Chapter 02 – Double-Entry Accounting
Accounts Receivable
Prepaid Insurance
Unearned Revenue
Common Stock
Fees Earned
Salaries Expense
Rent Expense
Page 3 of the journal contains the following entry:
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-03 – LO: 02–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
147. The Posting Reference columns are used to trace transactions from the accounts to the journal. What will be entered
in the Posting Reference column of (1) the journal and (2) the account?
a.
(1) the amount of the debit or credit and (2) the journal page number
b.
(1) the journal page number and (2) the date of the transaction
c.
(1) the journal page number and (2) the account number
d.
(1) the account number and (2) the journal page number
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-03 – LO: 02–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
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Page 63
150. What posting references will be found in the journal entry?
a.
15, 11
b.
15, 3
c.
11, 3
d.
3, 15
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Applying
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Corning Company
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-03 – LO: 02–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
151. The chart of accounts for the Miguel Company includes the following:
Account Name
Cash
Accounts Receivable
Prepaid Insurance
Accounts Payable
Unearned Revenue
Common Stock
Dividends
Fees Earned
Salaries Expense
Rent Expense
Page 3 of the journal contains the following transaction:
Description
Post. Ref.
Debit
Credit
Cash
640
Fees Earned
640
What posting references will be found in the journal entry?
a.
41, 3
b.
3, 11
c.
11, 41
d.
11, 3
ANSWER:
c
POINTS:
1
Chapter 02 – Double-Entry Accounting
Copyright Cengage Learning. Powered by Cognero.
Page 66
d.
only that the debit dollar amounts equal the credit dollar amounts
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
156. That the total dollar amount of the debits equals the total dollar amount of the credits in the ledger accounts can be
verified through a(n):
a.
chart of accounts
b.
trial balance
c.
income statement
d.
balance sheet
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
157. Randomly listed below are the steps for preparing a trial balance:
(1)
Verify that the total of the Debit column equals the total of the Credit column.
(2)
List the accounts from the ledger and enter their debit or credit balance in the Debit or
Credit column of the trial balance.
(3)
List the name of the company, the title of the trial balance, and the date the trial balance
is prepared.
(4)
Total the Debit and Credit columns of the trial balance.
What is the proper order of these steps?
a.
(3), (2), (4), (1)
b.
(2), (3), (4), (1)
c.
(3), (2), (1), (4)
Chapter 02 – Double-Entry Accounting
Copyright Cengage Learning. Powered by Cognero.
Page 67
d.
(4), (3), (2), (1)
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.02 – GAAP
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
158. A trial balance is prepared to
a.
prove that there were no errors made in recording transactions into the journal
b.
prove that no errors were made in posting to the ledger
c.
prove that each account balance is correct
d.
discover errors that affect the equality of debits and credits
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
159. The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances.
Accounts Payable
$1,500
Fees Earned
$3,600
Accounts Receivable
1,800
Insurance Expense
1,300
Prepaid Insurance
2,000
Land
3,000
Cash
3,200
Wages Expense
1,400
Dividends
1,200
Common Stock
8,800
Prepare a trial balance. The total of the debits is
a.
$13,900
b.
$11,200
c.
$12,700
d.
$9,700
Chapter 02 – Double-Entry Accounting
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Page 68
ANSWER:
a
RATIONALE:
Monroe Entertainment Co.
Trial Balance
Debit Balances
Credit
Balances
Accounts Payable
$1,500
Accounts Receivable
$ 1,800
Prepaid Insurance
2,000
Cash
3,200
Dividends
1,200
Fees Earned
3,600
Insurance Expense
1,300
Land
3,000
Wages Expense
1,400
Common Stock
8,800
$13,900
$13,900
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Applying
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
160. Of the following, which is an internal report that will determine if the total of the debit balances equal the total of the
credit balances in the ledger?
a.
chart of accounts
b.
income statement
c.
trial balance
d.
horizontal analysis
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.02 – GAAP
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
Chapter 02 – Double-Entry Accounting
Copyright Cengage Learning. Powered by Cognero.
Page 70
b.
twice the amount of the transposition
c.
one-half the amount of the transposition
d.
divisible by 9
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.02 – GAAP
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
164. Which of the following errors could cause the trial balance totals to be unequal?
a.
posting the debit portion of a journal entry incorrectly when the credit portion of the entry is correctly posted
b.
failure to record a transaction or to post a transaction
c.
recording the same transaction more than once
d.
recording the same erroneous amount for both the debit and the credit parts of a transaction
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
165. The trial balance is out of balance and the accountant suspects that a transposition or slide error has occurred. What
will the accountant do to confirm this suspicion?
a.
Determine the amount of the error and look for that amount on the trial balance.
b.
Determine the amount of the error and divide by two, then look for that amount on the trial balance.
c.
Determine the amount of the error and refer to the journal entries for that amount.
d.
Determine the amount of the error and divide by nine. If the result is evenly divided, then this type of error is
likely.
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging