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The Unearned Revenues account is an example of a liability. True False ANSWER: True DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.04 - Cash vs. Accrual ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The Drawings account is an example of an expense. True False
ANSWER: False DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Accounts in the ledger are usually maintained in alphabetical order. True False ANSWER: DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: - GAAP - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Depending on the account title, the right side of the account is referred to as the credit side. True False ANSWER: DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic To determine the balance in an account, always subtract credits from debits. True False ANSWER: DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement
Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A credit to the cash account will increase the account. True ANSWER: False DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The cash account will always be debited. True False ANSWER: False DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The recording of cash receipts to the cash account will be done by debiting the account. True ANSWER: True DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic
ANSWER: True DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic When an owner invests assets in the business, the capital account increases due to revenue being earned. True False ANSWER: False DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic When an account receivable is collected in cash, the total assets of the business increase. True ANSWER: False DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.15 - Current Assets Reporting ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic When an account payable is paid with cash, the equity in the business decreases. True ANSWER: DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.16 - Current Liabilities Reporting
ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic For a month's transactions for a typical medium-sized business, the salary expense account is likely to have only credit entries. True False ANSWER: False DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions - Measurement BUSPROG: Analytic A debit is abbreviated as Db and a credit is abbreviated as Cr. True ANSWER: False DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Accounting Cycle ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic When a business receives a bill from the utility company, no entry should be made until the invoice is paid. True False ANSWER: False DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: - Recording Transactions - Current Liabilities Reporting ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic For a month's transactions for a typical medium-sized business, the accounts payable account is likely to have only credit entries. True False ANSWER: False
ANSWER: False DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The process of recording a transaction in the journal is called journalizing. True ANSWER: True DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Transactions are initially entered into a record called a journal. True False ANSWER: True DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The double-entry accounting system records each transaction twice. True False ANSWER: False DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The increase side of an account is also the side of the normal balance. True False ANSWER: True
DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Journal entries include both and credit accounts for each transaction. True False ANSWER: True DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A transaction that is recorded in the journal is called a journal entry. True False ANSWER: True DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions - Measurement BUSPROG: Analytic Assets are increased with debits and decreased with credits. True False ANSWER: True DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Liabilities are increased with debits and decreased with credits. True False trial
True False ANSWER: True DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-03 - 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Postings made to standard account forms show a new balance after each entry. True ANSWER: True DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-03 - 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A group of related accounts that make up a complete unit is called a balance. True False ANSWER: False DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-04 - 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A trial balance determines the accuracy of the numbers. True False ANSWER: False DIFFICULTY: Challenging Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-04 - 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
Which of the following accounts is an owner's equity account? Cash Accounts Payable Prepaid Insurance Ross Morris, Capital ANSWER: d DIFFICULTY: Easy Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The gross increases in owner's equity attributable to business activities are called assets liabilities revenues expenses ANSWER: c DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A chart of accounts is the same as a balance sheet usually a listing of accounts in alphabetical usually a listing of accounts in financial statement used in place of a ledger ANSWER: c DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic
cash will always have more debits than credits cash will never have a credit balance cash is increased by debiting all of the above ANSWER: c DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following is true about T accounts? The left side of a T account is called the debit side. The left side of a T account is called the credit side. The right side of a T account is called the debit side. Transactions are first recorded in T accounts and then posted to the journal. ANSWER: a DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A cash payment is recorded in the cash account as neither a or a credit a credit a debit either a debit or a credit ANSWER: b DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The balance of an account is determined by adding all of the debits to all of the credits always subtracting the debits from the credits trial
liabilities expenses drawing ANSWER: b DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic In of the following types of accounts are decreases recorded by credits? liabilities equity assets revenues ANSWER: c DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A credit balance in which of the following accounts would indicate a likely error? Fees Earned Salary Expense Janet James, Capital Accounts Payable ANSWER: b DIFFICULTY: Challenging Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A balance in which of the following accounts would indicate a likely error? Salaries Expense Notes Payable trial
Office Supplies, debit; Accounts Payable, credit ANSWER: c DIFFICULTY: Challenging Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Cash was paid by Cleaning Service to creditors on account. Which of the following entries for Janer's Cleaning Service records this transaction? Cash, debit; Debbi Janer, Capital, credit Accounts Payable, debit; Cash, credit Accounts Receivable, debit; Cash, credit Accounts Payable, debit; Account Receivable, credit ANSWER: b DIFFICULTY: Challenging Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The process of initially recording a business transaction is called closing posting journalizing balancing ANSWER: c DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following entries records the acquisition of office supplies on account? Office Supplies, Cash, credit Cash, debit; Office Supplies, credit Office Supplies, Accounts Payable, credit Accounts Receivable, debit; Office Supplies, credit ANSWER: c
LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service. Prepaid Rent, Rent Revenue, credit. Cash, debit; Unearned Rent, credit. Cash, debit; Prepaid Rent, credit. Cash, debit; Rent Expense credit. ANSWER: b DIFFICULTY: Challenging Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCT.WARD.16.02-03 - 02-03 ACCREDITING STANDARDS: - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A client has a massage and asks the company bookkeeper to mail her the bill. The bookkeeper should make which entry to record the invoice? No entry until the cash is received Fees Earned, debit; Accounts Receivable, credit Cash, debit; Fees Earned, credit Accounts Receivable, debit; Fees Earned, credit ANSWER: d DIFFICULTY: Challenging Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCT.WARD.16.02-03 - 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following abbreviations is correct? “Dr”, Credit “Cd” Debit “Db”, Credit “Cr” Debit “Db”, Credit “Cd” Debit “Dr”, Credit “Cr” ANSWER: d DIFFICULTY: Moderate Bloom’s: Remembering Trial
BUSPROG: Analytic All of the following accounts are increased with a debit except Unearned Revenues Land Accounts Receivable Cash ANSWER: a DIFFICULTY: Easy Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following owner’s equity accounts follows the same debit and credit rules as liabilities? expense accounts only drawing accounts only revenue accounts only expense and drawing accounts ANSWER: c DIFFICULTY: Challenging Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The payment for the monthly rent will require which of the following entries? debit Cash and debit Rent Expense credit Cash and credit Rent Expense debit Rent Expense and credit Cash credit Rent Expense and debit Cash ANSWER: c DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic
Supplies are purchased on account. Services are provided on account. Cash is received from customers on account. Utility bill will be paid next month. ANSWER: b DIFFICULTY: Challenging Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following groups of accounts are increased with a debit? assets, liabilities, owner’s equity assets, drawing, expenses assets, revenues, expenses assets, liabilities, revenues ANSWER: b DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following groups of accounts increase with a credit? capital, revenues, expenses assets, capital, revenues liabilities, capital, revenues none of these ANSWER: c DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic of the following is true regarding normal balances of accounts? All accounts have a normal debit balance.
Salaries Expense 525 Cash 525 What is the posting reference that will be found in the salaries expense account? 5 11 54 21 ANSWER: a DIFFICULTY: Challenging Bloom’s: Applying LEARNING OBJECTIVES: ACCT.WARD.16.02-03 - 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means all of the information from the journal was correctly transferred to the ledger all accounts have their correct balances in the ledger only the journal is accurate; the ledger may be incorrect only that the debit dollar amounts equal the credit dollar amounts ANSWER: d DIFFICULTY: Challenging Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-04 - 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic That the total dollar amount of the debits equal the total dollar amount of the credits in the ledger accounts can be verified through a(n): of accounts trial balance income statement balance ANSWER: b DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-04 - 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle
LEARNING OBJECTIVES: ACCT.WARD.16.LO: 2-04 - LO: 2-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following errors will cause the trial balance totals to be unequal? posting the debit portion of a journal entry incorrectly when the credit portion of the entry is correctly posted failure to record a transaction or to post a transaction recording the same transaction more than once recording the same erroneous amount for both the and the credit parts of a transaction ANSWER: a DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-04 - 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The trial balance is out of balance and the accountant suspects that a transposition or slide error has occurred. What will the accountant do to confirm this suspicion? Determine the amount of the error and look for that amount on the trial balance. Determine the amount of the and divide by two, then look for that amount on the trial balance. Determine the amount of the error and refer to the journal entries for that amount. Determine the amount of the and divide by nine. If the result is evenly divided, then this type of error is likely. ANSWER: d DIFFICULTY: Challenging Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-04 - 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The purchase of supplies on account was recorded and posted as a debit to Supplies for $500 and a credit to Accounts Receivable for $500. The correcting entry would include a: credit to Accounts Receivable for $500 b. credit to Accounts Receivable for $1,000 credit to Accounts Payable for $500 d. credit to Accounts Payable for $1,000 ANSWER: c DIFFICULTY: Moderate Bloom’s: Applying
Present your answers in the following form: Account Debited Account Credited Transaction Type Effect Type Effect ANSWER: Account Debited Account Credited Transaction Type Effect Type Effect (1) + capital + (2) asset + liability + (3) asset + asset - (4) asset + revenue + (5) liability - asset - (6) expense + asset - (7) asset + revenue + (8) drawing + - (9) asset + asset - DIFFICULTY: Bloom’s: Applying LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic On June 1, the cash account balance was $96,750. During June, cash receipts totaled $305,000 and the June 30 balance was $75,880. Determine the cash payments made during June. ANSWER: $75,880 = $96,750 + $305,000 − ? Cash payments = $325,870 DIFFICULTY: Easy Bloom’s: Applying LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01 ACCT.WARD.16.02-03 - 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic On September 1, Erika Company purchased land for $47,500 cash. Provide the journal entry for this transaction. ANSWER: Sept. 1 Land 47,500 Cash Purchased land for the company. 47,500 DIFFICULTY: Moderate Bloom’s: Applying
(9) Increase in Cash ________ _______ (10) Decrease in Land ________ _______ ANSWER: (a) (b) Cr. Cr. Dr. Dr. Cr. Dr. Cr. Cr. Cr. Cr. Cr. Dr. Cr. Dr. Dr. Dr. Dr. Dr. Cr. Dr. DIFFICULTY: Moderate Bloom’s: Applying LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Record the following selected transactions for April in a two-column journal, identifying each entry by letter: Received $18,000 from Long, owner. Purchased equipment for $27,000, paying $10,000 in cash and giving a note payable for the remainder. Paid $2,300 for rent for April. Purchased $1,500 of supplies on account. Recorded $9,800 of fees earned on account. Received $7,500 in cash for fees earned. Paid $1,200 to creditors on account. Paid wages of $3,425. Received $7,900 from customers on account. Recorded owner's withdrawal of $1,875. ANSWER: (a) Cash 18,000 Katie Long, Capital 18,000 Equipment 27,000 Cash 10,000 Payable 17,000 Rent Expense 2,300 Cash 2,300 Supplies 1,500 Accounts Payable 1,500 Accounts Receivable 9,800 Fees Earned 9,800 Cash 7,500
Prepaid Insurance ANSWER: a Fees Earned ANSWER: d Patents ANSWER: a Chris Clark, Drawing ANSWER: c For each of the following accounts, indicate whether its normal balance is on the credit side or the debit side of the T account. Credit side Debit side DIFFICULTY: Moderate Bloom’s: Remembering LEARNING OBJECTIVES: ACCT.WARD.16.02-02 - 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic John Smith, Capital ANSWER: a Accounts Receivable ANSWER: b Accounts Payable ANSWER: a Interest Earned ANSWER: a