Question 1

Which of the following is not part of measuring external transactions?

Accepted Answer

A)  Using source documents to analyze accounts affected.
B)  Recording transactions.
C)  Making payments on all amounts owed.
D)  Analyzing transactions for their effect on the accounting equation.E) A) and D)
F) A) and C)

Question 2

A debit to an account balance always results in the balance increasing.

Accepted Answer

A) True 
 B)False  False

Question 3

Clement Company paid an account payable related to a previous utility bill of $1,000.This transaction should be recorded as follows on the payment date:

Accepted Answer

A)  Debit Accounts Payable $1,000,credit Cash $1,000.
B)  Debit Cash $1,000,credit Accounts Payable $1,000.
C)  Debit Utilities Expense $1,000,credit Cash $1,000.
D)  Debit Cash $1,000,credit Utilities Expense $1,000.E) A) and C)
F) A) and D)

Question 4

External transactions are transactions the firm conducts with a separate economic entity,such as selling products to a customer,purchasing supplies from a vendor,paying salaries to an employee,and borrowing money from a bank.

Accepted Answer

A) True 
 B)False  True

Question 5

The owner of an office building should report rent collected in advance as a debit to Cash and a credit to:

Accepted Answer

A)  A liability.
B)  An asset other than Cash.
C)  Revenue.
D)  Stockholders' equity.E) A) and B)
F) None of the above

Question 6

On January 1,Brad Inc.sold $30,000 in products to a customer on account.Then on January 10,Brad collected the cash on that account.What is the impact on Brad's accounting equation from the collection of cash on January 10?

Accepted Answer

A)  No net effect to the accounting equation.
B)  Assets increase and liabilities decrease.
C)  Assets decrease and liabilities decrease.
D)  Assets increase and stockholders' equity increases.E) None of the above
F) A) and B)

Question 7

If the liabilities of a company increased by $55,000 during a month and the stockholders' equity decreased by $21,000 during that same month,did assets increase or decrease and by how much?

Accepted Answer

A)  $34,000 increase.
B)  $55,000 increase.
C)  $34,000 decrease.
D)  $76,000 increase.E) C) and D)
F) A) and B)

Question 8

Selling common stock for cash is recorded with a debit to common stock.

Accepted Answer

A) True 
 B)False

Question 9

Providing services and receiving cash will:

Accepted Answer

A)  Increase assets and increase stockholders' equity.
B)  Increase assets and increase liabilities.
C)  Decrease assets and increase liabilities.
D)  Decrease liabilities and increase stockholders' equity.E) A) and D)
F) B) and D)

Question 10

Summer Leasing received $12,000 for 24 months rent in advance.How should Summer record this transaction?

Accepted Answer

A)  Debit Prepaid Rent;credit Rent Expense.
B)  Debit Cash;credit Unearned Revenue.
C)  Debit Cash;credit Service Revenue.
D)  Debit Rent Expense;credit Cash.E) C) and D)
F) B) and D)

Question 11

Purchasing office supplies on account causes assets to increase and liabilities to increase.

Accepted Answer

A) True 
 B)False  True

Question 12

Which of the following accounts would normally have a credit balance?

Accepted Answer

A)  Accounts Payable,Service Revenue,Common Stock.
B)  Salaries Payable,Unearned Revenue,Delivery Expense.
C)  Income Tax Payable,Service Revenue,Dividends.
D)  Cash,Repairs and Maintenance Expense,Dividends.E) B) and D)
F) B) and C)

Question 13

When a company provides services on account,the accounting equation would be affected as follows:

Accepted Answer

A)  Assets increase.
B)  Revenues increase.
C)  Assets increase and liabilities decrease.
D)  Assets increase and stockholders' equity increases.E) None of the above
F) A) and C)

Question 14

Purchasing supplies for cash has what effect on the accounting equation?

Accepted Answer

A)  Increase assets.
B)  Decrease stockholders' equity.
C)  Decrease liabilities.
D)  No effect.E) A) and B)
F) None of the above

Question 15

When the company pays stockholders a dividend,what is the effect on the accounting equation for that company?

Accepted Answer

A)  Decrease stockholders' equity and increase assets.
B)  Increase liabilities and increase assets.
C)  Decrease assets and decrease liabilities.
D)  Decrease assets and decrease stockholders' equity.E) B) and C)
F) A) and B)

Question 16

Receiving cash from an account receivable:

Accepted Answer

A)  Increases revenue and decreases an asset.
B)  Decreases a liability and increases an asset.
C)  Increases an asset and increases revenue.
D)  Increases one asset and decreases another asset.E) B) and D)
F) None of the above

Question 17

Jerome purchased a building for his business by signing a note to be repaid over the next ten years.Which of the following correctly describes how to record this transaction?

Accepted Answer

A)  Debit assets,credit liabilities.
B)  Debit assets,credit stockholders' equity.
C)  Debit liabilities,credit assets.
D)  Debit expenses,credit liabilities.E) B) and C)
F) A) and D)

Question 18

Consider the following list of accounts: Cash Retained Earnings
Service Revenue Utilities Expense
Salaries Expense Accounts Receivable
Accounts Payable Common Stock
Equipment Dividends
How many of these accounts have a normal debit balance?

Accepted Answer

A)  Four.
B)  Five.
C)  Six.
D)  Seven.E) None of the above
F) A) and D)

Question 19

Record the following transactions.If an entry is not required,state "No Entry."
(a)Started business by issuing 10,000 shares of common stock for $20,000.
(b)Hired Rebecca as an administrative assistant,promising to pay her $2,000 every two weeks.
(c)Rented a building for three years at $500 per month and paid six months' rent in advance.
(d)Purchased equipment for $5,400 cash.
(e)Purchased $1,800 of supplies on account.
(f)Provided services to customers for $7,800 cash.
(g)Paid employee salaries,$5,200.
(h)Paid for supplies purchased in item (e).
(i)Paid $800 for current advertising in a local newspaper.
(j)Paid utility bill of $1,300 for the current month.

Accepted Answer

The answer of Record the following transactions.If an entry is...

Question 20

Sooner purchased office supplies on account.The transaction would be recorded as:

Accepted Answer

A)  Debit Supplies,Credit Cash
B)  Debit Cash,Credit Accounts Payable
C)  Debit Accounts Payable,Credit Supplies
D)  Debit Supplies,Credit Accounts PayableE) A) and D)
F) A) and C)

Exam 2: The Accounting Cycle: During the Period

Which of the following is not part of measuring external transactions?

Correct Answer
verified

A debit to an account balance always results in the balance increasing.

Correct Answer
verified
False

Clement Company paid an account payable related to a previous utility bill of $1,000.This transaction should be recorded as follows on the payment date:

Correct Answer
verified

External transactions are transactions the firm conducts with a separate economic entity,such as selling products to a customer,purchasing supplies from a vendor,paying salaries to an employee,and borrowing money from a bank.

Correct Answer
verified
True

The owner of an office building should report rent collected in advance as a debit to Cash and a credit to:

Correct Answer
verified

On January 1,Brad Inc.sold $30,000 in products to a customer on account.Then on January 10,Brad collected the cash on that account.What is the impact on Brad's accounting equation from the collection of cash on January 10?

Correct Answer
verified

If the liabilities of a company increased by $55,000 during a month and the stockholders' equity decreased by $21,000 during that same month,did assets increase or decrease and by how much?

Correct Answer
verified

Selling common stock for cash is recorded with a debit to common stock.

Correct Answer
verified

Providing services and receiving cash will:

Correct Answer
verified

Summer Leasing received $12,000 for 24 months rent in advance.How should Summer record this transaction?

Correct Answer
verified

Purchasing office supplies on account causes assets to increase and liabilities to increase.

Correct Answer
verified
True

Which of the following accounts would normally have a credit balance?

Correct Answer
verified

When a company provides services on account,the accounting equation would be affected as follows:

Correct Answer
verified

Purchasing supplies for cash has what effect on the accounting equation?

Correct Answer
verified

When the company pays stockholders a dividend,what is the effect on the accounting equation for that company?

Correct Answer
verified

Receiving cash from an account receivable:

Correct Answer
verified

Jerome purchased a building for his business by signing a note to be repaid over the next ten years.Which of the following correctly describes how to record this transaction?

Correct Answer
verified

Consider the following list of accounts: Cash Retained Earnings Service Revenue Utilities Expense Salaries Expense Accounts Receivable Accounts Payable Common Stock Equipment Dividends How many of these accounts have a normal debit balance?

Correct Answer
verified

Correct Answer
verified

Sooner purchased office supplies on account.The transaction would be recorded as:

Correct Answer
verified

Exam 2: The Accounting Cycle: During the Period

Which of the following is not part of measuring external transactions?

Correct AnswerverifiedShow Answer

A debit to an account balance always results in the balance increasing.

Correct AnswerverifiedFalse

Clement Company paid an account payable related to a previous utility bill of $1,000.This transaction should be recorded as follows on the payment date:

Correct AnswerverifiedShow Answer

External transactions are transactions the firm conducts with a separate economic entity,such as selling products to a customer,purchasing supplies from a vendor,paying salaries to an employee,and borrowing money from a bank.

Correct AnswerverifiedTrue

The owner of an office building should report rent collected in advance as a debit to Cash and a credit to:

Correct AnswerverifiedShow Answer

On January 1,Brad Inc.sold $30,000 in products to a customer on account.Then on January 10,Brad collected the cash on that account.What is the impact on Brad's accounting equation from the collection of cash on January 10?

Correct AnswerverifiedShow Answer

If the liabilities of a company increased by $55,000 during a month and the stockholders' equity decreased by $21,000 during that same month,did assets increase or decrease and by how much?

Correct AnswerverifiedShow Answer

Selling common stock for cash is recorded with a debit to common stock.

Correct AnswerverifiedShow Answer

Providing services and receiving cash will:

Correct AnswerverifiedShow Answer

Summer Leasing received $12,000 for 24 months rent in advance.How should Summer record this transaction?

Correct AnswerverifiedShow Answer

Purchasing office supplies on account causes assets to increase and liabilities to increase.

Correct AnswerverifiedTrue

Which of the following accounts would normally have a credit balance?

Correct AnswerverifiedShow Answer

When a company provides services on account,the accounting equation would be affected as follows:

Correct AnswerverifiedShow Answer

Purchasing supplies for cash has what effect on the accounting equation?

Correct AnswerverifiedShow Answer

When the company pays stockholders a dividend,what is the effect on the accounting equation for that company?

Correct AnswerverifiedShow Answer

Receiving cash from an account receivable:

Correct AnswerverifiedShow Answer

Jerome purchased a building for his business by signing a note to be repaid over the next ten years.Which of the following correctly describes how to record this transaction?

Correct AnswerverifiedShow Answer

Consider the following list of accounts: Cash Retained Earnings Service Revenue Utilities Expense Salaries Expense Accounts Receivable Accounts Payable Common Stock Equipment Dividends How many of these accounts have a normal debit balance?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Sooner purchased office supplies on account.The transaction would be recorded as:

Correct AnswerverifiedShow Answer

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False

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True

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True

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