Question 1
A list of all the accounts from the ledger with their ending balances is called a __________.
A. normal balance
B. trial balance
C. chart of accounts
D. footing
Question 2
Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits?
A. $2,900 debit, $2,900 credit
B. $3,900 debit, $3,900 credit
C. $2,000 debit, $2,000 credit
D. $1,200 debit, $1,200 credit
Question 3
A debit to an expense account was posted to a revenue account. This error would cause __________.
A. assets to be overstated
B. liabilities to be overstated
C. revenue to be understated
D. None of the above answers are correct.
Question 4
The purpose of the trial balance is __________.
A. to list all of the accounts in the chart of accounts
B. to report all accounts with zero balances
C. to prove that debits equal credits
D. to distribute it with the other financial reports
Question 5
Which of the following is prepared last?
A. Balance Sheet
B. Income Statement
C. Statement of Owner's Equity
D. Trial Balance
Question 6
The chart of accounts __________.
A. is a numbered list of all of the business' accounts
B. allows accounts to be located quickly
C. can be expanded as the business grows
D. All of the above answers are correct.
Question 7
A debit to a liability account was posted to a revenue account. This error would cause __________.
A. revenues to be understated
B. liabilities to be understated
C. capital to be overstated
D. None of the above answers are correct.
Question 8
A credit to an asset account was posted to a revenue account. This error would cause __________.
A. assets to be overstated
B. revenue to be overstated
C. expenses to be overstated
D. Both A and C are correct.
Question 9
An account that would be increased by a debit is __________.
A. cash
B. fees earned
C. capital
D. accounts payable
Question 10
A withdrawal by the owner was posted to an expense account. This error would cause __________.
A. assets to be overstated
B. liabilities to be understated
C. withdrawals to be overstated
D. expenses to be overstated
Question 11
A debit to an asset account was posted to a liability account. This error would cause __________.
A. assets to be understated
B. liabilities to be overstated
C. capital to be overstated
D. None of the above answers are correct.
Question 12
Which of the following groups of accounts have a normal credit balance?
A. revenue, liabilities, and capital
B. assets, capital, and withdrawals
C. liabilities, expenses, and assets
D. assets, expenses, and withdrawals
Question 13
Which of the following is not a financial statement?
A. Balance sheet
B. Income statement
C. Statement of owner's equity
D. Trial balance
Question 14
A compound transaction was recorded as follows: debit Equipment, $5,000; debit Cash, $1500; credit Accounts Payable, $3,500. This error would cause __________.
A. assets to be overstated
B. assets to be understated
C. liabilities to be overstated
D. liabilities to be understated
Question 15
A credit to an asset account was posted to a liability account. This error would cause __________.
A. assets to be understated
B. liabilities to be overstated
C. capital to be understated
D. None of the above answers are correct.
Question 16
A credit to an asset account was posted to the capital account. This error would cause __________.
A. assets to be overstated
B. liabilities to be overstated
C. capital to be understated
D. Both A and C are correct.
Question 17
A credit customer paid $850 toward his accounts receivable. The accountant recorded a credit to the revenue account. This error would cause __________.
A. revenue to be understated
B. cash to be overstated
C. accounts receivable to be overstated
D. liabilities to be understated
Question 18
Which of the following errors would cause the trial balance to be out of balance?
A. An entry is posted twice.
B. An entry is not posted at all.
C. A debit is entered as $200 and the credit is entered at $2,000.
D. None of the above answers are correct.
Question 19
A credit to a liability account was posted to an expense account. This error would cause __________.
A. assets to be overstated
B. liabilities to be overstated
C. expenses to be overstated
D. None of the above answers are correct.
Question 20
A credit to a liability account was posted to an asset account. This error would cause __________.
A. liabilities to be overstated
B. liabilities to be understated
C. revenues to be overstated
D. revenues to be understated
Question 21
Which of the following entries records the acquisition of office supplies for cash?
•
A.
Office Supplies 5,000
Cash 5,000
•
B.
Office Supplies 5,000
Accounts Payable 5,000
•
C.
Equipment 5,000
Accounts Payable 5,000
•
D.
Equipment 5,000
Accounts Receivable 5,000
Question 22
The process that begins with recording business transactions and includes the completion of the financial statements is the __________.
A. calendar year
B. natural business year
C. fiscal year
D. accounting cycle
Question 23
A debit to an expense account was posted to an asset account. This would cause __________.
A. assets to be understated
B. liabilities to be understated
C. capital to be understated
D. expenses to be understated
Question 24
The posting reference column on the general journal __________.
A. shows which transactions have been posted to the ledger
B. displays to which accounts the transactions have been posted
C. allows us to cross reference to the general ledger
D. All of the above answers are correct.
Question 25
A debit to a liability account was posted to an expense account. This would cause __________.
A. assets to be overstated
B. liabilities to be understated
C. owner's equity to be overstated
D. expenses to be overstated
Question 26
A debit to a liability account was posted to a revenue account. This would cause __________.
A. assets to be overstated
B. liabilities to be overstated
C. capital to be overstated
D. revenue to be overstated
Question 27
The twelve-month period a business chooses for its accounting period is a(n. __________.
A. calendar year
B. accounting period
C. fiscal year
D. accounting cycle
Question 28
The posting reference column in the journal is used for __________.
A. recording the source documents identification number
B. recording the account number to which the entry was posted
C. recording the time when the entry was posted
D. recording the initials of the person who did the posting
Question 29
A debit to the capital account was posted to an expense account. This would cause __________.
A. assets to be overstated
B. liabilities to be understated
C. capital to be overstated
D. expense to be understated
Question 30
A credit to an asset account was posted to an expense account. This would cause __________.
A. assets to be overstated
B. liabilities to be understated
C. capital to be understated
D. expenses to be overstated
Question 31
The purpose of posting is to __________.
A. list the transactions in chronological order in the journal
B. provide an explanation of the transaction
C. update the account balances in the ledger
D. correct a previous entry
Question 32
A credit to an asset account was posted to a revenue account. This would cause __________.
A. assets to be understated
B. liabilities to be understated
C. capital to be understated
D. revenue to be overstated
Question 33
The posting reference column in the ledger is __________.
A. used to record the journal and page number the transactions originated
B. used to record the ledger number
C. used to record the date
D. not used
Question 34
Revenue is traditionally recognized in the accounting records when __________.
A. cash is received
B. services are rendered
C. it is incurred
D. None of the above answers are correct.
Question 35
Posting is performed by transferring information from the journal to the __________.
A. ledger
B. trial balance
C. balance sheet
D. income statement
Question 36
Which of the following entries would record the payment of a utility bill?
Question 37
A credit to a liability account was posted to an owner's equity account. This would cause __________.
A. assets to be overstated
B. liabilities to be understated
C. owner's equity to be understated
D. net income to be overstated
Question 38
Business transactions are first recorded in the __________.
A. ledger
B. journal
C. trial balance
D. balance sheet
Question 39
Renzi's Volleyball Gym purchased equipment for $1,200. It made a down payment of $600 with the remainder on account. The journal entry to record this transaction is __________.
Question 40
A journal entry affecting three or more accounts is called a __________.
A. multi-level entry
B. multi-step entry
C. compound entry
D. simple entry
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