Chapter 1 and 2 Combine College Accounting 120

Question 1

0.5 out of 0.5 points

The communication stage of accounting is accomplished by

Selected Answer: reporting to decision makers.

Correct Answer: reporting to decision makers.

Question 2

0 out of 0.5 points

Which of the following is not a satisfactory statement of the accounting equation?

Selected Answer: Assets – Liabilities = Stockholders' Equity

Correct Answer: Assets = Liabilities – Stockholders' Equity

Question 3

0 out of 0.5 points

The purchase of land is an example of a(n)

Selected Answer: operating activity.

Correct Answer: investing activity.

Question 4

0 out of 0.5 points

A primary user of accounting information with a direct financial interest in the business is a

Selected Answer: taxing authority.

Correct Answer: creditor.

Question 5

0 out of 0.5 points

The statement of cash flows would disclose the purchase of a building for cash

Selected Answer: in the operating activities section.

Correct Answer: in the investing activities section.

Question 6

0 out of 0.5 points

Which of the following is not one of the broad principles underlying the accountant's code of professional ethics?

Selected Answer: Integrity

Correct Answer: Loyalty

Question 7

0 out of 0.5 points

Those who lend money or deliver goods and services before being paid are called

Selected Answer: underwriters.

Correct Answer: creditors.

Question 8

0 out of 0.5 points

The audit committee is responsible for all of the following except

Selected Answer: engaging the company's independent auditors.

Correct Answer: auditing the company's financial statements.

Question 9


Which of the following is considered by accountants to be a separate entity from its owner(s)?

Selected Answer: Sole proprietorship, partnership, and corporation

Correct Answer: Sole proprietorship, partnership, and corporation

Question 10

0 out of 0.5 points

The authoritative body currently responsible for establishing accounting practice is the

Selected Answer: Internal Revenue Service.

Correct Answer: Financial Accounting Standards Board.

Question 11

0 out of 0.5 points

The statement of cash flows would disclose the payment of a dividend

Selected Answer: in the investing activities section.

Correct Answer: in the financing activities section.

Question 12

0 out of 0.5 points

The Public Company Accounting Oversight Board was created by the

Selected Answer: IRS.

Correct Answer: Sarbanes-Oxley Act.

Question 13

0 out of 0.5 points

Which of the following accounts is not considered an asset?

Selected Answer: Inventory

Correct Answer: Retained Earnings

Question 14


The board of directors of a corporation is responsible for all of the following except

Selected Answer: carrying out the daily operations of the business.

Correct Answer: carrying out the daily operations of the business.

Question 15


The best definition of assets is the

Selected Answer:

resources belonging to a company having future benefit to the company.

Correct Answer: resources belonging to a company having future benefit to the company.

Question 16

0 out of 0.5 points

Flores Realty Corporation had the following balance sheet accounts and balances:

If the balance of the Building account were $8,000 and $3,000 of Accounts Payable were paid in cash, what would be the total liabilities and stockholders' equity?

Selected Answer: $18,000

Correct Answer: $23,000

Question 17


Use this information to answer the following question.

Here is the balance sheet for Abbot Box Company, Inc.:

If the equipment were sold for $13,000, then the Retained Earnings account would

Selected Answer: stay the same.

Correct Answer: stay the same.

Question 18


The measurement stage of accounting is accomplished by

Selected Answer: recording data.

Correct Answer: recording data.

Question 19

0 out of 0.5 points

One user of accounting information with an indirect financial interest in a business is

Selected Answer: an investor.

Correct Answer: a financial adviser.

Question 20

0 out of 0.5 points

A company's ability to attract and hold investment capital ultimately depends on its

Selected Answer: liquidity.

Correct Answer: profitability.

Question 21

0 out of 0.5 points

Standards for state and local governments are established by the

Selected Answer: IASB.

Correct Answer: GASB.

Question 22

0 out of 0.5 points

The group of users of accounting information charged with achieving the goals of the business is its

Selected Answer: auditors.

Correct Answer: management.

Question 23

0 out of 0.5 points

Which of the following groups uses accounting information primarily to help protect the public?

Selected Answer: Management

Correct Answer: Regulatory agencies

Question 24

0 out of 0.5 points

The intentional preparation of misleading financial statements, known as fraudulent financial reporting, can result from all of the following except

Selected Answer: fictitious sales or orders.

Correct Answer: recording a revenue that has been earned but not yet received.

Question 25


The net income figure appears in all the following financial statements except the

Selected Answer: balance sheet.

Correct Answer: balance sheet.

Question 26

0 out of 0.5 points

Which of the following is an agency of the U.S. government?

Selected Answer: FASB

Correct Answer: SEC

Question 27

0 out of 0.5 points

The separate entity concept requires that

Selected Answer:

transactions that involve an exchange of value be kept separate from those that do not.

Correct Answer:

the personal assets and liabilities of an owner not be shown on the business's financial statements.

Question 28


Which of the following is a regulatory agency?

Selected Answer: SEC

Correct Answer: SEC

Question 29

0 out of 0.5 points

The return on assets ratio is expressed in terms of

Selected Answer: dollars.

Correct Answer: a percentage.

Question 30

0 out of 0.5 points



If the balance in the Cash account were used to buy more equipment, then the total assets would

Selected Answer: increase by $8,000.

Correct Answer: remain unchanged.

Question 1

0 out of 0.5 points


Selected Answer:

cash owned by the company.


Question 2

0 out of 0.5 points


Selected Answer: Taxing authorities


Question 3


A liability would not include an obligation to

Selected Answer: hire an employee.

Correct Answer: hire an employee.

Question 4

0 out of 0.5 points

The purpose of an audit is to

Selected Answer: determine whether or not a company is a good credit risk.

Correct Answer: ascertain that the financial statements follow GAAP.

Question 5

0 out of 0.5 points


Selected Answer: GASB.


Question 6


Most business enterprises in the United States are

Selected Answer: sole proprietorships.

Correct Answer: sole proprietorships.

Question 7







Question 8

0 out of 0.5 points


Selected Answer: in the operating activities section.


Question 9

0 out of 0.5 points


Selected Answer: operating activity.


Question 10

0 out of 0.5 points

All of the following will affect retained earnings except

Selected Answer: dividends declared and paid.

Correct Answer: investments by owners.

Question 11

0 out of 0.5 points


Selected Answer: Trademark


Question 12

0 out of 0.5 points





Question 13

0 out of 0.5 points


Selected Answer: regulatory agency.


Question 14


Generally accepted accounting principles

Selected Answer: are changing continually.

Correct Answer: are changing continually.

Question 15


Which of the following is the most appropriate and modern definition of accounting?

Selected Answer:

The measurement, processing, and communication of financial information about an identifiable economic entity

Correct Answer:


Question 16


Carrying out professional responsibilities with competence and diligence is called

Selected Answer: due care.

Correct Answer: due care.

Question 17

0 out of 0.5 points


Selected Answer:

tax records be kept separate from financial reporting records.

Correct Answer:


Question 18

0 out of 0.5 points

Which of the following financial statements is concerned with the enterprise at a point in time?

Selected Answer: Income statement

Correct Answer: Balance sheet

Question 19

0 out of 0.5 points


Selected Answer: processing data.


Question 20

0 out of 0.5 points

Which of the following is an example of an investing activity?

Selected Answer: Paying taxes to the government

Correct Answer: Purchasing a building

Question 21

0 out of 0.5 points

The topic of foreign exchange rates relates most closely to the concept of

Selected Answer: separate entity.

Correct Answer: money measure.

Question 22


Which of the following transactions does not involve an exchange of value?

Selected Answer: Loss from theft

Correct Answer: Loss from theft

Question 23





Question 24

0 out of 0.5 points

An example of a monetary asset is

Selected Answer: Copyright.

Correct Answer: Accounts Receivable.

Question 25



If the balance of the Building account were $15,000 and if the equipment were sold for $7,000, what would be the total of stockholders' equity?



Question 26


All of the following statements are true about the Sarbanes-Oxley Act except

Selected Answer: it shields chief executives from criminal penalties.

Correct Answer: it shields chief executives from criminal penalties.

Question 27




Correct Answer: SEC

Question 28

0 out of 0.5 points

Dividends of a corporation are declared by its

Selected Answer: creditors.

Correct Answer: board of directors.

Question 29

0 out of 0.5 points


If the balance of the Building account were $14,000 and $3,000 of Accounts Payable were paid in cash, what would be the balance of the Common Stock account?



Question 30




Correct Answer: SEC

Question 1



Selected Answer: Retained Earnings


Question 2







Question 3


Transfer of ownership will not affect the continuity of a

Selected Answer: corporation.

Correct Answer: corporation.

Question 4



Selected Answer: profitability.


Question 5

0 out of 0.5 points


If the balance of the Building account were $24,000, what would be the total of liabilities and stockholders' equity?



Question 6


The corporate officers are responsible for

Selected Answer: carrying out corporate policy.

Correct Answer: carrying out corporate policy.

Question 7

0 out of 0.5 points

The processing stage of accounting is accomplished by

Selected Answer: [None Given]

Correct Answer: bookkeeping, computers, and information systems.

Question 8

0 out of 0.5 points


Selected Answer: comply with income tax regulations.


Question 9

0 out of 0.5 points


Selected Answer: it orders the SEC to draw up certain rules.


Question 10

0 out of 0.5 points

Which of the following transactions involves an exchange of value?

Selected Answer: Flood loss

Correct Answer: Sale of services

Question 11

0 out of 0.5 points


Selected Answer:

The interconnected network of subsystems necessary to operate a business

Correct The measurement, processing, and communication of financial

Answer: information about an identifiable economic entity

Question 12

0 out of 0.5 points


Selected Answer: dividends declared and paid.


Question 13


The development of international accounting standards is the primary function of the


Correct Answer: IASB.

Question 14

0 out of 0.5 points


Selected Answer: Independence


Question 15

0 out of 0.5 points


Selected Answer: underwriters.


Question 16

0 out of 0.5 points


Selected Answer: are accounting rules formulated by the Internal Revenue Service.


Question 17



Selected Answer: Accounts Receivable.


Question 18



Selected Answer: investing activity.


Question 19


Which of the following assets could be described as nonphysical?

Selected Answer: Patents

Correct Answer: Patents

Question 20

0 out of 0.5 points






Question 21

0 out of 0.5 points

Which of the following items has no effect on stockholders' equity?

Selected Answer: Revenue

Correct Answer: Land purchased

Question 22

0 out of 0.5 points


Selected Answer: stockholders.


Question 23

0 out of 0.5 points


Selected Answer: statement of retained earnings.


Question 24

0 out of 0.5 points

Companies listed on the stock exchanges must file financial statements with the

Selected Answer: Financial Accounting Standards Board.

Correct Answer: Securities and Exchange Commission.

Question 25


Which of the following represents the proper order of financial statement preparation?

Selected Answer:

Income statement, statement of retained earnings, balance sheet, statement of cash flows

Correct Answer:


Question 26

0 out of 0.5 points


Selected Answer: Assets – Stockholders' Equity = Liabilities


Question 27






Question 28



Selected Answer: Purchasing a building


Question 29



Selected Answer: Balance sheet


Question 30



Selected Answer: money measure.


Question 1






Question 2




Correct Answer: SEC

Question 3



Selected resources belonging to a company having future benefit to the

Answer: company.


Question 4



Selected Answer: Securities and Exchange Commission.


Question 5





Question 6





Question 7

0 out of 0.5 points

The correct order of the three stages of accounting is

Selected Answer: communication, processing, and measurement.

Correct Answer: measurement, processing, and communication.

Question 8




Correct Answer: SEC

Question 9





Question 10



Selected Answer: Sarbanes-Oxley Act.


Question 11





Question 12





Question 13

0 out of 0.5 points


Selected Answer: Accounts Receivable


Question 14



Selected Answer: management.


Question 15

0 out of 0.5 points

An auditor maintains no direct financial interest in the company he or she is auditing. The principle being followed is


Correct Answer: independence.

Question 16





Question 17


All of the following are considered nonexchange transactions except

Selected Answer: the sale of goods and services.

Correct Answer: the sale of goods and services.

Question 18

0 out of 0.5 points

All of the following items would appear on the balance sheet except


Correct Answer: Dividends

Question 19

0 out of 0.5 points

Following is the balance sheet for Abbot Box Company, Inc.:

If the balance in the Cash account were used to pay part of Accounts Payable, then total liabilities and stockholders' equity would


Correct Answer: decrease by $8,000.

Question 20





Question 21



Selected Answer: ascertain that the financial statements follow GAAP.


Question 22



Selected Answer: Assets = Liabilities – Stockholders' Equity


Question 23



Selected Answer: creditor.


Question 24



Selected Answer: in the financing activities section.


Question 25



Selected Answer: a percentage.


Question 26


Which of the following is an example of an operating activity?

Selected Answer: Selling goods and services to customers

Correct Answer: Selling goods and services to customers

Question 27







Question 28



Selected Answer:


Correct Answer:


Question 29





Question 30






Question 1



Selected Answer: board of directors.


Question 2






Question 3


Which of the following is an example of a financing activity?

Selected Answer: Paying off a loan

Correct Answer: Paying off a loan

Question 4





Question 5





Question 6

0 out of 0.5 points

An accounting measurement is concerned with all except which of the following?

Selected Answer: Separate entity

Correct Answer: Financial position

Question 7





Question 8


The processing stage of accounting is accomplished by

Selected Answer: bookkeeping, computers, and information systems.

Correct Answer: bookkeeping, computers, and information systems.

Question 9






Question 10





Question 11



Selected Answer: in the financing activities section.


Question 12





Question 13






Question 14



Selected Answer: Dividends


Question 15





Question 16





Question 17



Selected Answer: Sale of services


Question 18



Selected Answer: a financial adviser.


Question 19





Question 20



Selected Answer: Purchasing a building


Question 21



Selected Answer:


Correct Answer:


Question 22



Selected Answer: investments by owners.


Question 23





Question 24



Selected Answer:


Correct Answer:


Question 25





Question 26





Question 27



Selected Answer: auditing the company's financial statements.


Question 28


Following is the balance sheet for Abbot Box Company, Inc.:

If the balance in the Cash account were used to pay part of Accounts Payable, then total liabilities and stockholders' equity would

Selected Answer: decrease by $8,000.

Correct Answer: decrease by $8,000.

Question 29





Question 30

0 out of 0.5 points

Which of the following is legally a separate entity from its owner(s)?

Selected Answer: Sole proprietorship and partnership only

Correct Answer: Corporation only

Question 1





Question 2



Selected Answer: Financial position


Question 3





Question 4

0 out of 0.5 points

Stockholders' equity of a corporation would not show

Selected Answer: retained earnings.

Correct Answer: revenues and expenses.

Question 5





Question 6





Question 7





Question 8





Question 9





Question 10






Question 11





Question 12





Question 13




Correct Answer: SEC

Question 14





Question 15

0 out of 0.5 points


If the balance of the Common Stock account were $25,000, what would be the balance of the Building account?



Question 16



Selected Answer: Loyalty


Question 17



Selected Answer:


Correct Answer:


Question 18



Selected Answer: independence.


Question 19



Selected Answer:


Correct Answer:


Question 20





Question 21







Question 22





Question 23


Transfer of ownership will not affect the continuity of a

Selected Answer: corporation.

Correct Answer: corporation.

Question 24





Question 25





Question 26





Question 27





Question 28



Selected Answer: recording a revenue that has been earned but not yet received.


Question 29





Question 30






Question 1





Question 2





Question 3





Question 4





Question 5





Question 6





Question 7





Question 8





Question 9





Question 10





Question 11





Selected Answer: remain unchanged.


Question 12





Question 13





Question 14





Question 15



Selected Answer: Regulatory agencies


Question 16



Selected Answer: measurement, processing, and communication.


Question 17





Question 18





Question 19





Question 20





Question 21





Question 22



Selected Answer:



Question 23






Question 24





Question 25



Selected Answer:


Correct Answer:


Question 26





Question 27



Selected Answer: Sarbanes-Oxley Act.


Question 28





Question 29





Question 30





Question 1





Question 2





Question 3



Selected Answer: Sale of services


Question 4





Question 5





Question 6


Stockholders' equity of a corporation would not show

Selected Answer: revenues and expenses.

Correct Answer: revenues and expenses.

Question 7





Question 8





Question 9





Question 10





Question 11







Question 12





Question 13





Question 14





Question 15





Question 16





Question 17





Question 18





Question 19





Question 20



Selected Answer: measurement, processing, and communication.


Question 21





Question 22





Question 23





Question 24





Question 25





Question 26





Question 27





Question 28






Question 29



Selected Answer:


Correct Answer:


Question 30





Question 1





Question 2







Question 3



Selected Answer:



Question 4



Selected Answer: independence.


Question 5



Selected Answer: Financial position


Question 6





Question 7



If the balance of the Common Stock account were $25,000, what would be the balance of the Building account?



Question 8




Correct Answer: SEC

Question 9





Question 10



Selected Answer: profitability.


Question 11





Question 12





Question 13






Question 14





Question 15





Question 16





Question 17





Question 18





Question 19





Question 20





Question 21





Question 22





Question 23





Question 24





Question 25







Question 26






Question 27





Question 28





Question 29





Question 30


All of the following are considered nonexchange transactions except

Selected Answer: the sale of goods and services.

Correct Answer: the sale of goods and services

Chapter 2

Question 1

0 out of 0.5 points

Which of the following statements is not necessarily true about a journal entry?

Selected Answer: An explanation follows the journal entry.

Correct Answer: Liabilities are indented.

Question 2

0 out of 0.5 points

Which of the following errors will not cause the debit and credit columns of a trial balance to be unequal?

Selected Answer: The trial balance was incorrectly summed.

Correct Answer: A journal entry was posted twice.

Question 3

0 out of 0.5 points

For which of the following accounts would a related Accumulated Depreciation account be recorded?

Selected Answer: Office Supplies

Correct Answer: Office Equipment

Question 4

0 out of 0.5 points

The Office Supplies account is classified as a(n)

Selected Answer: stockholders' equity account.

Correct Answer: asset.

Question 5


A company that receives money in advance of performing a service

Selected Answer: debits Cash and credits Unearned Revenue.

Correct Answer: debits Cash and credits Unearned Revenue.

Question 6

0 out of 0.5 points

An $85 credit item is accidentally posted as a debit. The trial balance column totals will therefore differ by

Selected Answer: $85.

Correct Answer: $170.

Question 7


Which of the following events does not require a journal entry?

Selected Answer: Agreement to perform a service at a future date

Correct Answer: Agreement to perform a service at a future date

Question 8

0 out of 0.5 points

Which of the following accounts might be placed first in a journal entry?

Selected Answer: Unearned Revenue, when it has been increased

Correct Answer: Bonds Payable, when it has been decreased

Question 9

0 out of 0.5 points

Which of the following accounts has a normal credit balance?


Correct Answer: Common Stock

Question 10


The issue of deciding when to record a transaction is solved by

Selected Answer: deciding on a point of recognition.

Correct Answer: deciding on a point of recognition.

Question 11

0 out of 0.5 points

Here is the trial balance for McLeary Corporation:

If the balance of the Dividends account were $50,000 and the balance of the Wages Expense account were $5,000, what would be the amount of B?



Question 12

0 out of 0.5 points

Which of the following accounts is an asset?

Selected Answer: Notes Payable

Correct Answer: Prepaid Rent

Question 13

0 out of 0.5 points

Which of the following statements is true about a journal entry?

Selected Answer: The name of the month should be repeated for each entry.

Correct Answer: All debits are listed before any credits.

Question 14

0 out of 0.5 points

When a business records revenue before it has been earned, it has violated the measurement issue of

Selected Answer: evaluation.

Correct Answer: recognition.

Question 15


Which pair of accounts follows the rules of debit and credit in the same manner?

Selected Answer: Prepaid Rent and Advertising Expense

Correct Answer: Prepaid Rent and Advertising Expense

Question 16


The principal purpose of posting is to

Selected Answer: obtain updated account balances.

Correct Answer: obtain updated account balances.

Question 17

0 out of 0.5 points

Which of the following accounts might be used when there is a time delay between a transaction and its related cash flow?

Selected Answer: Fees Earned

Correct Answer: Accounts Payable

Question 18

0 out of 0.5 points

Which of the following accounts will eventually be followed with an inflow of cash?

Selected Answer: Unearned Revenue

Correct Answer: Accounts Receivable

Question 19

0 out of 0.5 points

Posting is performed by transferring information from the

Selected Answer: source documents to the journal.

Correct Answer: journal to the ledger.

Question 20

0 out of 0.5 points


If the trial balance showed a balance of $8,000 in the Wages Expense account and a balance of $34,000 in the Advertising Fees Earned account, what would be the amount of A?



Question 21

0 out of 0.5 points

The primary purpose of the trial balance is to test the

Selected Answer: analysis of transactions.

Correct Answer: equality of debit and credit balances in the ledger.

Question 22

0 out of 0.5 points

Which of the following bookkeeping techniques generally is not acceptable?

Selected Answer: Dollar signs on financial statements

Correct Answer: Commas and periods in ruled columns

Question 23

0 out of 0.5 points

Which of the following accounts probably would be listed before the others in a chart of accounts?


Correct Answer: Accumulated Depreciation, Buildings

Question 24

0 out of 0.5 points

The Post. Ref. column in the general journal is used to show that an amount has been posted to the ledger when which of the following is placed in it?

Selected Answer: Journal number

Correct Answer: Account number

Question 25

0 out of 0.5 points

Unearned revenues are recorded by companies that

Selected Answer:

receive money at the time the performance of a service is complete.

Correct Answer: receive money in advance of the performance of a service.

Question 26

0 out of 0.5 points

Which of the following is an illustration of the classification issue?

Selected Answer:

At what amount should an old machine be shown on the balance sheet?

Correct Answer: Should tools be recorded as an asset or as an expense?

Question 27

0 out of 0.5 points

A dividend will reduce which of the following accounts?

Selected Answer: Common Stock


Question 28

0 out of 0.5 points

When a company has performed a service but has not yet received payment, it

Selected Answer: debits Revenue from Services and credits Accounts Payable.

Correct Answer: debits Accounts Receivable and credits Revenue from Services.

Question 29

0 out of 0.5 points

A transaction in which six months' rent is paid in advance results in a credit to Cash and a debit to

Selected Answer: Rent Receivable.

Correct Answer: Prepaid Rent.

Question 30

0 out of 0.5 points

Which of the following errors will cause a trial balance to be out of balance?

Selected Answer:

Omitting an entire transaction

Correct Answer: Placing a debit balance amount into the credit balance column of the ledger

Question 1

0 out of 0.5 points

The cash return on assets shows how much cash is generated by each dollar of

Selected Answer: net income.

Correct Answer: assets invested in operations.

Question 2


Which of the following accounts is increased with a credit?


Correct Answer: Fees Earned

Question 3

0 out of 0.5 points




Question 4


Office supplies become expenses

Selected Answer: when they are consumed (used up).

Correct Answer: when they are consumed (used up).

Question 5






Question 6

0 out of 0.5 points

The account most recently posted is determined most efficiently by referring to the

Selected Answer: balance column of the ledger.

Correct Answer: Post. Ref. column of the general journal.

Question 7

0 out of 0.5 points

To find an explanation of a transaction, one should look at the

Selected Answer: trial balance.

Correct Answer: journal.

Question 8



Selected Answer: Should tools be recorded as an asset or as an expense?


Question 9

0 out of 0.5 points


Selected Answer: A debit was posted to an account as a credit.


Question 10

0 out of 0.5 points

If Accounts Receivable has debit postings of $29,000, credit postings of $22,000, and a normal ending balance of $24,000, which of the following was its beginning balance?

Selected Answer: $17,000 Cr.

Correct Answer: $17,000 Dr.

Question 11

0 out of 0.5 points


Selected Answer: recording of transactions.


Question 12



Selected Answer: Prepaid Rent


Question 13

0 out of 0.5 points




Question 14

0 out of 0.5 points

Which of the following accounts probably would be listed after the others in a chart of accounts?

Selected Answer: Unearned Art Fees

Correct Answer: Art Fees Earned

Question 15


Which of the following is a business event that is not considered a recordable transaction?

Selected Answer: A customer inquires about the availability of a service.

Correct Answer: A customer inquires about the availability of a service.

Question 16





Question 17

0 out of 0.5 points

The cost principle relates most closely to the

Selected Answer: recognition point.

Correct Answer: valuation issue.

Question 18

0 out of 0.5 points

Which of the following accounts should be credited in a journal entry?

Selected Answer: Wages Expense, when it has been increased

Correct Answer: Accounts Receivable, when it has been decreased

Question 19

0 out of 0.5 points

Which of the following business events is not a transaction?

Selected Answer: Paying wages

Correct Answer: Signing a contract

Question 20

0 out of 0.5 points

When a service has been performed, but no cash has been received, which of the following statements is true?

Selected Answer: The entry would include a debit to Accounts Payable.

Correct Answer: The entry would include a debit to Accounts Receivable.

Question 21

0 out of 0.5 points

Which of the following transactions decreases both assets and stockholders' equity?

Selected Answer: Advance payment made for insurance

Correct Answer: Declaration and payment of a dividend

Question 22

0 out of 0.5 points

Which of the following events does not result in the recording of an expense?

Selected Answer: Receipt of a bill from the telephone company

Correct Answer: Payment of a dividend

Question 23

0 out of 0.5 points


Selected Answer: source documents to the journal.


Question 24

0 out of 0.5 points


Selected Answer: Office Supplies


Question 25



Selected Answer: debits Accounts Receivable and credits Revenue from Services.


Question 26

0 out of 0.5 points

When a business erroneously records expenses as assets, it has violated the measurement issue of

Selected Answer: valuation.

Correct Answer: classification.

Question 27

0 out of 0.5 points

Which of the following errors will not cause the debit and credit columns of the trial balance to be unequal?

Selected Answer:

The account balance was carried to the wrong column of the trial balance.

Correct Answer: A debit entry was recorded in the wrong account.

Question 28

0 out of 0.5 points


Selected Answer: The bookkeeper forgot to journalize a transaction.

Correct Answer: A credit was posted to an account as a debit.

Question 29

0 out of 0.5 points

A $4,000 machine is purchased by paying $1,000 cash and issuing a promissory note for the remainder. The journal entry should include a

Selected Answer: debit to Cash.

Correct Answer: credit to Notes Payable.

Question 30

0 out of 0.5 points

Which of the following accounts will not affect stockholders' equity?


Correct Answer: Land

Question 1

0 out of 0.5 points

All of the following actions can help a business manage its cash flows except

Selected Answer: be efficient in making collections from its customers.

Correct Answer: pay for all expenditures immediately.

Question 2



Selected Answer: asset.


Question 3

0 out of 0.5 points


Selected Answer: pay money at the time the performance of a service is complete.


Question 4

0 out of 0.5 points

A $65 credit item is posted as a debit. The trial balance column totals therefore will differ by



Question 5



Selected Answer: Bonds Payable, when it has been decreased


Question 6

0 out of 0.5 points





Question 7





Question 8

0 out of 0.5 points

Which of the following is not considered a type of equipment?

Selected Answer: Filing cabinet

Correct Answer: Office supplies

Question 9

0 out of 0.5 points

The Post. Ref. column in the general ledger shows that an amount has been posted when which of the following is placed in it?

Selected Answer: A check mark

Correct Answer: The journal page number

Question 10

0 out of 0.5 points

Which of the following is not a measurement issue in accounting?

Selected Answer: Valuation

Correct Answer: Evaluation

Question 11

0 out of 0.5 points

Which of the following accounts is classified differently from the others listed?



Question 12

0 out of 0.5 points




Question 13


When collection is made on Accounts Receivable,

Selected Answer: total assets remain the same.

Correct Answer: total assets remain the same.

Question 14

0 out of 0.5 points


Selected Answer:

The Post. Ref. column is left blank until after the entry has been posted.


Question 15


Which of the following accounts will eventually be followed with an outflow of cash?

Selected Answer: Accounts Payable


Question 16



Selected Answer: A journal entry was posted twice.


Question 17

0 out of 0.5 points


Selected Answer: Rent Revenue.


Question 18


Which of the following terms does not mean the same as the others?

Selected Answer: Footing

Correct Answer: Footing

Question 19

0 out of 0.5 points

Which pair of accounts follows the rules of debit and credit in the opposite manner?

Selected Answer: Advertising Expense and Land

Correct Answer: Dividends and Medical Fees Earned

Question 20


When a magazine company receives advance payment for a subscription, it

Selected Answer: debits Cash and credits Unearned Subscriptions Revenue.

Correct Answer: debits Cash and credits Unearned Subscriptions Revenue.

Question 21

0 out of 0.5 points


Selected Answer: credit to Notes Receivable.


Question 22

0 out of 0.5 points


Selected Answer: balance column of the ledger.


Question 23

0 out of 0.5 points

All of the following are examples of source documents except

Selected Answer: invoices.

Correct Answer: journals.

Question 24

0 out of 0.5 points

The Unearned Fees account is classified as a(n)


Correct Answer: liability.

Question 25

0 out of 0.5 points

Which of the following accounts has a normal debit balance?



Question 26


The process of transferring journal entry information from the journal to the ledger is called

Selected Answer: posting.

Correct Answer: posting.

Question 27

0 out of 0.5 points


Selected Answer: assigning historical cost to the transaction.


Question 28

0 out of 0.5 points


Selected Answer: total revenue.


Question 29



Selected Answer: The Post. Ref. column is left blank until entries are posted.

Correct Answer: The Post. Ref. column is left blank until entries are posted.

Question 30

0 out of 0.5 points


If the trial balance showed a balance of $7,000 in the Dividends account and a balance of $15,500 in the Wages Expense account, what would be the amount of Advertising Fees Earned for the period?



Question 1


Payment on a portion of Accounts Payable will

Selected Answer: not affect stockholders' equity.

Correct Answer: not affect stockholders' equity.

Question 2

0 out of 0.5 points

The declaration and payment of a dividend will

Selected Answer: not affect total assets.

Correct Answer: decrease stockholders' equity.

Question 3

0 out of 0.5 points

Which of the following accounts is increased with a debit?

Selected Answer: Rent Payable


Question 4





Question 5

0 out of 0.5 points

Which of the following does not affect retained earnings?

Selected Answer: Earning of revenues

Correct Answer: Investments by stockholders

Question 6

0 out of 0.5 points

A company that receives money in advance of performing a service

Selected Answer: debits Unearned Revenue and credits Accounts Payable.

Correct Answer: debits Cash and credits Unearned Revenue.

Question 7

0 out of 0.5 points


Selected Answer: equality of debit and credit entries in the journal.


Question 8

0 out of 0.5 points


Selected Answer: debits Prepaid Subscriptions and credits Cash.


Question 9

0 out of 0.5 points

The general journal does not have a column titled

Selected Answer: Date.

Correct Answer: Account Balance.

Question 10


Which of the following accounts is not a stockholders' equity account?


Correct Answer: Notes Payable

Question 11

0 out of 0.5 points


Selected Answer: Notes Receivable


Question 12

0 out of 0.5 points


Selected Answer: Purchase of a one-year insurance policy


Question 13

0 out of 0.5 points


Selected Answer:

The Post. Ref. column is left blank until after the entry has been posted.


Question 14

0 out of 0.5 points

To determine the balance of a particular account, one should refer to the

Selected Answer: chart of accounts.

Correct Answer: ledger.

Question 15

0 out of 0.5 points




Question 16





Question 17

0 out of 0.5 points




Question 18

0 out of 0.5 points

Which of the following errors will cause the trial balance to be out of balance?

Selected Answer: An entire transaction was omitted from the general journal.

Correct Answer: The balance of an account was incorrectly computed.

Question 19

0 out of 0.5 points


Selected Answer: A company pays an employee for work performed.


Question 20

0 out of 0.5 points

Which of the following transactions increases both assets and stockholders' equity?

Selected Answer: Received a bank loan

Correct Answer: Rendered a service, payment not yet received

Question 21






Question 22

0 out of 0.5 points



Correct Answer: Rent Expense

Question 23

0 out of 0.5 points


If the trial balance showed a balance of $4,000 in the Wages Expense account and a balance of $30,000 in the Advertising Fees Earned account, what would be the amount of Dividends?



Question 24

0 out of 0.5 points


Selected Answer: Journal page number


Question 25

0 out of 0.5 points

Which of the following accounts is decreased with a debit?

Selected Answer: Cash


Question 26

0 out of 0.5 points


Selected Answer: evaluation.


Question 27

0 out of 0.5 points


Selected Answer: properly classifying the transaction.


Question 28





Question 29

0 out of 0.5 points




Question 30

0 out of 0.5 points


Selected Answer:

Posting a debit to Land as a debit to Machinery


Question 1





Question 2



Selected Answer: equality of debit and credit balances in the ledger.


Question 3

0 out of 0.5 points

If Accounts Payable has debit postings of $17,000, credit postings of $14,000, and a normal ending balance of $6,000, what was its beginning balance?

Selected Answer: $9,000 Dr.

Correct Answer: $9,000 Cr.

Question 4





Question 5





Question 6



Selected Answer: Office Equipment


Question 7






Question 8


Which of the following accounts will not affect stockholders' equity?

Selected Answer: Land

Correct Answer: Land

Question 9






Question 10





Question 11





Question 12





Question 13



Selected Answer: Advertising Fees Earned

Correct Answer: Advertising Fees Earned

Question 14





Question 15



Selected Answer: A debit entry was recorded in the wrong account.


Question 16

0 out of 0.5 points


Selected Answer: The Post. Ref. column is filled in prior to posting.


Question 17



Selected Answer: valuation issue.


Question 18



Selected Answer: Investments by stockholders


Question 19



Selected Answer: The balance of an account was incorrectly computed.


Question 20



Selected Answer: Liabilities are indented.


Question 21



Selected Answer: Accumulated Depreciation, Buildings


Question 22





Question 23


Office supplies become expenses

Selected Answer: when they are consumed (used up).

Correct Answer: when they are consumed (used up).

Question 24



Selected Answer: journal to the ledger.


Question 25



Selected Answer: Rent Expense


Question 26






Question 27





Question 28





Question 29



Selected Answer:

Placing a debit balance amount into the credit balance column of the ledger


Question 30


When a business reports an asset at an inflated dollar amount, it has violated the measurement issue of


Correct Answer: valuation.

Question 1





Question 2





Question 3





Question 4





Question 5





Question 6


Which of the following accounts is decreased with a credit?

Selected Answer: Insurance Expense

Correct Answer: Insurance Expense

Question 7

0 out of 0.5 points

The chart of accounts is the starting point for a



Question 8





Question 9





Question 10



Selected Answer: Post. Ref. column of the general journal.


Question 11





Question 12



Selected Answer: Account Balance.


Question 13



Selected Answer: All debits are listed before any credits.


Question 14



Selected Answer: Office supplies


Question 15



Selected Answer: Declaration and payment of a dividend


Question 16


When a business reports an asset at an inflated dollar amount, it has violated the measurement issue of


Correct Answer: valuation.

Question 17





Question 18





Question 19


Typically, the chart of accounts begins with

Selected Answer: asset accounts.

Correct Answer: asset accounts.

Question 20





Question 21





Question 22

0 out of 0.5 points

If office equipment is sold at cost in exchange for a promissory note,

Selected Answer: total assets decrease.


Question 23





Question 24





Question 25

0 out of 0.5 points

Which of the following gives the correct sequence of accounting procedures?

Selected Answer: Financial statements, journal, ledger, trial balance

Correct Answer: Journal, ledger, trial balance, financial statements

Question 26



Selected Answer: Signing a contract


Question 27





Question 28



Selected Answer: The journal page number


Question 29



Selected Answer: Accounts Receivable, when it has been decreased


Question 30





Question 1

0 out of 0.5 points

The purpose of the ledger is to

Selected Answer:

make sure that all assets, liabilities, etc., have credit balances at all times.

Correct Answer: maintain a separate account for each asset, liability, etc.

Question 2



Selected Answer: Signing a contract


Question 3



Selected Answer: A credit was posted to an account as a debit.


Question 4





Question 5


When a company receives an electric bill but does not pay it right away, it should

Selected Answer: debit Utilities Expense and credit Accounts Payable.

Correct Answer: debit Utilities Expense and credit Accounts Payable.

Question 6





Question 7





Question 8





Question 9





Question 10





Question 11





Question 12





Question 13





Question 14



Selected Answer: Payment of a dividend


Question 15


If Accounts Payable has debit postings of $17,000, credit postings of $14,000, and a normal ending balance of $6,000, what was its beginning balance?


Correct Answer: $9,000 Cr.

Question 16

0 out of 0.5 points


Selected Answer: The entry would include a debit to Accounts Payable.


Question 17






Question 18





Question 19



Selected Answer: receive money in advance of the performance of a service.


Question 20





Question 21





Question 22





Question 23

0 out of 0.5 points

Which of the following is a business event that is also considered a recordable transaction?

Selected Answer: A company orders a product from a supplier.

Correct Answer: A customer purchases merchandise.

Question 24



Selected Answer: Account number


Question 25





Question 26



Selected Answer: Art Fees Earned


Question 27





Question 28



Selected Answer: The balance of an account was incorrectly computed.


Question 29





Question 30





Question 1





Question 2



Selected Answer: Prepaid Insurance

Correct Answer: Prepaid Insurance

Question 3





Question 4



Selected Answer: Bonds Payable, when it has been decreased


Question 5





Question 6


To determine the balance of a particular account, one should refer to the

Selected Answer: ledger.


Question 7






Question 8





Question 9



Selected Answer: journals.


Question 10





Question 11





Question 12





Question 13





Question 14





Question 15





Question 16



Selected Answer: equality of debit and credit balances in the ledger.


Question 17





Question 18



Selected Answer: Office supplies


Question 19





Question 20



Selected Answer: Commas and periods in ruled columns


Question 21



Selected Answer: Investments by stockholders


Question 22





Question 23



Selected Answer: journal.


Question 24



Selected Answer: The entry would include a debit to Accounts Receivable.


Question 25





Question 26





Question 27





Question 28



Selected Answer: Journal, ledger, trial balance, financial statements


Question 29

0 out of 0.5 points


Selected Answer: debit Utilities Expense and credit Accounts Receivable.


Question 30





Question 1



Selected Answer: Prepaid Rent.


Question 2






Question 3

0 out of 0.5 points

Here is the trial balance for McLeary Corporation:McLeary Corporation

Trial Balance

January 31, 20x7

Cash $7,000

Accounts Receivable 2,000

Art Supplies 3,000

Office Supplies 5,000

Prepaid Rent 7,000

Prepaid Insurance 5,000

Art Equipment 5,000

Office Equipment 3,000

Accounts Payable $10,000

Common Stock 5,000

Retained Earnings 5,000

Dividends ?

Advertising Fees Earned ?

Wages Expense ?

Utilities Expense 5,000

Telephone Expense 3,000

$ A $ B

On the trial balance, total assets equal

Selected Answer: $45,000.

Correct Answer: $37,000.

Question 4





Question 5





Question 6





Question 7



Selected Answer: credit to Notes Payable.


Question 8



Selected Answer: pay for all expenditures immediately.


Question 9





Question 10





Question 11


Which of the following accounts is decreased with a debit?



Question 12





Question 13





Question 14

0 out of 0.5 points


Selected Answer: How to classify the items of a business transaction

Correct Answer: Where to record a business transaction

Question 15





Question 16





Question 17





Question 18





Question 19





Question 20





Question 21





Question 22





Question 23



Selected Answer: The entry would include a debit to Accounts Receivable.


Question 24

0 out of 0.5 points

A purchase is recognized in the accounting records when

Selected Answer: the purchase requisition is sent to the purchasing department.

Correct Answer: title transfers from the seller to the buyer.

Question 25



Selected Answer: valuation issue.


Question 26



Selected Answer: The journal page number


Question 27





Question 28





Question 29





Question 30





Question 1





Question 2



Selected Answer: Accounts Receivable, when it has been decreased


Question 3


Which of the following accounts is decreased with a credit?

Selected Answer: Insurance Expense

Correct Answer: Insurance Expense

Question 4






Question 5


If office equipment is sold at cost in exchange for a promissory note,



Question 6





Question 7



Selected Answer: Journal, ledger, trial balance, financial statements


Question 8





Question 9


Which pair of accounts follows the rules of debit and credit in the opposite manner?

Selected Answer: Dividends and Medical Fees Earned

Correct Answer: Dividends and Medical Fees Earned

Question 10


Which of the following transactions increases both assets and stockholders' equity?

Selected Answer: Rendered a service, payment not yet received

Correct Answer: Rendered a service, payment not yet received

Question 11





Question 12





Question 13


When a business erroneously records expenses as assets, it has violated the measurement issue of

Selected Answer: classification.

Correct Answer: classification.

Question 14





Question 15



Selected Answer: The Post. Ref. column is left blank until entries are posted.

Correct Answer: The Post. Ref. column is left blank until entries are posted.

Question 16





Question 17





Question 18





Question 19





Question 20





Question 21






Question 22



Selected Answer: recognition.


Question 23





Question 24





Question 25





Question 26





Question 27





Question 28



Selected Answer: assets invested in operations.


Question 29



Selected Answer: debit Utilities Expense and credit Accounts Payable.


Question 30





Question 1



Selected Answer: Prepaid Rent.


Question 2



Selected Answer: journals.


Question 3





Question 4





Question 5






Question 6





Question 7






Question 8



Selected Answer: pay for all expenditures immediately.


Question 9





Question 10





Question 11





Question 12





Question 13


Here is the trial balance for McLeary Corporation:McLeary Corporation

Trial Balance

January 31, 20x7

Cash $7,000

Accounts Receivable 2,000

Art Supplies 3,000

Office Supplies 5,000

Prepaid Rent 7,000

Prepaid Insurance 5,000

Art Equipment 5,000

Office Equipment 3,000

Accounts Payable $10,000

Common Stock 5,000

Retained Earnings 5,000

Dividends ?

Advertising Fees Earned ?

Wages Expense ?

Utilities Expense 5,000

Telephone Expense 3,000

$ A $ B

On the trial balance, total assets equal

Selected Answer: $37,000.

Correct Answer: $37,000.

Question 14





Question 15





Question 16





Question 17





Question 18



Selected Answer: Account Balance.


Question 19





Question 20





Question 21


Which of the following statements is false about a journal entry?

Selected Answer: Accounts that are increased are always listed first.

Correct Answer: Accounts that are increased are always listed first.

Question 22


A purchase is recognized in the accounting records when

Selected Answer: title transfers from the seller to the buyer.

Correct Answer: title transfers from the seller to the buyer.

Question 23


The chart of accounts is the starting point for a

Selected Answer: ledger.


Question 24



Selected Answer: Where to record a business transaction

Correct Answer: Where to record a business transaction

Question 25






Question 26





Question 27



Selected Answer: Commas and periods in ruled columns


Question 28





Question 29





Question 30





Chapter 1 and 2 Combine College Accounting 120

Documents

correct answer

dividend selected answer

following question

selected inventory

points sole proprietorship

following financial

following accounts

following groups