Deck 2: Recording Business Transactions

Question 1

of the following accounts is NOT an example of an owner's equity account?

A) Drawing
B) Capital
C) Additional investments
D) Cash

Answer 1

Cash

Question 2

In a typical chart of accounts, liabilities start with a __________and expenses start with a__________.

A) 1, 4
B) 2, 5
C) 2, 4
D) 1, 3

Answer 2

2, 5

Question 3

In a typical chart of accounts, revenues start with a __________ and assets start with a __________.

A) 4, 1
B) 5, 1
C) 2, 1
D) 3, 1

Answer 3

4, 1

Question 4

Which of the following are accrued expenses?

A) Taxes payable
B) Interest payable
C) Salary payable
D) All are accrued expenses

Question 5

the United States, we use double entry accounting, which means we record the dual effects of each transaction.

Question 6

owner's equity account is increased by a debit.

Question 7

of the following is the book (or printout) holding all the accounts?

A) Account
B) Trial balance
C) Journal
D) Ledger

Question 8

of the following is the chronological record of transactions?

A) Ledger
B) Account
C) Journal
D) Trial balance

Question 9

Which of the following is a list of all the accounts with their balances?

A) Journal
B) Trial balance
C) Ledger
D) Account

Question 10

A chart of accounts is a:

A) list of all the accounts with their balances.
B) book (or printout) holding all the accounts.
C) list of all the accounts with their account numbers.
D) chronological record of transactions.

Question 11

Which of the following accounts increases with a credit?

A) Cash
B) Capital
C) Accounts receivable
D) Both A and B

Question 12

Which of the following accounts increases with a debit?

A) Cash
B) Interest payable
C) Prepaid insurance
D) Both A and B

Question 13

Which of the following accounts decreases with a debit?

A) Interest payable
B) Prepaid insurance
C) Cash
D) Both A and B

Question 14

An owner invests $20,000 in her new business by depositing the cash in the business's checking account. Which of the following occurs?

A) Cash is credited for $20,000.
B) Cash is debited for $20,000.
C) Capital is debited for $20,000.
D) Both B and C occur.

Question 15

A business purchases equipment for cash in the amount of $8,000. Which of the following occurs?

A) Cash is credited for $8,000.
B) Cash is debited for $8,000.
C) Equipment is debited for $8,000.
D) Both A and C occur.

Question 16

A business makes a cash payment of $12,000 to a creditor. Which of the following occurs?

A) Cash is credited for $12,000.
B) Cash is debited for $12,000.
C) Accounts payable is credited for $12,000.
D) Both A and C occur.

Question 17

A business completes services for $16,000 on account. Which of the following occurs?

A) Cash is debited for $16,000.
B) Accounts receivable is debited for $16,000.
C) Service revenue is credited for $16,000.
D) Both B and C occur.

Question 18

A business pays $500 cash for supplies. Which of the following occurs?

A) Cash is debited for $500.
B) Accounts payable is credited for $500.
C) Supplies is debited for $500.
D) Both B and C occur.

Question 19

A business receives cash in payment of accounts receivable. Which of the following occurs?

A) A liability is debited and a liability is credited.
B) An asset is credited and a liability is debited.
C) An asset is debited and an asset is credited.
D) An asset is debited and a liability is credited.

Question 20

A sole proprietor takes withdrawals from the business. Which of the following occurs?

A) An asset is credited and an owner's equity account is debited.
B) An asset is credited and a liability is debited.
C) A liability is debited and a liability is credited.
D) An asset is debited and an asset is credited.

Question 21

A business makes a principal payment of cash on a note payable. The note payable was originally issued for the purchase of equipment. Which of the following occurs?

A) An asset is debited and a liability is credited.
B) A liability is debited and a liability is credited.
C) An asset is credited and a liability is debited.
D) An asset is debited and an asset is credited.

Question 22

A business makes a cash payment for advertising expense. Which of the following occurs?

A) A liability is debited and an expense is credited.
B) An asset is credited and a liability is debited.
C) An asset is credited and an expense is debited.
D) An asset is debited and a liability is credited.

Question 23

A business purchases equipment by paying cash of $8,000 and issuing a note payable of $12,000. Which of the following occurs?

A) Cash is credited for $8,000; Equipment is credited for $20,000; and Notes payable is debited for $12,000.
B) Cash is credited for $8,000; Equipment is debited for $20,000; and Notes payable is credited for $12,000.
C) Cash is debited for $8,000; Equipment is debited for $12,000; and Notes payable is credited for $20,000.
D) Cash is credited for $8,000; Equipment is credited for $12,000; and Notes payable is debited for $4,000.

Question 24

Which of the following accounts increase on the debit side?

A) Revenues and Liabilities
B) Assets and Liabilities
C) Assets and Revenues
D) Assets and Expenses

Question 25

A business receives a cash payment for services rendered. Which of the following occurs?

A) An asset is debited and a revenue account is credited.
B) An asset is credited and a liability is debited.
C) An asset is debited and a liability is credited.
D) An asset is debited and a revenue account is debited.

Question 26

Which of the following are increased on the debit side of the account?

A) Revenues
B) Expenses
C) Capital
D) Notes payable

Question 27

date of the transaction is one of the items included in a journal entry.

Question 28

journal entry presents only a part of the transaction. Information recorded in the ledger is necessary to complete the information about the transaction.

Question 29

journal entry includes which of the following items?

A) Titles of the accounts debited and credited, along with the dollar amounts
B) A brief explanation of the transaction
C) Date of the transaction
D) All of the above

Question 30

The first place that transactions are recorded in the accounting system is the __________.

Question 31

of the following journal entries would be recorded if a business purchased $200 of supplies on account?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Accounts payable } & & 200 & \\\hline & \text { Supplies } & & 200 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Supplies } & & 200 & \\\hline & \text { Accounts payable } & & 200 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Supplies } & & 200 & \\\hline & \text { Cash } & & 200 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 200 & \\\hline & \text { Supplies } & & 200 \\\hline\end{array}$$

Question 32

of the following journal entries would be recorded if a business received cash of $400 immediately after it performed services?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Service revenue } & & 400 & \\\hline & \text { Cash } & & 400 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Service revenue } & & 400 & \\\hline & \text { Accounts payable } & & 400 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 400 & \\\hline & \text { Service revenue } & & 400 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Service revenue } & & 400 & \\\hline & \text { Accounts receivable } & & 400 \\\hline\end{array}$$

Question 33

of the following journal entries would be recorded if a business paid cash in the amount of $600 on account? Supplies had been purchased on account last month.

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 600 & \\\hline & \text { Accounts payable } & & 600 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Accounts payable } & & 600 & \\\hline & \text { Cash } & & 600 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 600 & \\\hline & \text { Supplies } & & 600 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Accounts payable } & & 600 & \\\hline & \text { Supplies } & & 600 \\\hline\end{array}$$

Question 34

of the following journal entries would be recorded if Jane Brown formed a proprietorship by depositing cash in the amount of $6,000 in the corporation's bank account?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 6,000 & \\\hline & \text { Capital } & & 6,000 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Accounts payable } & & 6,000 & \\\hline & \text { Cash } & & 6,000 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Capital } & & 6,000 & \\\hline & \text { Cash } & & 6,000 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Capital } & & 6,000 & \\\hline & \text { Accounts payable } & & 6,000 \\\hline\end{array}$$

Question 35

of the following journal entries would be recorded if a business purchased equipment for $3,000 cash?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 3,000 & \\\hline & \text { Equipment } & & 3,000 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Equipment } & & 3,000 & \\\hline & \text { Cash } & & 3,000 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 3,000 & \\\hline & \text { Accounts payable } & & 3,000 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Equipment } & & 3,000 & \\\hline & \text { Accounts payable } & & 3,000 \\\hline\end{array}$$

Question 36

of the following journal entries would be recorded if a business received cash of $1,000 on account for services performed at an earlier date?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 1,000 & \\\hline & \text { Service revenue } & & 1,000 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Accounts receivable } & & 1,000 & \\\hline & \text { Service revenue } & & 1,000 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 1,000 & \\\hline & \text { Accounts receivable } & & 1,000 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Service revenue } & & 1,000 & \\\hline & \text { Accounts receivable } & & 1,000 \\\hline\end{array}$$

Question 37

of the following journal entries would be recorded if a business purchased equipment for $2,500 cash and supplies for $450 cash?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Equipment } & & 2,950 & \\\hline & \text { Cash } & & 2,500 \\\hline & \text { Supplies } & & 450 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 2,500 & \\\hline \text { Equipment } & & 450 & \\\hline & \text { Accounts receivable } & & 2,950 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 2,950 & \\\hline & \text { Equipment } & & 2,500 \\\hline & \text { Supplies } & & 450 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Equipment } & & 2,500 & \\\hline \text { Supplies } & & 450 & \\\hline & \text { Cash } & & 2,950 \\\hline\end{array}$$

Question 38

of the following journal entries would be recorded if a business performed services for $400 cash and $1,000 on account?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 1,400 & \\\hline & \text { Accounts receivable } & & 1,000 \\\hline & \text { Service revenue } & & 400 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 400 & \\\hline \text { Accounts receivable } & & 1,000 & \\\hline & \text { Service revenue } & & 1,400 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Service revenue } & & 1,000 & \\\hline \text { Cash } & & 400 & \\\hline & \text { Accounts receivable } & & 1,400 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Service revenue } & & 1,400 & \\\hline & \text { Cash } & & 1,000 \\\hline & \text { Accounts payable } & & 400 \\\hline\end{array}$$

Question 39

business makes a payment of $1,200 on a note payable, consisting of a $200 interest payment and a $1,000 principal payment. Which of the following journal entries would be recorded?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Notes payable } & & 1,000 & \\\hline \text { Interest expense } & & 200 & \\\hline & \text { Cash } & & 1,200 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 1,200 & \\\hline & \text { Notes payable } & & 1,000 \\\hline & \text { Interest expense } & & 200 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Notes payable } & & 1,200 & \\\hline & \text { Cash } & & 1,000 \\\hline & \text { Interest expense } & & 200 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 1,000 & \\\hline & \text { Notes payable } & & 1,200 \\\hline & \text { Interest expense } & & 200 \\\hline\end{array}$$

Question 40

A business purchases equipment by paying $8,000 in cash and issuing a note payable of $12,000. Which of the following journal entries would be recorded?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Equipment } & & 20,000 & \\\hline & \text { Notes payable } & & 12,000 \\\hline & \text { Cash } & & 8,000 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & \$ 8,000 & \\\hline \text { Notes payable } & & \$ 12,000 & \\\hline & \text { Equipment } & & \$ 20,000 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 8,000 & \\\hline \text { Notes payable } & & 4,000 & \\\hline & \text { Equipment } & & 12,000 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Equipment } & & 8,000 & \\\hline \text { Notes payable } & & 4,000 & \\\hline & \text { Cash } & & 12,000 \\\hline\end{array}$$

Question 41

Which of the following is the first step in the normal flow of accounting data from the journal to the ledger?

A) Posting
B) Preparation of trial balance
C) Transaction analysis
D) Journalizing

Question 42

Which of the following sequences represents the normal flow of accounting data from the journal to the ledger?

A) Transaction occurs; source documents are prepared; transaction analysis; transaction is journalized and posted.
B) Source documents are prepared; transaction analysis; transaction is journalized and posted; transaction occurs.
C) Transaction analysis; transaction is journalized and posted; transaction occurs; source documents are prepared.
D) Transaction occurs; transaction analysis; transaction is journalized and posted; source documents are prepared.

Question 43

Which of the following formulas is the expanded accounting equation for a corporation?

A) Assets + Revenues - Expenses = Liabilities + Common stock + Retained earnings - Dividends
B) Assets = Liabilities + Common stock + Retained earnings - Dividends + Revenues - Expenses
C) Assets + Liabilities + Common stock + Retained earnings = Dividends + Revenues - Expenses
D) Assets + Liabilities = Common stock + Retained earnings - Dividends + Revenues - Expenses

Question 44

A business purchased $200 of supplies on account and recorded the following journal entry:
$$\begin{array} { | l | l | l | l | } \hline \text { Supplies } & & 200 & \\\hline & \text { Accounts payable } & & 200 \\\hline\end{array}$$ Which of the following sets of ledger accounts reflect the posting of this transaction?

A)
$$\begin{array}{l}\text {Supplies }\\\begin{array} { l | l } \hline &200\end{array}\end{array}$$
$$\begin{array}{l}\text {Accounts payable }\\\begin{array} { l | l } \hline 200&\end{array}\end{array}$$
B)
$$\begin{array}{l}\text {Supplies }\\\begin{array} { l | l } \hline 200&\end{array}\end{array}$$
$$\begin{array}{l}\text {Accounts payable }\\\begin{array} { l | l } \hline 200&\end{array}\end{array}$$
C)
$$\begin{array}{l}\text {Supplies }\\\begin{array} { l | l } \hline 200&\end{array}\end{array}$$
$$\begin{array}{l}\text {Accounts payable }\\\begin{array} { l | l } \hline &200\end{array}\end{array}$$
D) $$\begin{array}{l}\text {Supplies }\\\begin{array} { l | l } \hline &200\end{array}\end{array}$$
$$\begin{array}{l}\text {Accounts payable }\\\begin{array} { l | l } \hline &200\end{array}\end{array}$$

Question 45

Which of the following journal entries would be recorded if a business purchased $200 of supplies by paying cash?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Accounts payable } & & 200 & \\\hline & \text { Supplies } & & 200 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Accounts payable } & & 200 & \\\hline & \text { Supplies } & & 200 \\\hline\end{array}$$ .
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Supplies } & & 200 & \\\hline & \text { cash } & & 200 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Supplies } & & 200 & \\\hline & \text { Accounts payable } & & 200 \\\hline\end{array}$$ .

Question 46

A bill is mailed to a client for services rendered. It will be paid in the following accounting period. Which of the following would be true as a result of mailing the bill to the client?

A) Owner's equity will decrease.
B) Total liabilities will decrease.
C) There will be no effect on total assets.
D) Net income will increase.

Question 47

Transferring the information from the journal to the general ledger is known as:

A) debit-credit theory.
B) preparing a trial balance.
C) posting.
D) T-account analysis.

Question 48

A customer increases sales by $500, paying $150 in cash and putting the rest on account. Which account is not affected by this transaction?

A) Cash
B) Accounts payable
C) Accounts receivable
D) Sales

Question 49

Which is NOT a part of recording a transaction in a general journal?

A) The post reference number of the journal page
B) The date
C) The debits and credits
D) The amounts of debits and credits

Question 50

The following transactions have been journalized and posted to the proper accounts.
1) Mark Call invested $7,000 cash in his new design services proprietorship.
2) Mark paid the first month's rent with $700.
3) Mark purchased equipment by paying $2,000 down and executing a note payable for $4,500.
4) Mark purchased supplies for $850 cash.
5) Mark billed a client for $4,000 of design services completed.
6) Mark received $3,000 of the account for the completed services.
What is the balance in Accounts receivable?

A) $8,500
B) $1,000
C) $7,000
D) $4,000

Question 51

The following transactions have been journalized and posted to the proper accounts. 1. Mark Call invested $7,000 cash in his new design services proprietorship..
2) Mark paid the first month's rent with $700.
3) Mark purchased equipment by paying $2,000 down and executing a note payable for $4,500.
4) Mark purchased supplies for $850 cash.
5) Mark billed a client for $4,000 of design services completed.
6) Mark received $3,000 of the account for the completed services.
What is the balance in Notes payable?

A) $1,000
B) $4,500
C) $7,000
D) $4,000

Question 52

The following transactions have been journalized and posted to the proper accounts.
1) Mark Call invested $7,000 cash in his new design services proprietorship..
2) Mark paid the first month's rent with $700.
3) Mark purchased equipment by paying $2,000 down and executing a note payable for $4,500.
4) Mark purchased supplies for $850 cash.
5) Mark billed a client for $4,000 of design services completed.
6) Mark received $3,000 of the account for the completed services.
What is the balance in Service revenue?

A) $1,000
B) $3,000
C) $4,000
D) $3,150

Question 53

The following transactions have been journalized and posted to the proper accounts. 1. Mark Call invested $7,000 cash in his new design services proprietorship..
2) Mark paid the first month's rent with $700.
3) Mark purchased equipment by paying $2,000 down and executing a note payable for $4,500.
4) Mark purchased supplies for $850 cash.
5) Mark billed a client for $4,000 of design services completed.
6) Mark received $3,000 of the account for the completed services.
What is the balance in Rent expense?

A) $3,150
B) $3,000
C) $700
D) $2,700

Question 54

McKenna Company purchases equipment for a cash down payment of $10,000 and a note payable of $30,000. Which of the following journal entries is correctly recorded using the accepted standard format?

A) $$\begin{array} { | l | l | l | l | } \hline & \text { Cash } & & 10,000 \\\hline \text { Equipment } & & 40,000 & \\\hline & \text { Note payable } & & 30,000 \\\hline\end{array}$$
B) $$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 10,000 & \\\hline \text { Note payable } & & 30,000 & \\\hline & \text { Equipment } & & 40,000 \\\hline\end{array}$$
C) $$\begin{array} { | l | l | l | l | } \hline & \text { Cash } & 10,000 & \\\hline & \text { Note payable } & 30,000 & \\\hline \text { Equipment } & & & 40,000 \\\hline\end{array}$$
D) $$\begin{array} { | l | l | l | l | } \hline \text { Equipment } & & 40,000 & \\\hline & \text { Cash } & & 10,000 \\\hline & \text { Note payable } & & 30,000 \\\hline\end{array}$$

Question 55

Which of the following is true about the process of posting?

A) Entries should be posted in account number order.
B) The process of posting transfers the journalized entries to their respective accounts in the ledger.
C) The process of posting transfers accumulated debits and credits to the trial balance.
D) None of the above are true.

Question 56

Services were performed on account. Which of the following would be true?

A) Total assets decrease, net income increases, and owner's equity increases.
B) Net income decreases, owner's equity increases, and total assets increase.
C) Total assets increase, net income increases, and owner's equity increases.
D) Net income decreases, total assets decrease, and owner's equity decreases.

Question 57

A proprietor makes withdrawals. Which of the following would be true?

A) Net income would decrease.
B) Total assets would increase.
C) There would be no effect on total assets.
D) Net income decreases, total assets decrease, and owner's equity decreases.

Question 58

A building is purchased by signing a mortgage note. Which of the following would be true?

A) Total liabilities decrease.
B) There is no effect on owner's equity.
C) Owner's equity is increased.
D) Total assets decrease.

Question 59

balance sheet is an internal document used only by company insiders.

Question 60

trial balance will usually report total debits that are not equal to total credits.

Question 61

general public generally does not see a company's trial balance.

Question 62

trial balance summarizes a ledger by listing all the accounts with their balances.

Question 63

of the following is a method used to detect errors when the two columns of the trial balance are NOT equal?

A) Compute the difference in the columns and search the trial balance for a transposition if the difference is evenly divisible by 9.
B) Compute the difference in the columns, divide the difference between total debits and total credits by 2 and search for the amount in the trial balance.
C) Compute the difference in the columns and search the trial balance for the missing amount.
D) All of the above are suggested methods for detecting errors.

Question 64

is a trial balance usually prepared?

A) After each entry is journalized
B) At the end of each accounting period
C) At the end of each day
D) When the business is liquidated

Question 65

Which of the following errors could be detected by examining a trial balance?

A) A journal entry for a $250 payment on account was posted as a $520 debit to Accounts payable and a $250 credit to Cash.
B) A journal entry for a $250 payment on account was not posted.
C) A journal entry for a $75 payment for Rent expense was posted twice.
D) A journal entry for a $75 payment for Rent expense was posted as a debit to Salary expense and a credit to Cash.

Question 66

A trial balance is prepared and the sum of the debits equals the sum of the credits. Which of the following conclusions is correct?

A) All of the transactions have been correctly posted.
B) The accounting equation is mathematically correct.
C) All errors have been found and corrected.
D) All of the account balances are correct.

Question 67

Which of the following is TRUE of a trial balance?

A) A trial balance contains all of the information to prepare the statement of retained earnings.
B) A trial balance contains totals for debits and credits.
C) A trial balance contains totals for revenues and expenses.
D) A trial balance contains totals for assets and liabilities.

Question 68

A $250 payment on account was posted as a debit to Cash and a credit to Accounts payable. Which of the following conditions will exist?

A) Accounts payable will be understated.
B) Stockholders' equity will be overstated.
C) Accounts receivable will be overstated.
D) Cash will be overstated.

Question 69

A receipt of $300 cash on account was recorded as a $500 debit to Accounts payable and a $500 credit to Cash. Which of the following conditions will exist?

A) Cash is overstated by $500.
B) Cash is overstated by $800.
C) Cash is understated by $800.
D) Cash is understated by $500.

Question 70

The credit side of an entry to record the payment of rent was not posted. Which of the following conditions will exist?

A) Expenses will be overstated.
B) Assets will be overstated.
C) Assets will be understated.
D) Liabilities will be understated

Question 71

The purpose of a trial balance is to:

A) check to make sure the balances in the accounts are correct.
B) help you to find mistakes made in posting.
C) help revise your accounts in the correct order.
D) make sure that debits equals credits.

Question 72

An error in a trial balance where the decimal point or a number has shifted from the left to the right or vice versa is called a:

A) transposition.
B) slide.
C) debit imbalance.
D) credit imbalance

Question 73

A transaction was recorded as a debit to Phone expense and a credit to Cash. After reviewing the trial balance and searching, we find that the debit should have gone to Utilities expense. The correction would be:

A) debit Utilities expense, credit Cash.
B) debit Cash, credit Phone expense.
C) debit Utilities expense, credit Phone expense.
D) none of the above.

Question 74

Posting $345 as $435 would be an example of a:

A) transposition.
B) slide.
C) debit imbalance.
D) credit imbalance.

Question 75

The last step before doing the financial statements is:

A) post all entries.
B) record all transactions in the journal.
C) prepare an adjusted trial balance.
D) alphabetize the accounts.

Question 76

Posting a $600 debit as a $600 credit in the Cash account,:

A) makes Cash imbalanced by $ 300.
B) makes Cash imbalanced by $ 600.
C) makes Cash imbalanced by $1200.
D) makes Cash imbalanced by some other number.