Intro to Accounting MCQs

Question
Question 1 of 30 3.3334 Points The business bought supplies on account. To record this:
A. an asset is debited and a liability is credited. B. an asset is debited and an asset is credited. C. an expense is debited and a liability is credited. D. None of these are correct.

Question 2 of 30 3.3334 Points Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits? Cash $1000 Equipment 500 Accounts Payable 350 Capital 900 Service Fees 1000 Salaries Expense 750 A. $4,500 debit, $4,500 credit B. $3,250 debit, $3,250 credit C. $1,125 debit, $1,125 credit D. $2,250 debit, $2,250 credit

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Question 3 of 30 3.3334 Points Which of the following is prepared first? A. Trial balance B. Statement of owner’s equity C. Income statement D. Balance sheet

Question 4 of 30 3.3334 Points Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits? Cash $1,100 Accounts Receivable 800 Capital 1,900 Withdrawals 500 Service Fees 1,000 Rent Expense 500 A. $1,200 debit, $1,200 credit B. $2,900 debit, $2,900 credit C. $3,900 debit, $3,900 credit D. $2,000 debit, $2,000 credit

Question 5 of 30 3.3334 Points A liability would be credited and an expense debited if: A. the business paid a creditor. B. the business bought supplies on account. C. the business incurred an expense and did not pay the expense immediately. D. the business bought supplies for cash.

Question 6 of 30 3.3334 Points An asset would be debited and a liability credited if: A. the business incurred an expense and did not pay for the expense immediately. B. the business bought equipment on account. C. the business bought supplies for cash. D. the business incurred an expense and paid it.

Question 7 of 30 3.3334 Points Which of the following errors would cause the trial balance to be out of balance? A. An entry is not posted at all. B. A debit is entered as $200 and the credit is entered at $2,000. C. An entry is posted twice. D. None of these answers are correct.

Question 8 of 30 3.3334 Points Which of the following is not a financial statement? A. Statement of owner’s equity B. Trial balance C. Income statement D. Balance sheet

Question 9 of 30 3.3334 Points One asset would be debited and another credited if: A. the business provided services to a credit customer. B. the business paid a creditor. C. the business provided services to a cash customer. D. the business bought supplies paying cash.

Question 10 of 30 3.3334 Points The owner invested personal equipment in the business. To record this transaction: A. debit Equipment and credit Accounts Payable. B. credit Equipment and debit Capital. C. debit Equipment and credit Capital. D. debit Accounts Payable and credit Equipment.

Question 11 of 30 3.3334 Points A journal entry affecting three or more accounts is called a: A. simple entry. B. multi-step entry. C. multi-level entry. D. compound entry.

Question 12 of 30 3.3334 Points If Accounts Payable has been credited, it is most likely that: A. a payment was made on account. B. a correcting entry was made for the overstatement of the purchase of equipment on account. C. a purchase was made on account. D. None of these are possible.

Question 13 of 30 3.3334 Points When the trial balance includes a debit column total of $10,350 and a credit column total of $11,350, it is probable that: A. a transposition error occurred. B. a $500 debit was recorded twice. C. a $500 debit was recorded as a credit. D. a $500 credit was recorded twice.

Question 14 of 30 3.3334 Points The posting reference column in the journal is used for: A. recording the account number to which the entry was posted. B. recording the time when the entry was posted. C. recording the initials of the person who did the posting. D. recording the source documents identification number.

Question 15 of 30 3.3334 Points The journal entry to record a withdrawal by the owner would most commonly include: A. a debit to Wage Expense and a credit to Cash. B. a debit to Withdrawals and a credit to Cash. C. a debit to Capital and a credit to Cash. D. a debit to Cash and a credit to Wage Expense.

Question 16 of 30 3.3334 Points The general journal: A. is completed after the general ledger. B. is the book of final entry. C. contains account balances. D. is the book of original entry.

Question 17 of 30 3.3334 Points Which of the following entries records the owner taking cash for personal use? A. Capital, debit; Cash, credit B. Wage Expense, debit; Cash, credit C. No entry is necessary since the owner owns the cash and the entire business. D. Withdrawals, debit; Cash, credit

Question 18 of 30 3.3334 Points Interim statements are prepared to: A. notify management of the company’s current financial position. B. allow management to make changes to the business before processing year-end financial statements. C. notify investors of the company’s current financial position. D. All of the above are correct.

Question 19 of 30 3.3334 Points A debit to the Capital account was posted to an expense account. This would cause: A. liabilities to be understated. B. capital to be overstated. C. assets to be overstated. D. expense to be understated.

Question 20 of 30 3.3334 Points If the debit and credit totals of a trial balance are not equal, it could be due to the following type of error: A. Recording the same transaction more than once B. Incorrectly calculating the debit side of the trial balance C. Failure to record a transaction D. Recording the same erroneous amount for both the debit and the credit sides of a transaction

Question 21 of 30 3.3334 Points Which of the following transactions would cause the trial balance to be out of balance? A. A credit to Cash and a debit to Supplies for the same amount B. A debit to Cash and a debit to Equipment for the same amount C. A debit to Accounts Receivable and a credit to Accounting Fees for the same amount D. All of these answers are correct.

Question 22 of 30 3.3334 Points The general ledger: A. lists the transactions in chronological order. B. is the book of final entry. C. is before the general journal. D. is the book of original entry.

Question 23 of 30 3.3334 Points The process of initially recording business transactions in a journal is: A. transposing. B. journalizing. C. sliding. D. posting.

Question 24 of 30 3.3334 Points If Prepaid Rent has been debited, it is likely that: A. a bill for the past month’s rent was received. B. this month’s rent was paid. C. the rent was paid for three months in advance. D. All of these are possible.

Question 25 of 30 3.3334 Points As Withdrawals increase: A. owner’s equity decreases. B. Cash increases. C. expense increases. D. owner’s equity increases.

Question 26 of 30 3.3334 Points Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means: A. all accounts have their correct balances in the ledger. B. only the ledger is accurate; the journal may be incorrect. C. only that the debit dollar amounts equal the credit dollar amounts. D. all of the information from the journal was correctly transferred to the ledger.

Question 27 of 30 3.3334 Points The process that begins with recording business transactions and includes the completion of the financial statements is the: A. accounting cycle. B. fiscal year. C. calendar year. D. natural business years.

Question 28 of 30 3.3334 Points The entry to record the payment of office salaries would be: A. Debit Salaries Expense; Credit Cash B. Debit Cash; Credit Accounts Receivable C. Debit Cash; Credit Salaries Expense D. Debit Salaries Expense; Credit Accounts Payable

Question 29 of 30 3.3334 Points The entry to record completing a financial lecture and immediately collecting payment from customers would be: A. Cash 500 Lecture Fees 500 B. Cash 500 Accounts Payable 500 C. Lecture Fees 500 Accounts Payable 500 D. Lecture Fees 500 Cash 500

Question 30 of 30 3.3334 Points Antonio’s catered a reception. The total price was $500. The customer paid half of the fee in cash and placed the remainder on account. The journal entry to record this transaction is: A. Cash 500 Catering Service Fees 500 B. Accounts Receivable 500 Cash 250 Catering Service Fees 250 C. Cash 250 Accounts Receivable 250 Catering Service Fees 500 D. Cash 500 Accounts Receivable 500

ASSIGN 8 Question 1 of 20 5.0 Points

The entry to replenish the petty cash fund debited Insurance Expense for postage. This would cause: A. Petty Cash to be understated. B. Postage Expense to be overstated. C. Insurance Expense to be overstated. D. Petty Cash to be overstated. ‘

Question 2 of 20 5.0 Points The petty cash overage was not recorded. This would cause: A. expenses to be understated. B. expenses to be overstated. C. revenues to be overstated. D. revenues to be understated.

Question 3 of 20 5.0 Points Outstanding checks: A. have not been presented to the bank for payment and have not been subtracted from the checkbook. B. have been subtracted on the bank records but not the checkbook records. C. have not been presented to the bank for payment but have been subtracted in the checkbook. D. have been returned to the business for nonpayment.

Question 4 of 20 5.0 Points An example of an internal control is: A. all checks are prenumbered. B. the use of bank account. C. all checks written must have reference source documents. D. All of these answers are correct.

Question 5 of 20 5.0 Points The check is written and signed by the: A. drawer. B. payee. C. payer. D. drawee. Question 6 of 20 5.0 Points A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement? A. It is shown as a credit memo. B. It is added to the bank balance. C. It is shown as a debit memo. D. None of these answers are correct.

Question 7 of 20 5.0 Points The bank would issue a credit memorandum to Maria’s Life Management when the bank: A. discovered a check that was deposited was returned for nonsufficient funds. B. collects a note receivable from a customer. C. received the deposits in transit. D. None of these answers are correct.

Question 8 of 20 5.0 Points The debit recorded in the journal to establish the petty cash fund is to: A. Petty Cash. B. Accounts Receivable. C. Accounts Payable. D. Cash.

Question 9 of 20 5.0 Points What type of an account is the petty cash fund? A. Liability B. Expense C. Asset D. Revenue Question 10 of 20 5.0 Points Determine the adjusted cash balance per bank for Santa’s Packaging on November 30, from the following information: Cash balance on the bank statement $2,350 Customer’s check returned NSF 500 Customer’s note collected by the bank 600 Deposits in transit, November 30 1,400 Outstanding checks, November 30 2,650 A. $1,350 B. $1,250 C. $1,100 D. $1,550

Question 11 of 20 5.0 Points The drawee is the: A. the person to whom the check is payable. B. bank that drawer has an account with. C. person who writes the check. D. the person who reconciles the account.

Question 12 of 20 5.0 Points Checks that have been processed by the bank and are no longer negotiable are: A. checks in process. B. outstanding checks. C. canceled checks. D. blank checks.

Question 13 of 20 5.0 Points The May bank statement for Accounting Services shows a balance of $6,300, but the balance per books shows a cash balance of $7,980. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $20. 2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30. 3. Checks outstanding totaled $260. 4. Bank service charges were $50. 5. Deposits in transit were $2,140. Which item(s) should be subtracted from the balance per books? A. Bank service charge B. Bank service charge and the note collected by the bank C. Checks outstanding and bank service charge D. None of the above are correct.

Question 14 of 20 5.0 Points The May bank statement for Accounting Services shows a balance of $6,300, but the balance per books shows a cash balance of $7,980. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $20. 2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30 3. Checks outstanding totaled $260. 4. Bank service charges were $50. 5. Deposits in transit were $2,140. The adjusted cash balance at the end of August should be: A. $7,620. B. $7,980. C. $9,810. D. $8,180.

Question 15 of 20 5.0 Points The person or company to whom a check is payable is called the: A. drawer. B. payer. C. drawee. D. payee.

Question 16 of 20 5.0 Points On a bank reconciliation, deposits added to the bank side are called: A. deposits in transit. B. deposits on hold. C. outstanding deposits. D. late deposits.

Question 17 of 20 5.0 Points Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should: A. decrease the ending cash balance on the bank statement. B. increase their cash account on the company’s books. C. decrease their cash account on the company’s books. D. increase the ending cash balance on the bank statement.

Question 18 of 20 5.0 Points The May bank statement for Accounting Services shows a balance of $6,300, but the balance per books shows a cash balance of $7,980. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $20. 2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30. 3. Checks outstanding totaled $260. 4. Bank service charges were $50. 5. Deposits in transit were $2,140. Which item(s) will require a journal entry to update the balance in the Cash account? A. Bank service charges, note collected by the bank, and error made by Accounting Services B. Checks outstanding and deposits in transit C. Bank service charges, note collected by the bank, and deposits in transit D. None of these answers are correct.

Question 19 of 20 5.0 Points Samantha’s Tutoring Service’s $200 petty cash fund has a shortage of $4. The facts are: $80 in valid receipts for expenses; $116 in coins and currency. The journal entry to replenish the petty cash fund would include a: A. credit to Cash for $80. B. debit to Cash Short/Over for $4. C. credit to Cash Short/Over for $4. D. credit to Petty Cash for $84.

Question 20 of 20 5.0 Points Information to calculate the adjusted cash balance for Sam’s Gift Wrapping is as follows: Cash balance per general ledger $2,100 Customer’s check returned NSF 75 Bank service charges 40 Deposits in transit 500 Outstanding checks 700 Customer’s note collected by bank 645 A. $2,430 B. $2,630 C. $2,330 D. $2,230

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