Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
111) Liabilities normally carry a ________ balance and are shown in the ________.
A) Debit; Statement of stockholders' equity
B) Debit; Income statement
C) Credit; Balance sheet
D) Debit; Balance sheet
112) Which of the following accounts has a debit balance?
A) Accounts Payable.
B) Deferred Revenue.
C) Service Revenue.
D) Salaries Expense.
113) Which of the following accounts would normally have a credit balance?
A) Accounts Payable, Service Revenue, Common Stock.
B) Salaries Payable, Deferred Revenue, Delivery Expense.
C) Income Tax Payable, Service Revenue, Dividends.
D) Cash, Repairs and Maintenance Expense, Dividends.
114) Which of the following accounts would normally have a debit balance?
A) Accounts Payable, Service Revenue, Common Stock.
B) Salaries Payable, Deferred Revenue, Utilities Expense.
C) Income Tax Payable, Service Revenue, Dividends.
D) Cash, Delivery Expense, Dividends.
115) Which of the following accounts would normally have a debit balance and appear in the
balance sheet?
A) Accounts Receivable.
B) Deferred Revenue.
C) Salaries Expense.
D) Dividends.
116) Which of the following accounts has a credit balance?
A) Salaries Expense.
B) Accounts Payable.
C) Land.
D) Prepaid Rent.
117) An increase to an asset account is shown with a ________. An increase to a liability
account is shown with a ________.
A) Debit; Debit
B) Credit; Debit
C) Debit; Credit
D) Credit; Credit
118) An increase to an expense account is shown with a ________. An increase to a revenue
account is shown with a ________.
A) Debit; Debit
B) Debit; Credit
C) Credit; Debit
D) Credit; Credit
119) An increase to an asset account is shown with a ________. A decrease to an asset account is
shown with a ________.
A) Debit; Debit
B) Credit; Debit
C) Debit; Credit
D) Credit; Credit
120) Which of the accounts are increased with a debit and decreased with a credit?
A) Liabilities, stockholders' equity, and revenues.
B) Dividends, liabilities, and assets.
C) Expenses, dividends, and stockholders' equity.
D) Assets, dividends, and expenses.
121) Consider the following list of accounts:
Cash
Service Revenue
Salaries Expense
Accounts Payable
Equipment
Retained Earnings
Utilities Expense
Accounts Receivable
Common Stock
Dividends
How many of these accounts have a normal debit balance?
A) Four.
B) Five.
C) Six.
D) Seven.
122) Consider the following list of accounts:
Accounts Payable
Cash
Prepaid Rent
Common Stock
Salaries Payable
Equipment
Supplies
Rent Expense
How many of these accounts have a normal credit balance?
A) Two.
B) Three.
C) Four.
D) Five.
123) Consider the following accounts:
Utilities Expense
Accounts Payable
Service Revenue
Common Stock
How many of these accounts are increased with debits?
A) One.
B) Two.
C) Three.
D) Four.
124) Which one of the following accounts will have a normal credit balance?
A) Dividends.
B) Salary Expense.
C) Supplies.
D) Common Stock.
125) Consider the following accounts:
Dividends
Insurance Expense
Cash
Service Revenue
How many of these accounts are increased with credits?
A) One.
B) Two.
C) Three.
D) Four.
126) When viewing a company's accounting records, the terms "debit" and "credit" would
typically be seen in which location?
A) Financial statements
B) Source documents
C) Chart of accounts
D) Journal
127) Cooper Law Offices has the following source document from one of its suppliers:
Allen Office Supplies
Description
Quantity
Price per
unit
Total
Legal paper
100
$
15
$
1,500
Ink cartridge
40
$
30
$
1,200
$
2,700
Invoice Number:
#127874
Date of purchase:
January 17, 2021
Payment due:
30 days from date of purchase
What should Cooper record on the date of the purchase?
A) Debit Cash; Credit Accounts Receivable for $2,700.
B) Debit Supplies; Credit Accounts Payable for $2,700.
C) Debit Accounts Payable; Credit Cash for $2,700.
D) Debit Accounts Receivable; Credit Sales Revenue for $2,700.
128) The term commonly used in accounting to describe the format for recording a transaction
is:
A) Chart of accounts.
B) Trial balance.
C) General ledger.
D) Journal entry.
129) Which of the following is the appropriate debit/credit format for recording a business
transaction?
A.
Credit Name
Credit Amount
Debit Name
Debit Amount
B.
Debit Amount
Debit Name
Credit Amount
Credit Name
C.
Debit Name
Debit Amount
Credit Name
Credit Amount
D.
Credit Name
Debit Amount
Debit Name
Credit Amount
A) Option A
B) Option B
C) Option C
D) Option D
130) The following statements pertain to recording transactions. Which of them are true?
I. Total debits should equal total credits.
II. It is possible to have multiple debits or credits in one journal entry.
III. Assets are always listed first in journal entries.
IV. Some journal entries will have debits only.
A) I only.
B) I and II.
C) I, II, and IV.
D) II, III, and IV.
131) Which of the following is not a possible journal entry?
A) Credit assets; Debit expenses.
B) Debit assets; Debit stockholders' equity.
C) Credit revenues; Debit assets.
D) Debit expenses; Credit liabilities.
132) Providing services on account would be recorded with a:
A) Debit to Service Revenue.
B) Credit to Accounts Receivable.
C) Credit to Accounts Payable.
D) Debit to Accounts Receivable.
133) Xenon Corporation borrows $75,000 from First Bank. Xenon Corporation records this
transaction with a:
A) Debit to Investments.
B) Credit to Retained Earnings.
C) Credit to Notes Payable.
D) Credit to Interest Expense.
134) Childers Service Company provides services to customers totaling $3,000, for which it
billed the customers. How would the transaction be recorded?
A) Debit Cash $3,000, credit Service Revenue $3,000.
B) Debit Accounts Receivable $3,000, credit Service Revenue $3,000.
C) Debit Accounts Receivable $3,000, credit Cash $3,000.
D) Debit Service Revenue $3,000, credit Accounts Receivable $3,000.
135) A company received a bill for newspaper advertising services, $400. The bill will be paid in
10 days. How would the transaction be recorded today?
A) Debit Advertising Expense $400, credit Accounts Payable $400.
B) Debit Accounts Payable $400, credit Advertising Expense $400.
C) Debit Accounts Payable $400, credit Cash $400.
D) Debit Advertising Expense $400, credit Cash $400.
136) When a company pays utilities of $1,800 in cash, the transaction is recorded as:
A) Debit Utilities Expense $1,800, credit Utilities Payable $1,800.
B) Debit Utilities Payable $1,800, credit Cash $1,800.
C) Debit Cash $1,800, credit Utilities Expense $1,800.
D) Debit Utilities Expense $1,800, credit Cash $1,800.
137) Assume that cash is paid for rent to cover the next year. The appropriate debit and credit
would be:
A) Debit Rent Expense, credit Cash.
B) Debit Prepaid Rent, credit Rent Expense.
C) Debit Prepaid Rent, credit Cash.
D) Debit Cash, credit Prepaid Rent.
138) Summer Leasing received $12,000 from a customer to cover 24 months of rent in advance.
How should Summer record this transaction?
A) Debit Prepaid Rent; credit Rent Expense.
B) Debit Cash; credit Deferred Revenue.
C) Debit Cash; credit Service Revenue.
D) Debit Rent Expense; credit Cash.
139) Styleson Inc. performed cleaning services for its customers for cash. These transactions
would be recorded as:
A) Debit Service Revenue, credit Cash.
B) Debit Cash, credit Service Revenue.
C) Debit Cash, credit Accounts Receivable.
D) Debit Accounts Receivable, credit Service Revenue.
140) Assume that $18,000 cash is paid for insurance to cover the next year. The appropriate debit
and credit would be:
A) Debit Insurance Expense $18,000, credit Prepaid Insurance $18,000.
B) Debit Prepaid Insurance $18,000, credit Insurance Expense $18,000.
C) Debit Prepaid Insurance $18,000, credit Cash $18,000.
D) Debit Cash $18,000, credit Prepaid Insurance $18,000.
141) Providing services to customers for $1,000 on account is recorded as:
A) Debit Accounts Receivable $1,000, credit Service Revenue $1,000.
B) Debit Service Revenue $1,000, credit Cash $1,000.
C) Debit Cash $1,000, credit Accounts Receivable $1,000.
D) Debit Service Revenue $1,000, credit Accounts Receivable $1,000.
142) Issuing common stock for $5,000 cash is recorded as:
A) Debit Cash $5,000, credit Service Revenue $5,000.
B) Debit Cash $5,000, credit Common Stock $5,000.
C) Debit Cash $5,000, credit Dividends $5,000.
D) Debit Common Stock $5,000, credit Cash $5,000.
143) Purchasing equipment for $10,000 cash is recorded as:
A) Debit Cash $10,000, credit Equipment $10,000.
B) Debit Equipment $10,000, credit Notes Payable $10,000.
C) Debit Equipment $10,000, credit Cash $10,000.
D) Debit Notes Payable $10,000, credit Equipment $10,000.
144) Schooner Inc. purchased equipment by signing a note payable. This transaction would be
recorded as:
A) Debit Equipment, credit Cash.
B) Debit Cash, credit Notes Payable.
C) Debit Notes Payable, credit Equipment.
D) Debit Equipment, credit Notes Payable.
145) When a company pays $2,500 dividends to its stockholders, the transaction should be
recorded as:
A) Debit Cash; credit Dividends.
B) Debit Retained Earnings; credit Dividends.
C) Debit Dividends; credit Cash.
D) Debit Dividends; credit Accounts Payable.
146) Daniel Dino Restaurant owes employees' salaries of $15,000. This would be recorded as:
A) Debit Salaries Expense, credit Cash.
B) Debit Salaries Payable, credit Cash.
C) Debit Salaries Expense, credit Salaries Payable.
D) Debit Salaries Payable, credit Salaries Expense.
147) 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?
A) Debit assets, credit liabilities.
B) Debit assets, credit stockholders' equity.
C) Debit liabilities, credit assets.
D) Debit expenses, credit liabilities.
148) Incurring an expense for advertising on account would be recorded by:
A) Debiting a liability account.
B) Crediting an asset account.
C) Debiting an expense account.
D) Debiting an asset account.
149) Tyler Incorporated receives $150,000 from investors in exchange for shares of its common
stock. Tyler Incorporated records this transaction with a:
A) Debit to Investments.
B) Credit to Retained Earnings.
C) Credit to Common Stock.
D) Credit to Service Revenue.
150) The owner of an office building should report rent collected in advance as a debit to Cash
and a credit to:
A) A liability.
B) An asset other than Cash.
C) Revenue.
D) Stockholders' equity.
151) 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:
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.
152) On July 7, Saints Incorporated received $10,000 in cash from a customer for services to be
provided on October 10. Which of the following describes how the transaction should be
recorded on July 7?
A) Debit Cash $10,000, credit Service Revenue $10,000.
B) Debit Accounts Receivable $10,000, credit Service Revenue $10,000.
C) Debit Cash $10,000, credit Deferred Revenue $10,000.
D) Debit Deferred Revenue $10,000, credit Cash $10,000.
153) On December 1, Bears Lawn Maintenance, Inc. signed a contract with a retailer to supply
maintenance for the next calendar year. How should this transaction be recorded on December 1?
A) Debit Cash, credit Service Revenue.
B) Debit Cash, credit Accounts Receivable.
C) Debit Accounts Receivable, credit Service Revenue.
D) No transaction should be recorded on December 1.
154) Sooner purchased office supplies on account. The transaction would be recorded as:
A) Debit Supplies, Credit Cash
B) Debit Cash, Credit Accounts Payable
C) Debit Accounts Payable, Credit Supplies
D) Debit Supplies, Credit Accounts Payable
155) Tomlin & Company provides music for special occasions. On January 14, the Smith family
hired Tomlin for an upcoming family wedding for an agreed-upon fee of $10,000. The wedding
was scheduled for May 23. As part of the agreement, the Smiths paid Tomlin half of the fee at
the end of April with the remaining amount due by the end of June. How would Tomlin record
the receipt of the final payment in June?
A) Credit to Accounts Receivable.
B) Credit to Service Revenue.
C) Credit to Cash.
D) Debit to Deferred Revenue.
156) Bostel wanted to expand the size of its warehouse in order to generate more profits. The
company decided to purchase the building adjacent to its existing warehouse. The company pays
for the building by borrowing from the bank. The purchase would be recorded as:
A) Debit Cash; credit Notes Payable.
B) Debit Buildings; credit Cash.
C) Debit Buildings; credit Notes Payable.
D) Debit Cash and Buildings; credit Notes Payable.
157) On July 5, Harris Company purchased supplies from the hardware store for $600 on
account. On July 10, Harris receives a bill from the hardware store as a reminder about the
account balance. On July 17, Harris pays the account in full. How does Harris record the
transaction on July 17?
A.
Supplies
600
Accounts Payable
600
B.
Accounts Payable
600
Supplies
600
C.
Cash
600
Accounts Payable
600
D.
Accounts Payable
600
Cash
600
A) Option A
B) Option B
C) Option C
D) Option D
158) On July 31, ALOE Inc. received $5,000 cash from a customer who previously purchased
ALOE's products on account. What entry should ALOE Inc. record at the time it receives cash?
A) Debit Accounts Receivable, $5,000; credit Cash, $5,000.
B) Debit Cash, $5,000; credit Accounts Receivable, $5,000.
C) Debit Cash, $5,000; credit Accounts Payable, $5,000.
D) Debit Cash, $5,000; credit Service Revenue, $5,000.
159) A transaction is initially recorded in the ________, and then subsequently posted to the
general ________.
A) Debit; Credit
B) Statement; Account
C) Journal; Ledger
D) Chart; Statement
160) An account balance represents:
A) A chart showing the list of all accounts used to record transactions.
B) The net amount of all debits and credits posted to an account over a period of time.
C) All transactions that affect net income for the period.
D) The equality of debits and credits in the accounting records.
161) Posting is the process of:
A) Analyzing the impact of the transaction on the accounting equation.
B) Obtaining information about external transactions from source documents.
C) Transferring the debit and credit information from the journal to individual accounts in the
general ledger.
D) Listing all accounts and their balances at a particular date.
