150)
At the beginning of the current year, Trenton Company’s total assets were $248,000 and its total
liabilities were $175,000. During the year, the company reported total revenues of $93,000, total
expenses of $76,000 and owner withdrawals of $5,000. There were no other changes in owner’s
capital during the year and total assets at the end of the year were $260,000. Trenton Company’s
debt ratio at the end of the current year is:
A) 1.42%. B) 70.6%. C) 48.6%. D) 67.3%. E) 32.7%.
151)
The process of transferring general journal entry information to the ledger is called:
A)
Journalizing.
B)
Double-entry accounting.
C)
Balancing.
D)
Posting.
E)
Balancing an account.
152)
A column in journals and ledger accounts that is used to cross reference journal and ledger entries
is the:
A)
Debit column.
B)
Credit column.
C)
Account balance column.
D)
Description column.
E)
Posting reference column.
153)
The chronological record of each complete transaction that has occurred is called the:
A)
Journal.
B)
Trial balance.
C)
Ledger.
D)
Account balance.
E)
Cash account.
154)
A business’s general journal provides a place for recording all of the following except:
A)
The names of the accounts involved.
B)
An explanation of the transaction.
C)
The amount of each debit and credit.
D)
The balance in each account.
E)
The transaction date.
155)
The balance column in a ledger account is:
A)
A simple form of account that is widely used in accounting to illustrate the debits and credits
required in recording a transaction.
B)
Another name for the withdrawals account.
C)
An account entered on the balance sheet.
D)
An account used to record the transfers of assets from a business to its owner.
E)
A column for showing the balance of the account after each entry is posted.
156)
A general journal is:
A)
A ledger in which amounts are posted from a balance column account.
B)
A complete record of all transactions in chronological order from which transaction amounts
are posted to the ledger accounts.
C)
Not required if T-accounts are used.
D)
A book of final entry because financial statements are prepared from it.
E)
Not necessary in electronic accounting systems.
157)
A record in which the effects of transactions are first recorded and from which transaction amounts
are posted to the ledger is a(n):
A)
Trial balance.
B)
Balance column account.
C)
Journal.
D)
T-account.
E)
Account.
158)
Smiles Entertainment had the following accounts and balances at December 31:
Account
Debit
Credit
Cash
$10,000
Accounts Receivable
2,000
Prepaid Insurance
2,400
Supplies
1,000
Accounts Payable
$5,000
T. Happy, Capital
4,900
Service Revenue
7,000
Salaries Expense
500
Utilities Expense
1,000
Totals
$16,900
$16,900
Using the information in the table, calculate the company’s reported net income for the period.
A) $8,500 B) $4,000. C) $1,100. D) $5,500. E) $10,400.
159)
Jackson Consulting had the following accounts and balances at December 31:
Account
Debit
Cash
$20,000
Accounts Receivable
6,000
Prepaid Insurance
1,500
Supplies
5,000
Accounts Payable
R. Jackson, Capital
R. Jackson, Withdrawals
1,000
Service Revenue
Utilities Expense
2,000
Salaries Expense
1,200
Totals
$36,700
Using the information in the table, calculate Jackson Consulting’s reported net income for the period.
A) $16,800 B) $15,800. C) $23,200 D) $10,300. E) $15,300
160)
Bologna Lodging had the following accounts and balances as of December 31:
Account
Debit
Cash
$20,000
Accounts Receivable
2,000
Salaries Expense
500
Accounts Payable
Lodging Revenue
Utilities Expense
500
Prepaid Insurance
1,400
Supplies
1,500
B. Oscar, Capital
Totals
$25,900
Using the information in the table, calculate the total assets reported on Bologna’s balance sheet
for the period.
A) $25,400. B) $24,900. C) $23,400. D) $22,500. E) $25,900.
161)
At the end of its first month of operations, Michael’s Consulting Services reported net income of
$25,000. They also had account balances of: Cash, $18,000; Office Supplies, $2,000 and Accounts
Receivable $10,000. The owner’s total investment for this first month was $5,000. There were no
owner withdrawals in the first month.
Calculate the ending balance in the Owner’s Capital account to be reported on the Statement of
Owner’s Equity.
A) $20,000 B) $7,000 C) $30,000 D) $5,000 E) $25,000
162)
Identify the accounts that would normally have balances in the debit column of a business’s trial
balance.
A)
Assets and revenues.
B)
Revenues and expenses.
C)
Liabilities and expenses.
D)
Assets and expenses.
E)
Liabilities and withdrawals.
163)
Identify the accounts that would normally have balances in the credit column of a business’s trial
balance
A)
Revenues and liabilities.
B)
Liabilities and expenses.
C)
Revenues and expenses.
D)
Assets and revenues.
E)
Withdrawals and liabilities.
164)
Which of the following is not a step in the accounting process?
A)
Verify that revenues and expenses are equal
B)
Analyzing each transaction
C)
Record relevant transactions and events in a journal
D)
Post journal information to the ledger accounts
E)
Prepare and analyze the trial balance
165)
A bookkeeper has debited an asset account for $3,500 and credited a liability account for $2,000.
Which of the following would be an incorrect way to complete the recording of this transaction:
A)
Credit another liability account for $1,500.
B)
Credit another asset account for $1,500.
C)
Credit the owner’s capital account for $1,500.
D)
Credit a revenue account for $1,500.
E)
Debit another asset account for $1,500.
166)
A report that lists a business’s accounts and their balances, in which the total debit balances should
equal the total credit balances, is called a(n):
A)
Trial balance.
B)
Account balance.
C)
General Journal.
D)
Ledger.
E)
Chart of accounts.
167)
Identify the statement below that is true.
A)
The trial balance is another name for the balance sheet as long as debits balance with credits.
B)
Another name for the trial balance is the chart of accounts.
C)
If the trial balance is in balance, it proves that no errors have been made in recording and
posting transactions.
D)
The trial balance is a list of all accounts from the ledger with their balances at a point in time.
E)
The trial balance is a book of original entry.
168)
While in the process of posting from the journal to the ledger, a company failed to post a $500
debit to the Equipment account. The effect of this error will be that:
A)
The error will overstate the credits listed in the journal.
B)
The trial balance will not balance.
C)
The total debits in the trial balance will be larger than the total credits.
D)
The error will overstate the debits listed in the journal.
E)
The Equipment account balance will be overstated.
169)
A $15 credit to Sales was posted as a $150 credit. By what amount is the Sales account in error?
A)
$135 overstated.
B)
$150 overstated.
C)
$15 understated.
D)
$150 understated.
E)
$135 understated.
170)
At year-end, a trial balance showed total credits exceeding total debits by $4,950. This difference
could have been caused by:
A)
An error in the general journal where a $4,950 increase in Accounts Receivable was recorded
as an increase in Cash.
B)
A net income of $4,950.
C)
The balance of $49,500 in Accounts Payable being entered in the trial balance as $4,950.
D)
An error in the general journal where a $4,950 increase in Accounts Payable was recorded as
a decrease in Accounts Payable.
E)
The balance of $5,500 in the Office Equipment account being entered on the trial balance as a
debit of $550.
171)
Identify the item below that would cause the trial balance to not balance?
A)
The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a
debit to Cash for $750.
B)
A $50 cash receipt for the performance of a service was not recorded at all.
C)
A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts
Receivable and a credit to Cash.
D)
The purchase of office supplies on account for $3,250 was erroneously recorded in the journal
as $2,350 debit to Office Supplies Normal 0 false false false EN–IN X-NONE X-NONE and
$2,350 credit to Accounts Payable.
E)
The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a
credit to Cash for $1,200.
172)
The credit purchase of a new oven for $4,700 was posted to Kitchen Equipment as a $4,700 debit
and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?
A)
The total of the Debit column of the trial balance will exceed the total of the Credit column
by $9,400.
B)
The total of the Debit column of the trial balance will equal the total of the Credit column.
C)
The total of the Credit column of the trial balance will exceed the total of the Debit column
by $4,700.
D)
The total of the Credit column of the trial balance will exceed the total of the Debit column
by $9,400.
E)
The total of the Debit column of the trial balance will exceed the total of the Credit column
by $4,700.
173)
On a trial balance, if the Debit and Credit column totals are equal, then:
A)
All entries from the journal have been posted to the ledger correctly.
B)
The balance sheet would be correct.
C)
All ledger account balances are correct.
D)
Equal debits and credits have been recorded for transactions.
E)
All transactions have been recorded correctly.
174)
Given the following errors, identify the one by itself that will cause the trial balance to be out of
balance.
A)
A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries
Expense.
B)
A $75 cash receipt from a customer in payment of her account posted as a $75 debit to Cash
and a $75 credit to Cash.
C)
A $100 cash receipt from a customer in payment of her account posted as a $100 debit to
Cash and a $10 credit to Accounts Receivable.
D)
An $800 prepayment from a customer for services to be rendered in the future was posted as
an $800 debit to Unearned Revenue and an $800 credit to Cash.
E)
A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50
credit to Cash.
175)
A $130 credit to Supplies was credited to Fees Earned by mistake. By what amounts are the
accounts under- or overstated as a result of this error?
A)
Supplies, understated $130; Fees Earned, overstated $130.
B)
Supplies, overstated $130; Fees Earned, understated $130.
C)
Supplies, overstated $130; Fees Earned, overstated $130.
D)
Supplies, understated $260; Fees Earned, overstated $130.
E)
Supplies, overstated $260; Fees Earned, understated $130.
176)
All of the following are asset accounts except:
A)
Prepaid insurance.
B)
Supplies expense.
C)
Accounts Receivable.
D)
Equipment.
E)
Buildings.
177)
Compare the list of accounts below and choose the list that contains only accounts that would be
classified as asset accounts on the Chart of Accounts.
A)
Unearned Revenue; Accounts Payable; Owner’s Withdrawals.
B)
Notes Payable; Cash; Owner’s Withdrawals.
C)
Building; Prepaid Insurance; Supplies Expense.
D)
Accounts Payable; Cash; Supplies.
E)
Cash; Prepaid Insurance; Equipment.
178)
Which financial statement reports an organization’s financial position at a single point in time?
A)
Balance sheet.
B)
Cash flow statement.
C)
Trial balance.
D)
Income statement.
E)
Statement of owner’s equity.
179)
Joe Jackson opened Jackson’s Repairs on March 1 of the current year. During March, the following
transactions occurred and were recorded in the company’s books:
Jackson invested $25,000 cash in the business.
Jackson contributed $100,000 of equipment to the business.
The company paid $2,000 cash to rent office space for the month of March.
The company received $16,000 cash for repair services provided during March.
The company paid $6,200 for salaries for the month of March.
The company provided $3,000 of services to customers on account.
The company paid cash of $500 for utilities for the month of March.
8. The company received $3,100 cash in advance from a customer for repair services to be
provided in April.
Jackson withdrew $5,000 for his personal use from the company.
Based on this information, net income for March would be:
A) $8,400. B) $13,500. C) $5,300. D) $13,400. E) $10,300.
100
180)
Joel Consulting received $3,000 from a customer for services provided. Joel’s general journal entry
to record this transaction will be:
A)
Debit Cash, credit Accounts Receivable.
B)
Debit Accounts Payable, credit Services Revenue.
C)
Debit Services Revenue, credit Accounts Receivable.
D)
Debit Cash, credit Accounts Payable.
E)
Debit Cash, credit Services Revenue.
181)
Wiley Hill opened Hill’s Repairs on March 1 of the current year. During March, the following
transactions occurred and were recorded in the company’s books:
Wiley invested $25,000 cash in the business.
Wiley contributed $100,000 of equipment to the business.
The company paid $2,000 cash to rent office space for the month of March.
The company received $16,000 cash for repair services provided during March.
The company paid $6,200 for salaries for the month of March.
The company provided $3,000 of services to customers on account.