2.4-2 A trial balance is an optional financial statement that reports the financial position of the company as of a
given day in time.
2.4-3 A chart of accounts is organized in the alphabetical order of the accounting equation—with assets first,
followed by expenses, liabilities, owners’ equity, and revenues—because using numbers can be very
complicated.
2.4-4 When the trial balance is out of balance due to a transposition error, the difference between total debits
and total credits will be evenly divisible by 2.
2.4-5 When the trial balance is out of balance due to a slide-type error, the difference between total debits and
total credits will be evenly divisible by 9.
2.4-6
When the trial balance is out of balance due to an incorrect posting of a debit as a credit, the difference is
evenly divisibly by 2.
2.4-7 If the payment of a utilities bill is not posted, assets will be overstated.
2.4-8 The normal balance for any account is always the side of the account (debit or credit) where the largest
amount is found.
2.4-9 The T-account is a tool for visualizing business transactions and usually can be easily prepared.
2.4-10 The trial balance is used to determine whether:
A) total assets equal total liabilities.
B) total debits equal total credits.
C) total revenues plus gains equal total expenses plus losses.
D) total increases in accounts equal total decreases in accounts
2.4-11 If the debit amount of an entry to record the purchase of supplies on account was not posted:
A) assets would be understated.
B) assets would be overstated.
C) liabilities would be understated.
D) liabilities would be overstated.
2.4-12 If a posting error has occurred when recording a transaction by posting a debit as a credit, then the out-of-
balance amount will be evenly divisible by:
A) 11.
B) 9.
C) 2.
D) 5.
2.4-13 A trial balance showed total debits of $360,000 and total credits of $36,000. This discrepancy is most
likely due to which type of error?
A) Slide
B) Transposition
C) Mislabeling
D) Failure to post a transaction
2.4-14 A trial balance showed total debits of $540,000 and total credits of $450,000. This discrepancy is most
likely due to which type of error?
A) Slide
B) Transposition
C) Mislabeling
D) Failure to post a transaction
2.4-15 If the credit amount of an entry to record the payment of salaries was not posted:
A) assets would be overstated and owners’ equity would be overstated.
B) liabilities would be understated and owners’ equity would be overstated.
C) expenses would be understated and owners’ equity would be understated.
D) there would be no effect on shareholders’ equity.
2.4-16 If the total debits and the total credits of a trial balance are not equal, the error could be due to:
A) recording the same transaction twice.
B) recording both the debit and credit of the journal entry for the same incorrect amount.
C) an error in determining an account balance.
D) forgetting to record a transaction.
2.4-17 Which of the following statements regarding a trial balance is TRUE?
A) A trial balance may be taken at any time during the accounting period.
B) A trial balance is a list of all accounts with their balances.
C) A trial balance shows that total debits equals total credits.
D) All of the above are true.
2.4-18 A trial balance has which of the following features?
A) Totals for balance sheet accounts only
B) Totals for income statement accounts only
C) Totals for all accounts listed in the ledger
D) Both A and B are correct
2.4-19 A trial balance is:
A) prepared before the posting process is completed.
B) a list of all accounts with their balances.
C) a list of balance sheet accounts with their balances.
D) a list of income statement accounts with their balances.
2.4-20 Which statement about a trial balance is NOT true?
A) The trial balance can be prepared at any time, but is generally prepared at the end of the accounting
period.
B) The trial balance is a list of all accounts with their balances.
C) The trial balance lists the income statement accounts and their balances first and then the balance
sheet accounts and their balances.
D) The trial balance lists asset accounts and their balances first, then liability accounts and their balances,
and then shareholders’ equity accounts and their balances.
2.4-21 A trial balance has total debits of $720,000 and total credits of $850,000, with a debit balance of $65,000
for notes payable. This situation indicates:
A) a slide.
B) an incorrect posting.
C) a transposition.
D) that none of the above are correct.
2.4-22 The normal balance of Accounts Receivable is a __________because it is a(n) _________ account.
A) credit, liability
B) debit, asset
C) credit, shareholders’ equity
D) debit, expense
2.4-23 The normal balance of the Supplies account is a __________ because it is a(n) __________ account.
A) credit, liability
B) debit, shareholders’ equity
C) credit, expense
D) debit, asset
2.4-24 The normal balance of the Accounts Payable account is a __________ because it is a(n) __________
account.
A) credit, liability
B) debit, shareholders’ equity
C) credit, expense
D) debit, asset
2.4-25 The normal balance of the Share Capital account is a __________ because it increases __________.
A) debit, assets
B) debit, expenses
C) debit, shareholders’ equity
D) credit, shareholders’ equity
2.4-26 ABC Company had a beginning cash balance of $10,000, received cash of $8,000 and ended the month
with a cash balance of $6,000. Cash payments for the month
A) were $6,000.
B) were $24,000.
C) were $12,000.
D) cannot be determined from the information given.
2.4-27 ABC Company had a beginning Accounts Receivable balance of $10,000, and had $12,000 of sales on
account for the month. The ending Accounts Receivable balance was $14,000. Collections on Accounts
Receivable for the month:
A) were $12,000.
B) were $36,000.
C) were $8,000.
D) can’t be determined from the information given.
2.4-28 The accounts receivable account for James Rivers Inc. had a beginning balance of $6,000. During the
month, the company received payments of $8,000 and additional accounts of $11,000. The ending
balance in accounts receivable is _____ and is a ______.
A) $9,000, credit
B) $9,000, debit
C) $3,000, debit
D) $3,000, credit
2.4-29 A chart of accounts is:
A) prepared as the first step in analyzing transactions.
B) a source document.
C) a list of all of the accounts of the organization.
D) a list of all of the accounts of the organization and their related account numbers.
2.4-30 When using a four-column ledger account format, the pair of columns on the far right is used to show the:
A) names of the accounts being debited and credited.
B) transaction dates and journal reference.
C) account balance.
D) debit and credit amounts posted from journal entries.
2.4-31 Joe Donaldson deposited $80,000 in a bank account, purchased a company for $60,000 cash (Building
$40,000 and Inventory $20,000), performed services for clients for $10,000 cash, purchased supplies for
$5,000 cash, and paid utilities of $2,000 cash. What is the amount of credits in the trial balance for the
month?
A) $78,000
B) $88,000
C) $80,000
D) $90,000
2.5-1 Businesspeople must often make decisions without the benefit of a complete accounting system:
2.5-2 To see how transactions affect a business, managers can go directly to T- accounts.
2.5-3 Managers who need information quickly can analyze the transaction by using T-accounts.
