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An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

A) True
B) False

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On a trial balance, if the Debit and Credit column totals are equal, then:


A) All transactions have been recorded correctly.
B) All entries from the journal have been posted to the ledger correctly.
C) All ledger account balances are correct.
D) Equal debits and credits have been recorded for transactions.
E) The balance sheet would be correct.

F) B) and E)
G) A) and D)

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Which of the following is not a step in the accounting process?


A) Record relevant transactions and events in a journal.
B) Post journal information to the ledger accounts.
C) Prepare and analyze the trial balance.
D) Analyzing each transaction.
E) Verify that revenues and expenses are equal.

F) All of the above
G) C) and D)

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A record containing all the separate accounts for a company as well as all of their balances is called the ___________________.

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Explain the difference between a general ledger and a chart of accounts.

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A ledger is a record containing all of t...

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Debits increase asset and expense accounts.

A) True
B) False

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The higher a company's debt ratio, the lower the risk of a company not being able to meet its obligations.

A) True
B) False

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The financial statement that summarizes the changes in retained earnings is called the balance sheet.

A) True
B) False

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The balance column in a ledger account is:


A) An account entered on the balance sheet.
B) A column for showing the balance of the account after each entry is posted.
C) Another name for the dividends account.
D) An account used to record the transfers of assets from a business to its stockholders.
E) A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.

F) C) and E)
G) A) and E)

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The journal is known as a book of original entry.

A) True
B) False

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The trial balance can serve as a replacement for the balance sheet, since total debits must equal total credits.

A) True
B) False

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The third step in the analyzing and recording process is to post the information to the ___________________.

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ABC Catering received $800 cash from a customer for catering services to be provided next month. Given the choices below, determine the general journal entry that ABC Catering will make to record this transaction.


A)  Unearned Catering Revenue 800 Catering Revenue 800\begin{array} { | l | r | r | } \hline \text { Unearned Catering Revenue } & 800 & \\\hline \text { Catering Revenue } & & 800 \\\hline\end{array}
B)  Cash 800 Accounts Receivable 800\begin{array} { | l | r | r | } \hline \text { Cash } & 800 & \\\hline \text { Accounts Receivable } & & 800 \\\hline\end{array}
C)  Cash 800 Unearned Catering Revenue 800\begin{array} { | l | r | r | } \hline \text { Cash } & 800 & \\\hline \text { Unearned Catering Revenue } & & 800 \\\hline\end{array}
D)  Cash 800 Catering Revenue 800\begin{array} { | l | r | r | } \hline \text { Cash } & 800 & \\\hline \text { Catering Revenue } & & 800 \\\hline\end{array}
E)  Accounts Receivable 800 Catering Revenue 800\begin{array} { | l | r | r | } \hline \text { Accounts Receivable } & 800 & \\\hline \text { Catering Revenue } & & 800 \\\hline\end{array}

F) C) and D)
G) A) and B)

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The second step in the analyzing and recording process is to record the transactions and events in the book of original entry, called the ______________.

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A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:


A) Dividends account.
B) Equity account.
C) Drawing account.
D) T-account.
E) Balance column sheet.

F) A) and B)
G) A) and E)

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The right side of an account is called the debit side.

A) True
B) False

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In a double-entry accounting system, the total dollar amount debited must always equal the total dollar amount credited.

A) True
B) False

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While in the process of posting from the journal to the ledger, a company failed to post a $500 debit to the Equipment account. The effect of this error will be that:


A) The Equipment account balance will be overstated.
B) The trial balance will not balance.
C) The error will overstate the debits listed in the journal.
D) The total debits in the trial balance will be larger than the total credits.
E) The error will overstate the credits listed in the journal.

F) B) and C)
G) C) and D)

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Larry Bar opened a frame shop and completed these transactions: 1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000. 2) Purchased $70 of office supplies on credit. 3) Paid $1,200 cash for the receptionist's salary. 4) Sold a custom frame service and collected a $1,500 cash on the sale. 5) Completed framing services and billed the client $200. What was the balance of the cash account after these transactions were posted?


A) $300.
B) $41,500.
C) $40,300.
D) $38,500.
E) $38,700.

F) D) and E)
G) None of the above

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Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting, Inc. Which of the following general journal entries will RR Consulting, Inc. make to record this transaction?


A) Debit Assets $200,000; credit Common Stock, $200,000.
B) Debit Cash and Land, $200,000; credit Common Stock, $200,000.
C) Debit Cash $70,000; debit Land $130,000; credit Common Stock, $200,000.
D) Debit Common Stock, $200,000; credit Cash $70,000; credit Land, $130,000.
E) Debit Common Stock, $200,000; credit Assets, $200,000.

F) A) and E)
G) B) and E)

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Showing 141 - 160 of 183

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