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| 1 | |
Assets are increased on the left side of the T-account. |
| | A) | True |
| | B) | False |
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| 2 | |
A credit always means an entry on the right side of an account. |
| | A) | True |
| | B) | False |
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| 3 | |
An increase in an expense is recorded as a debit. |
| | A) | True |
| | B) | False |
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| 4 | |
Liabilities are increased on the right side of the T-account. |
| | A) | True |
| | B) | False |
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| 5 | |
Expenses are increased on the right side of the T-account. |
| | A) | True |
| | B) | False |
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| 6 | |
A Trial Balance is used to help prepare Financial Statements |
| | A) | True |
| | B) | False |
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| 7 | |
The connecting link between the statement of owner's equity and the balance sheet is the withdrawals. |
| | A) | True |
| | B) | False |
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| 8 | |
In any transaction, the total dollar amount of debits must equal the total dollar amount of credits. |
| | A) | True |
| | B) | False |
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| 9 | |
An entry to Accounts Payable will be on the left side of the account if there is a decrease and on the right side of the account if there is an increase. |
| | A) | True |
| | B) | False |
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| 10 | |
If equipment costing $930 is bought by paying $300 as a down payment and the remaining $630 in 30 days, owner's equity is increased by $930. |
| | A) | True |
| | B) | False |
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| 11 | |
A trial balance checks the equality of debits and credits |
| | A) | True |
| | B) | False |
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| 12 | |
Net income is carried to the Statement of Owner's Equity |
| | A) | True |
| | B) | False |
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| 13 | |
Total Assets on the Balance sheet must always equal the net income on the Income Statement |
| | A) | True |
| | B) | False |
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| 14 | |
A T-account's left side is the debit side |
| | A) | True |
| | B) | False |
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| 15 | |
The first financial statement which is prepared is the Income Statement |
| | A) | True |
| | B) | False |
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| 16 | |
Which of the following classifications of accounts has/have a normal credit balance? |
| | A) | assets |
| | B) | expenses |
| | C) | drawing |
| | D) | revenues and liabilities |
| | E) | all of these |
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| 17 | |
A debit may signify a decrease in |
| | A) | owner's withdrawal account. |
| | B) | an asset account. |
| | C) | a liability and a revenue account. |
| | D) | an asset and a revenue account. |
| | E) | an expense account. |
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| 18 | |
The trial balance will not expose which of the following problems? |
| | A) | recording half an entry and leaving out an entire entry |
| | B) | leaving out an entire entry |
| | C) | recording half an entry |
| | D) | recording half an entry and recording both halves of an entry on the same side |
| | E) | recording both halves of an entry on the same side |
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| 19 | |
Which of the following is an asset account? |
| | A) | Sales |
| | B) | Office Equipment |
| | C) | Supplies Expense |
| | D) | Insurance Expense |
| | E) | none of these |
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| 20 | |
The T account is: |
| | A) | used by businesses to record the hiring of employees. |
| | B) | an asset account. |
| | C) | a tool used to understand the effects of increases and decreases in accounts. |
| | D) | a calculator used in preparing financial statements. |
| | E) | none of these. |
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| 21 | |
Which of the following describes the classification and normal balance of the Sales account? |
| | A) | revenue, credit |
| | B) | asset, credit |
| | C) | capital, debit |
| | D) | asset, debit |
| | E) | expense, debit |
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| 22 | |
If a $47 cash purchase of supplies is recorded as a $57 debit to Supplies and a $57 credit to Cash, the result will be that |
| | A) | the trial balance will be out of balance. |
| | B) | Supplies will be overstated and Cash will be understated. |
| | C) | the Supplies account will be overstated. |
| | D) | the Cash account will be understated. |
| | E) | all of these will be true. |
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| 23 | |
When a T account has several items on both sides, the balance of the account is written |
| | A) | on the side with the larger total. |
| | B) | on the side with the greatest number of items. |
| | C) | on the side with the least number of items. |
| | D) | on the side with the smaller total. |
| | E) | in none of these locations. |
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| 24 | |
To locate an error in a trial balance, |
| | A) | check footings and balances of the accounts. |
| | B) | verify figures transferred from the account to the trial balance. |
| | C) | look for the correct location of normal balances. |
| | D) | re-add. |
| | E) | do all of these. |
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| 25 | |
A trial balance is |
| | A) | reports net income at the end of an accounting period. |
| | B) | a listing of all the assets, liabilities, and owner's equity accounts that have balances. |
| | C) | a listing of all the revenue and expense accounts that have balances. |
| | D) | B and C |
| | E) | none of these. |
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| 26 | |
A purchase of supplies on account should be recorded as |
| | A) | a debit to Supplies and a credit to Accounts Receivable. |
| | B) | a debit to Supplies and a credit to Cash. |
| | C) | a debit to Accounts Payable and a credit to Supplies. |
| | D) | a debit to Supplies and a credit to Accounts Payable. |
| | E) | none of these. |
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| 27 | |
Which of the following describes the classification and normal balance of H. Gale, Capital? |
| | A) | owner's equity, debit |
| | B) | asset, debit |
| | C) | revenue, credit |
| | D) | expense, debit |
| | E) | none of these |
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| 28 | |
A business buys office equipment for cash. What effect will this transaction have on the accounts? |
| | A) | debit an expense account and credit an asset account |
| | B) | debit an asset account and credit an asset account |
| | C) | debit an asset account and credit an expense account |
| | D) | debit a liability account and credit an asset account |
| | E) | none of these |
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| 29 | |
The receipt of cash on account from a customer should be recorded as |
| | A) | a debit to Cash and a credit to Service Income. |
| | B) | a debit to Cash and a credit to Accounts Payable. |
| | C) | a debit to Cash and a credit to the Capital account. |
| | D) | a debit to Cash and a credit to Accounts Receivable. |
| | E) | none of these. |
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| 30 | |
The payment of wages to employees should be recorded as |
| | A) | a debit to Cash and a credit to Service Income. |
| | B) | a credit to Cash and a debit to Wages Expense. |
| | C) | a debit to Cash and a credit to the Capital account. |
| | D) | a debit to Cash and a credit to Accounts Receivable. |
| | E) | none of these. |
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