978-0134125053 Chapter 2 Part 2

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17) A T-account has a $789 debit balance. This account is most likely NOT:

A) Common Stock.

B) Land.

C) Advertising Expense.

D) Dividends.

Question Type: Application

18) A T-account has a $426 debit balance. This account is most likely:

A) Income Taxes Payable.

B) Common Stock.

C) Cash.

D) Magazine Sales.

Question Type: Application

19) A T-account has a $312 credit balance. This account is most likely NOT:

A) Accounts Receivable.

B) Bicycle Repair Revenue.

C) Wages Payable.

D) Common Stock.

Question Type: Application

20) A T-account has a $864 credit balance. This account is most likely:

A) Office Equipment.

B) Rent Expense.

C) Dividends.

D) Sales Revenue.

Question Type: Application

21) A T-account has a $1,250 credit balance. This account is most likely:

A) an expense.

B) a dividend account.

C) an asset.

D) a stock account.

Question Type: Application

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22) Debit means:

A) decrease.

B) increase.

C) the right side of an account.

D) the left side of an account.

Question Type: Concept

23) Credit means:

A) decrease.

B) increase.

C) the right side of an account.

D) the left side of an account.

Question Type: Concept

24) An example of accounts with normal debit balances would be:

A) liabilities.

B) expenses.

C) revenues.

D) Stockholders‘ Equity.

Question Type: Concept

25) An example of accounts with normal credit balances would be:

A) revenues.

B) assets.

C) expenses.

D) dividends.

Question Type: Concept

26) A T-account has which of the following three major parts?

A) A debit side, a credit side, and a balance

B) A debit side, a credit side, and a total column

C) A title, a current date, and a balance

D) A title, a debit side, and a credit side

Question Type: Concept

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27) The fact that each transaction has a dual effect on the accounting equation provides the basis

for what is called:

A) single-entry accounting.

B) double-entry accounting.

C) compound-entry accounting.

D) multiple-entry accounting.

Question Type: Concept

28) The difference between the total debits and total credits of an account is called a:

A) trial balance.

B) sub-total.

C) ruling.

D) balance.

Question Type: Concept

29) When the bank takes money out of a company’s account, why does the bank say that they

have debited that account?

A) The bank has increased the company‘s assets and assets increase with debits.

B) The bank has decreased its’ liability to the company and liabilities decrease with debits.

C) The bank has decreased the company’s assets and assets decrease with debits.

D) The bank has increased its’ liability to the company and liabilities increase with debits.

Question Type: Concept

30) A company has a $4568 debit balance in its cash account. Given this information, which of

the following is a TRUE statement?

A) It is not normal for a business to have this much cash, therefore this is NOT a normal account

balance.

B) It is NOT ever normal for the cash account to have a debit balance.

C) Normal account balances differ from company to company; therefore it is impossible to

evaluate the given statement without more information.

D) It is ALWAYS normal for the cash account to have a debit balance.

Question Type: Concept

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31) A company has an $11,263 credit balance in the payable accounts. Given this information,

which of the following is a TRUE statement?

A) It is NOT normal for payable accounts to have a credit balance.

B) Not enough information provided, since normal account balances are different for each

company.

C) It is ALWAYS normal for payable accounts to have a credit balance.

D) Payable accounts shouldn’t be this high, so this is not a normal balance.

Question Type: Concept

32) A company has a $14,457 credit balance in the cash account. Given this information, which

of the following is a TRUE statement?

A) This is NOT a normal account balance—companies don’t normally have this much cash on

hand.

B) It is NOT normal for the cash account to have a credit balance.

C) Not enough information provided, since normal account balances are different for each

company.

D) It is ALWAYS normal for the cash account to have a credit balance.

Question Type: Concept

33) A company has a $26,329 debit balance in the payable accounts. Given this information,

which of the following is a TRUE statement?

A) It is NOT normal for payable accounts to have a debit balance

B) Not enough information provided, since normal account balances are different for each

company.

C) Payable accounts don’t tend to run this high, so this is not a normal balance.

D) It is ALWAYS normal for payable accounts to have a debit balance.

Question Type: Concept

34) Revenues ________ Retained Earnings, and increase on the ________ side.

A) increase, debit

B) increase, credit

C) decrease, debit

D) decrease, credit

Question Type: Concept

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35) Expenses ________ Retained Earnings, and increase on the ________ side.

A) increase, debit

B) increase, credit

C) decrease, debit

D) decrease, credit

Question Type: Concept

36) Given the following T-Account information, what is the balance of the supplies account?

Supplies 132

1/4

250

1/12

420

1/18

195

A) $475 debit balance

B) $475 credit balance

C) $670 debit balance

D) $195 credit balance

Question Type: Application

37) Given the following T-Account information, what is the balance in accounts payable?

Accounts Payable 212

1/7

425

1/21

200

1/4

960

A) $335 debit balance

B) $625 debit balance

C) $335 credit balance

D) $960 credit balance

Question Type: Application

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2.3 Demonstrate the use of the general journal and the general ledger to record business

transactions

1) The general journal was developed to organize transactions by account.

Question Type: Concept

2) The general journal is used to record the events (transactions) of a business.

Question Type: Concept

3) The act of recording a transaction is called “journalizing.”

Question Type: Concept

4) Journalizing is the transfer of information from the general journal to the general ledger.

Question Type: Concept

5) The posting reference column of the general journal will include the number of the account to

which the information is being posted.

Question Type: Concept

6) The posting reference column of the general ledger shows the sources of the transferred

information.

Question Type: Concept

7) Transactions are recorded in order of the dollar amount of the transaction.

Question Type: Concept

8) Chronological order dictates the order in which transactions are journalized.

Question Type: Concept

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9) The difference between total debits and total credits is known as the balance.

Question Type: Concept

10) If an account’s total credits are more than its total debits, then it has a positive balance.

Question Type: Concept

11) The Caesar Coffee Company pays wages in the amount of $12,000. This transaction

includes a credit to Wages Expense.

Question Type: Application

12) Danio Corp performs services on account. This transaction includes a debit to Accounts

Receivable.

Question Type: Application

13) Sydney’s Sails pays dividends at the end of the year. This transaction includes a debit to

Cash.

Question Type: Application

14) Yukon Inc. pays wages in the amount of $15,000. This transaction includes a:

A) debit to Cash.

B) credit to Wages Expense.

C) credit to Cash.

D) credit to Revenue.

Question Type: Application

15) The account “Cash” began with a zero balance and then had the following changes: increase

of $280, decrease of $90, increase of $125 and a decrease of $40. The final balance is a:

A) debit balance of $275.

B) credit balance of $275.

C) debit balance of $405.

D) credit balance of $130.

Question Type: Application

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16) The account “Notes Payable” began with a zero balance and then had the following changes:

increase of $700, increase of $300, decrease of $600, and an increase of $280. The final balance

is a:

A) credit balance of $600.

B) debit balance of $1,280.

C) credit balance of $680.

D) debit balance of $680.

Question Type: Application

17) The first step in analyzing a transaction is to determine:

A) if the account balance will increase or decrease.

B) the accounts that are involved.

C) the type of accounts that are involved.

D) which accounts are to be debited and credited.

Question Type: Concept

18) The second step in analyzing a transaction is to determine:

A) if the account balance will increase or decrease.

B) the accounts that are involved.

C) the type of accounts that are involved.

D) which accounts are to be debited and credited.

Question Type: Concept

19) The third step in analyzing a transaction is to determine:

A) if the account balance will increase or decrease.

B) the accounts that are involved.

C) the type of accounts that are involved.

D) which accounts are to be debited and credited.

Question Type: Concept

20) The fourth step in analyzing a transaction is to determine:

A) if the account balance will increase or decrease.

B) the accounts that are involved.

C) the type of accounts that are involved.

D) which accounts are to be debited and credited.

Question Type: Concept

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21) The general ledger is arranged in the:

A) numerical order of the chart of accounts.

B) alphabetical order of the account names.

C) order with normal debit balance accounts first.

D) order with normal credit balance accounts first.

Question Type: Concept

22) The first step in recording a transaction in the general journal is to record the:

A) explanation of the entry.

B) account(s) to be credited and the amount(s).

C) date of the entry.

D) account(s) to be debited and the amount(s).

Question Type: Concept

23) The second step in recording a transaction in the general journal is to record the:

A) explanation of the entry.

B) account(s) to be credited and the amount(s).

C) date of the entry.

D) account(s) to be debited and the amount(s).

Question Type: Concept

24) The third step in recording a transaction in the general journal is to record the:

A) explanation of the entry.

B) account(s) to be credited and the amount(s).

C) date of the entry.

D) account(s) to be debited and the amount(s).

Question Type: Concept

25) The fourth step in recording a transaction in the general journal is to record the:

A) explanation of the entry.

B) account(s) to be credited and the amount(s).

C) date of the entry.

D) account(s) to be debited and the amount(s).

Question Type: Concept

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26) Once you post the transaction to the general ledger, you must go back to the general journal

and fill in:

A) the date.

B) the amount debited or credited.

C) the posting reference column with the account number of the posting.

D) the account name that was involved in the transaction.

Question Type: Concept

27) Christine invested $32,000 in her business, Cuts by Christine. The journal entry would

include a:

A) debit to Cash for $32,000 and a credit to Sales for $32,000.

B) debit to Cash for $32,000 and a credit to Common Stock for $32,000.

C) credit to Cash for $32,000 and a debit to Common Stock for $32,000.

D) debit to Cash for $32,000 and a credit to Dividends for $32,000.

Question Type: Application

28) Office equipment was purchased for $1,300 on account from Supplies–for-Less. The journal

entry would include a:

A) debit to Office Equipment and a credit to Cash.

B) credit to Cash and a debit to Office Equipment Expense.

C) debit to Office Equipment and a credit to Accounts Payable.

D) debit to Accounts Payable and a credit to Cash.

Question Type: Application

29) Salaries of $1,025 were paid in cash. The journal entry would include a:

A) debit to Salaries Expense and a credit to Cash.

B) credit to Salaries Expense and a debit to Cash.

C) debit to Accounts Payable and a credit to Cash.

D) debit to Accounts Payable and a credit to Salary Expense.

Question Type: Application