Question 1

In the seller's records, the sale of merchandise on account would:
A)increase assets and increase expenses.
B)increase assets and decrease liabilities.
C)increase assets and increase paid-in capital.
D)increase assets and decrease revenues.

Accepted Answer

A

Question 2

Chicago Consulting, an engineering consulting firm, provided $6,000 of services to a client; the client paid $2,000 when the bill was submitted and will pay the balance within a week.Chicago Consulting will record this transaction by:
A) $$\begin{array} { | l |l | r | r | } 
\hline \text { Dr. } & \text { Cash } & 2,000 & \
\hline \text { Dr. } & \text { Fees receivable } & 4,000 & \
\hline \text { Cr. } & \text { Fees revenue } & & 6,000 \
\hline
\end{array}$$
B) $$\begin{array} { | l | l | r | r | } 
\hline \text { Dr. } & \text { Fees revenule } & 6,000 & \
\hline \text { Cr. } & \text { Fees receivable } & & 4,000 \
\hline \text { Cr. } & \text { Cash } & & 2,000 \
\hline
\end{array}$$
C) $$\begin{array} { | c | c | r | r | } 
\hline \text { Dr. } & \text { Cash } & 2,000 & \
\hline \text { Cr. } & \text { Fees revernue } & & 2,000 \
\hline
\end{array}$$
D) $\begin{array}{|l|l|r|r|}
\hline \text { Dr. } & \text { Cash } & 2,000 & \
\hline \text { Dr. } & \text { Fees revenue } & 4,000 & \
\hline \text { Cr. } & \text { Fees receivable } & & 6,000 \
\hline
\end{array}$

Accepted Answer

The correct journal entry records the cash received and the receivable for the balance, while recognizing the total revenue earned.

Question 3

In an advertiser's records, a newspaper ad submitted and published this week with the agreement to pay for it next week would:
A)decrease assets and decrease expenses.
B)increase liabilities and increase expenses.
C)decrease assets and increase revenue.
D)increase assets and decrease liabilities.

Accepted Answer

The agreement to pay for the ad next week creates a liability (accounts payable) and the expense is recognized when the ad is published.

Question 4

A debit entry will:
A)decrease an asset account.
B)increase a liability account.
C)increase paid-in capital.
D)increase an expense account.

Accepted Answer

A debit entry increases an expense account, as expenses are recorded as debits in accounting.

Question 5

An expanded version of the accounting equation could be:
A)Assets + Revenues = Liabilities + Stockholders' Equity − Expenses
B)Assets − Liabilities = Paid-in Capital − Revenues − Expenses
C)Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues − Expenses − Dividends
D)Assets = Liabilities + Paid-in Capital − Revenues + Expenses

Accepted Answer

The expanded accounting equation includes components of equity such as paid-in capital, beginning retained earnings, revenues, expenses, and dividends, which are all part of the equity section.

Question 6

Unquiet Hands, Inc.borrowed $30,000 on October 1, 2019 at 6% interest with both principal and interest due on September 30, 2020.Which of the following journal entries should the firm use to accrue interest at the end of each month?
A) $$\begin{array} { | l | c | } 
\hline \text { Dr. } & \text { Iriterest payable } \
\hline \text { Cr. } & \text { Cash } \
\hline
\end{array}$$
B) $\begin{array}{|c|c|}
\hline \text { Dr. } & \text { Interest receivable } \
\hline \mathrm{Cr} . & \text { Interest payable } \
\hline
\end{array}$

C) $\begin{array}{|l|l|}
\hline \text { Dr. } & \text { Interest expense } \
\hline \mathrm{Cr} . & \text { Interest payable } \
\hline
\end{array}$

D) $\begin{array}{|l|l|}
\hline \text { Dr. } & \text { Interest payable } \
\hline \mathrm{Cr} . & \text { Interest expense } \
\hline
\end{array}$

Accepted Answer

The correct journal entry to accrue interest is to debit Interest Expense and credit Interest Payable, reflecting the cost incurred and the liability to pay it.

Question 7

A credit entry will:
A)always decrease the account balance.
B)always increase the account balance.
C)increase the balance of a revenue account.
D)increase the balance of an expense account.

Accepted Answer

A credit entry increases the balance of revenue accounts, as revenues are recorded on the credit side in accounting.

Question 8

In the buyer's records, the purchase of merchandise on account would:
A)increase assets and increase expenses.
B)increase assets and increase liabilities.
C)increase liabilities and increase paid-in capital.
D)have no effect on total assets.

Accepted Answer

When merchandise is purchased on account, inventory (an asset) increases, and accounts payable (a liability) also increases.

Question 9

Unquiet Hands, Inc.borrowed $30,000 on October 1, 2019 at 6% interest with both principal and interest due on September 30, 2020.How much should be in Unquiet Hands, Inc.'s interest payable account at December 31, 2019?
A)$450
B)$1,800
C)$0
D)$1,350

Accepted Answer

The interest for the period from October 1, 2019, to December 31, 2019, is calculated as $30,000 * 6% * (3/12) = $450.

Question 10

A newspaper ad submitted and published this week, with the agreement to get paid for it next week would, in the newspaper's records:
A)increase assets and increase revenues.
B)increase assets and decrease liabilities.
C)increase assets and increase expenses.
D)have no effect on total assets.

Accepted Answer

The newspaper has increased its assets by the amount of the ad revenue, and has increased its revenues by the same amount.

Question 11

The accountant at WooSah! USA made an adjusting entry at the end of February to accrue interest on a note receivable from a customer.The effect of this entry is to:
A)decrease ROI for February.
B)increase ROI for February.
C)decrease working capital at February 28.
D)decrease the acid-test ratio at February 28.

Accepted Answer

Accruing interest on a note receivable increases interest income, which in turn increases net income, leading to an increase in the return on investment (ROI) for February.

Question 12

An adjusting journal entry recording an accrual:
A)results in a better matching of revenues and expenses.
B)will involve a debit or credit to cash.
C)will affect balance sheet accounts only.
D)will most likely include a debit to a liability account.

Accepted Answer

An adjusting journal entry for an accrual ensures that revenues and expenses are recorded in the period they are incurred, which results in a better matching of revenues and expenses.

Question 13

The effect of an adjustment is:
A)to correct an entry that was not in balance.
B)to increase the accuracy of the financial statements.
C)to record cash receipts and payments not previously recorded.
D)to close the books.

Accepted Answer

An adjustment is made to increase the accuracy of the financial statements.

Question 14

A credit entry will:
A)increase an asset account.
B)increase a liability account.
C)decrease paid-in capital.
D)increase an expense account.

Accepted Answer

The answer of A credit entry will:
A)increase an asset account.
B)increase...

Question 15

Unquiet Hands, Inc.borrowed $30,000 on October 1, 2019 at 6% interest with both principal and interest due on September 30, 2020.Which of the following journal entries should Unquiet Hands, Inc.use to record the payment of interest on September 30, 2020?
A) $\begin{array}{|l|l|}
\hline \text { Dr. } & \text { Interest payable } \
\hline \mathrm{Cr} . & \text { Cash } \
\hline
\end{array}$

B) $\begin{array}{|c|c|}
\hline \text { Dr. } & \text { Interest receivable } \
\hline \mathrm{Cr} . & \text { Interest payable } \
\hline
\end{array}$

C) $\begin{array}{|l|l|}
\hline \text { Dr. } & \text { Interest expense } \
\hline \mathrm{Cr} . & \text { Interest payable } \
\hline
\end{array}$

D) $\begin{array}{|l|l|}
\hline \text { Dr. } & \text { Interest payable } \
\hline \mathrm{Cr} . & \text { Interest expense } \
\hline
\end{array}$

Accepted Answer

The interest for the loan is due on September 30, 2020. The correct entry to record the payment of interest is to debit Interest Payable (to remove the liability) and credit Cash (to reflect the payment).

Question 16

Wisdom Co.has a note payable to its bank.An adjustment is likely to be required on Wisdom's books at the end of every month that the loan is outstanding to record the:
A)amount of interest paid during the month.
B)amount of total interest to be paid when the note is paid off.
C)amount of principal payable at the maturity date of the note.
D)accrued interest expense for the month.

Accepted Answer

An adjustment is required to record the accrued interest expense for the month, as interest accumulates over time and needs to be recognized in the financial statements monthly.

Question 17

Alpha Bot Industries has 30 employees who work Monday through Friday each week; each employee earns $150 per day and is paid every Friday.The end of the accounting period is on a Tuesday.How much wages expense should the firm accrue at the end of the period?
A)$4,500
B)$6,000
C)$0
D)$9,000

Accepted Answer

The firm should accrue wages for Monday and Tuesday, which is 2 days. With 30 employees earning $150 per day, the calculation is 30 employees x $150/day x 2 days = $9,000.

Question 18

To accrue $7,100 of employee salaries for the last week of February, the employer's journal entry is:
A) $$\begin{array} { | c | l | r | r | } 
\hline \text { Dr. } & \text { Salaries expense } & 7,100 & \
\hline \text { Cr. } & \text { Cash } & & 7,100 \
\hline
\end{array}$$
B) $$\begin{array} { | c | c | r | r | } 
\hline \text { Dr. } & \text { Salaries expense } & 7,100 & \
\hline \text { Cr. } & \text { Salaries payable } & & 7,100 \
\hline
\end{array}$$
C) $$\begin{array} { | l | c | r | r | } 
\hline \text { Dr. } & \text { Salaries payable } & 7,100 & \
\hline \text { Cr. } & \text { Cash } & & 7,100 \
\hline
\end{array}$$
D) $$\begin{array} { | l | c | r | r | } 
\hline \text { Dr. } & \text { Salaries expense } & 7,100 & \
\hline \text { Cr. } & \text { Fee reveruse } & & 7,100 \
\hline
\end{array}$$

Accepted Answer

The correct journal entry to accrue salaries is to debit Salaries Expense and credit Salaries Payable, reflecting the obligation to pay the accrued salaries in the future.

Question 19

Which of the following is not one of the 5 questions of transaction analysis?
A)What's going on?
B)Which accounts are affected?
C)Is this an accrual?
D)Does the balance sheet balance?
E)Does my analysis make sense?

Accepted Answer

Transaction analysis typically involves understanding the nature of the transaction, identifying affected accounts, ensuring the balance sheet balances, and verifying the analysis. "Is this an accrual?" is not a standard question in basic transaction analysis.

Question 20

A debit entry will:
A)always decrease the account balance.
B)always increase the account balance.
C)increase the balance of a revenue account.
D)increase the balance of an expense account.

Accepted Answer

A debit entry increases the balance of an expense account, as expenses are increased by debits in accounting.

Quiz 4: The Bookkeeping Process and Transaction Analysis

In the seller's records, the sale of merchandise on account would:

Chicago Consulting, an engineering consulting firm, provided $6,000 of services to a client; the client paid $2,000 when the bill was submitted and will pay the balance within a week.Chicago Consulting will record this transaction by:

In an advertiser's records, a newspaper ad submitted and published this week with the agreement to pay for it next week would:

A debit entry will:

An expanded version of the accounting equation could be:

Unquiet Hands, Inc.borrowed $30,000 on October 1, 2019 at 6% interest with both principal and interest due on September 30, 2020.Which of the following journal entries should the firm use to accrue interest at the end of each month?

A credit entry will:

In the buyer's records, the purchase of merchandise on account would:

Unquiet Hands, Inc.borrowed $30,000 on October 1, 2019 at 6% interest with both principal and interest due on September 30, 2020.How much should be in Unquiet Hands, Inc.'s interest payable account at December 31, 2019?

A newspaper ad submitted and published this week, with the agreement to get paid for it next week would, in the newspaper's records:

The accountant at WooSah! USA made an adjusting entry at the end of February to accrue interest on a note receivable from a customer.The effect of this entry is to:

An adjusting journal entry recording an accrual:

The effect of an adjustment is:

A credit entry will:

Unquiet Hands, Inc.borrowed $30,000 on October 1, 2019 at 6% interest with both principal and interest due on September 30, 2020.Which of the following journal entries should Unquiet Hands, Inc.use to record the payment of interest on September 30, 2020?

Wisdom Co.has a note payable to its bank.An adjustment is likely to be required on Wisdom's books at the end of every month that the loan is outstanding to record the:

Alpha Bot Industries has 30 employees who work Monday through Friday each week; each employee earns $150 per day and is paid every Friday.The end of the accounting period is on a Tuesday.How much wages expense should the firm accrue at the end of the period?

To accrue $7,100 of employee salaries for the last week of February, the employer's journal entry is:

Which of the following is not one of the 5 questions of transaction analysis?

A debit entry will: