61
162) A debit in a journal entry is always posted to the general ledger as a(n):
A) Increase.
B) Credit.
C) Decrease.
D) Debit.
163) Posting transactions to T-accounts involves:
A) Analyzing source documents to determine the effects of transactions on the company’s
accounts.
B) Listing all accounts and their balances at a particular date to ensure that debits equal credits.
C) Preparing a chronological record of all transactions affecting the company.
D) Transferring debit and credit information from the journal to the accounts in the general
ledger.
164) Below is the company’s Cash T-account.
Cash
Beg.
1,200
5,200
3,100
End.
3,300
The $3,100 amount could represent which of the following?
A) Purchase of supplies on account.
B) Ending balance of cash.
C) Payment for salaries.
D) Collection from customers.
165) Below is the company’s Cash T-account.
Cash
Beg.
1,200
5,200
3,100
End.
3,300
The $5,200 amount could represent which of the following?
A) Purchase of supplies on account.
B) Ending balance of cash.
C) Payment for salaries.
D) Collection from customers.
166) The figure below is a depiction of a T-account.
Account
1,700
Beg.
1,200
800
3,300
End.
Which of the following statements is correct?
A) The account could be a liability account.
B) During the period, a journal entry was recorded that included a credit to the account for $800.
C) The amount reported to stockholders at the end of the period for this account is $3,300.
D) All of the other answers provide a correct statement.
167) Following are transactions of Gotebo Tanners, Inc., a new company, during the month of
January:
Issued 10,000 shares of common stock for $15,000 cash.
Purchased land for $12,000, signing a note payable for the full amount.
Purchased office equipment for $1,200 cash.
Received cash of $14,000 for services provided to customers during the month.
Purchased $300 of office supplies on account.
Paid employees $10,000 for their first month’s salaries.
What was the balance of Gotebo’s Cash account following these six transactions?
A) $29,800.
B) $19,300.
C) $17,800.
D) $22,400.
168) The Accounts Payable account has a beginning balance of $12,000 and the company
purchased $50,000 of supplies on account during the month. The ending balance was $10,000.
How much did the company pay to creditors during the month?
A) $50,000.
B) $52,000.
C) $60,000.
D) $62,000.
169) On March 3, Cobra Inc. purchased a desk for $450 on account. On March 22, Cobra
purchased another desk for $500 also on account, and then on March 24, Cobra paid $400 on
account. At the end of March, what amount should Cobra report for desks (assuming these two
desks were the only desks they had)?
A) $50.
B) $450.
C) $500.
D) $950.
170) The Accounts Receivable account has a beginning balance of $10,000 and the company
provides services of $50,000 on account during the month. The ending balance was $12,000.
How much did the company receive from customers during the month?
A) $50,000.
B) $52,000.
C) $48,000.
D) $62,000.
171) A trial balance can best be explained as a list of:
A) The income statement accounts used to calculate net income.
B) Revenue, expense, and dividend accounts used to show the balances of the components of
retained earnings.
C) The balance sheet accounts used to show the equality of the accounting equation.
D) All accounts and their balances at a particular date.
172) A trial balance represents the:
A) Source documents used to determine the effects of transactions on the company’s accounts.
B) List of all accounts and their balances at a particular date to ensure that debits equal credits.
C) Chronological record of all transactions affecting the company.
D) Process of transferring debit and credit information from the journal to the accounts in the
general ledger.
173) Lithuanian Motors has the following balance sheet accounts:
Land
$
170,000
Equipment
66,000
Salaries Payable
?
Notes Payable
88,000
Supplies
14,000
Cash
26,000
Common Stock
100,000
Retained Earnings
40,000
Accounts Payable
?
Prepaid Rent
12,000
If the company has total assets of $288,000, what is the balance of the company’s Salaries
Payable account?
A) $15,000.
B) $25,000.
C) $12,000.
D) Cannot be determined given the information provided.
174) Finnish Motors has the following balance sheet accounts:
Land
$
150,000
Equipment
90,000
Salaries Payable
12,000
Notes Payable
99,000
Supplies
10,000
Cash
25,000
Common Stock
40,000
Retained Earnings
100,000
Accounts Payable
?
Prepaid Rent
?
If the company has total liabilities and stockholders’ equity of $290,000, what is the balance of
the company’s Prepaid Rent account?
A) $15,000.
B) $25,000.
C) $12,000.
D) $39,000.
68
175) Finnish Motors has the following balance sheet accounts:
Land
$
150,000
Equipment
90,000
Salaries Payable
12,000
Notes Payable
99,000
Supplies
10,000
Cash
25,000
Common Stock
40,000
Retained Earnings
100,000
Accounts Payable
?
Prepaid Rent
?
If the company has total assets of $290,000, what is the balance of the company’s Accounts
Payable account?
A) $15,000.
B) $25,000.
C) $12,000.
D) $39,000.
69
Match each step of the measurement process with its description.
A) Assess whether the transaction results in a debit or credit to the account balance.
B) Post transactions to the general ledger.
C) Analyze the impact of the transaction on the accounting equation.
D) Use source documents to identify accounts affected by an external transaction.
E) Prepare a trial balance.
F) Record transactions in a journal using debits and credits.
176) Step 6
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
177) Step 3
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
178) Step 5
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
179) Step 2
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
70
180) Step 4
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
181) Step 1
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
71
Match each term with its definition.
A) Activities of the company conducted with separate economic entities.
B) Events that affect the financial position of the company but do not include an exchange with a
separate economic entity.
C) A summary of the effects of all transactions related to a particular item over a period of time.
D) Full set of procedures used to accomplish the measurement/communication process of
financial accounting.
E) A list of all account names used to record transactions of a company.
182) Chart of accounts
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
183) Internal transactions
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
184) Accounting cycle
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
185) External transactions
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
72
186) Accounts
Difficulty: 2 Medium
Topic: External Transactions
Learning Objective: 02-01 Identify the basic steps in measuring external transactions.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
73
Match each term with how related transactions affect the accounting equation.
A) Transactions that increase stockholders’ equity.
B) Transactions that decrease stockholders’ equity related to distributions to stockholders.
C) Transactions that affect the right side of the accounting equation not related to stockholders’
equity.
D) Transactions that affect the left side of the accounting equation.
E) Transactions that decrease stockholders’ equity related to cost of generating revenues.
187) Assets
Difficulty: 2 Medium
Topic: Effects of Transactions on the Accounting Equation
Learning Objective: 02-02 Analyze the impact of external transactions on the accounting
equation.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
188) Revenues
Difficulty: 2 Medium
Topic: Effects of Transactions on the Accounting Equation
Learning Objective: 02-02 Analyze the impact of external transactions on the accounting
equation.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
189) Liabilities
Difficulty: 2 Medium
Topic: Effects of Transactions on the Accounting Equation
Learning Objective: 02-02 Analyze the impact of external transactions on the accounting
equation.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
190) Dividends
Difficulty: 2 Medium
Topic: Effects of Transactions on the Accounting Equation
Learning Objective: 02-02 Analyze the impact of external transactions on the accounting
equation.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
74
191) Expenses
Difficulty: 2 Medium
Topic: Effects of Transactions on the Accounting Equation
Learning Objective: 02-02 Analyze the impact of external transactions on the accounting
equation.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
75
Match each term with its description.
A) Simplified form of a general ledger account.
B) List of all accounts and their balances showing that debits equal credits.
C) Right side of an account.
D) Left side of an account.
E) Format used to record transactions of a company.
F) Chronological record of all transactions.
192) Debit
Difficulty: 2 Medium
Topic: Recording Transactions in a Journal; Posting to the General Ledger; Trial Balance
Learning Objective: 02-04 Record transactions in a journal using debits and credits.; 02-05 Post
transactions to the general ledger.; 02-06 Prepare a trial balance.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
193) Journal entry
Difficulty: 2 Medium
Topic: Recording Transactions in a Journal; Posting to the General Ledger; Trial Balance
Learning Objective: 02-04 Record transactions in a journal using debits and credits.; 02-05 Post
transactions to the general ledger.; 02-06 Prepare a trial balance.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
194) Journal
Difficulty: 2 Medium
Topic: Recording Transactions in a Journal; Posting to the General Ledger; Trial Balance
Learning Objective: 02-04 Record transactions in a journal using debits and credits.; 02-05 Post
transactions to the general ledger.; 02-06 Prepare a trial balance.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
195) Credit
Difficulty: 2 Medium
Topic: Recording Transactions in a Journal; Posting to the General Ledger; Trial Balance
Learning Objective: 02-04 Record transactions in a journal using debits and credits.; 02-05 Post
transactions to the general ledger.; 02-06 Prepare a trial balance.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
196) Trial balance
Difficulty: 2 Medium
Topic: Recording Transactions in a Journal; Posting to the General Ledger; Trial Balance
Learning Objective: 02-04 Record transactions in a journal using debits and credits.; 02-05 Post
transactions to the general ledger.; 02-06 Prepare a trial balance.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
197) T-account
Difficulty: 2 Medium
Topic: Recording Transactions in a Journal; Posting to the General Ledger; Trial Balance
Learning Objective: 02-04 Record transactions in a journal using debits and credits.; 02-05 Post
transactions to the general ledger.; 02-06 Prepare a trial balance.
Bloom’s: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
198) Below are the steps in the measurement process of external transactions. Arrange them
from first (1) to last (6).
(a) Post the transaction to the T-accounts in the general ledger.
(b) Assess whether the impact of the transaction results in a debit or credit to the account
balance.
(c) Use source documents to identify accounts affected by external transactions.
(d) Analyze the impact of the transaction on the accounting equation.
(e) Prepare a trial balance.
(f) Record transactions using debits and credits.
199) A company received a utility bill of $600 but did not pay it. Indicate the amount of
increases and decreases in the accounting equation.
200) A company purchases supplies on account for $1,700. Indicate the amount of increases and
decreases in the accounting equation.
201) A company provides services to customers on account for $2,400. Indicate the amount of
increases and decreases in the accounting equation.
202) A company pays $800 dividends to stockholders. Indicate the amount of increases and
decreases in the accounting equation.
203) A company pays $1,300 for supplies previously purchased on account. Indicate the amount
of increases and decreases in the accounting equation.
204) The following transactions occur for the Hamilton Manufacturers.
(a) Provide services to customers on account for $4,500.
(b) Purchase equipment by signing a note with the bank for $10,000.
(c) Pay advertising of $1,500 for the current month.
Analyze each transaction and indicate the amount of increases and decreases in the accounting
equation.
80
206) Suppose a company has the following balance sheet accounts:
Accounts
Balances
Land
$9,000
Building
?
Salaries payable
3,700
Common stock
?
Accounts payable
2,600
Cash
5,300
Retained earnings
11,600
Supplies
3,200
Equipment
4,500
Calculate the missing amounts assuming the company has total assets of $40,000.