Question 1

Of the following errors,which one will cause the trial balance to be out of balance?

Accepted Answer

The answer of Of the following errors,which one will cause...

Question 2

If the Debit and Credit column totals of a trial balance are equal,then:

Accepted Answer

The equality of debit and credit column totals in a trial balance only ensures that the total debit entries and total credit entries are equal. It does not guarantee the accuracy of individual transactions, the correct posting of all journal entries to the ledger, the correctness of all ledger account balances, or the accuracy of the balance sheet.

Question 3

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit.What effect would this error have on the trial balance?

Accepted Answer

The answer of The credit purchase of a delivery truck...

Question 4

A company had the following account balances at year-end: Cash……………………………………… $30,000
Accounts receivable……………………… 32,000
Accounts payable………………………… 20,000
Fees earned…………………………………..65,000
Rent expense…………………………………15,000
Insurance expense……………………………..4,800
Supplies………………………………………..5,000
Common stock……………………………….5,000
Retained earnings………………………….....14,800
Dividends………………………………… 18,000
If all of the accounts have normal balances,what are the total debits on the trial balance?

Accepted Answer

The total debits on the trial balance include Cash ($30,000), Accounts Receivable ($32,000), Rent Expense ($15,000), Insurance Expense ($4,800), Supplies ($5,000), and Dividends ($18,000), which sum up to $104,800.

Question 5

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?

Accepted Answer

The answer of What would be the account balance in...

Question 6

Accountants at Amalgamated Corporation incorrectly journalized a $50,000 equipment purchase as a debit to Buildings.This error was not discovered before the journal entry was posted.What is the correcting entry?

Accepted Answer

The incorrect entry debited Buildings instead of Equipment, which means that Buildings is overstated by $50,000 and Equipment is understated by $50,000. Therefore, the correcting entry should debit Equipment and credit Buildings for $50,000 each to correct the error. Option A and C are incorrect because they result in either overstating or understating both accounts by $50,000 each. Option D is also incorrect because it overcorrects the error by overstating Equipment by $100,000 and understating Buildings by $100,000. Option E is incorrect because it overcorrects the error by overstating Equipment by $50,000 more than the original amount and understating Buildings by only $50,000.

Question 7

A $72,000 receipt of cash from a customer paying on their account was recorded as a $72,000 debit to Accounts Receivable.Assuming this journal entry was posted,what correcting entry (if any) is needed?

Accepted Answer

The answer of A $72,000 receipt of cash from a...

Question 8

Which of the following statements are true?

Accepted Answer

The statement that is true is D. The trial balance is a list of all accounts from the ledger with their balances at a point in time. A is false because although a balanced trial balance indicates that no arithmetic errors have been made, it does not guarantee that all transactions have been posted or recorded correctly. B is false because the trial balance is not a book of original entry, but rather a summary of accounts. C is false because the chart of accounts is a list of all accounts used by a business, while the trial balance is a summary of those accounts at a specific time. E is false because the trial balance is not another name for the balance sheet.

Question 9

A trial balance prepared at year-end showed total credits exceeding total debits by $4,950.This discrepancy could have been caused by:

Accepted Answer

The answer of A trial balance prepared at year-end showed...

Question 10

A company failed to post a $50 debit to the Office Supplies account.The effect of this error will be that the:

Accepted Answer

The error will cause the trial balance to not balance because the total debits will be understated by $50 and the total credits will be correct.

Question 11

According to IFRS,comparative information on financial statements is:

Accepted Answer

IFRS requires that financial statements include comparative information for the preceding period to provide context and enhance the understanding of the current period's financial data.

Question 12

A $15 credit to Sales was posted as a $150 credit.By what amount is Sales in error?

Accepted Answer

The error made was posting a $150 credit instead of the correct $15 credit, resulting in Sales being overstated by the difference between the two amounts, which is $135.

Question 13

A $130 credit to Office Equipment was credited to Fees Earned by mistake.By what amounts are the accounts under- or overstated as a result of this error?

Accepted Answer

The answer of A $130 credit to Office Equipment was...

Question 14

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?

Accepted Answer

The answer of What would be the account balance in...

Question 15

Given the trial balance amounts below,compute ending retained earnings.

Accepted Answer

The answer of Given the trial balance amounts below,compute ending...

Question 16

Which of the following is a TRUE statement concerning a company's financial statements?

Accepted Answer

The income statement is also known as the earnings statement, as it reflects the company's earnings over a specific period.

Question 17

A report that lists accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n):

Accepted Answer

A trial balance is used to ensure that the total debits of all accounts in the ledger equal the total credits. This is an important step in ensuring the accuracy of financial statements. Option A refers to individual balances of accounts, while option C is a collection of all accounts. Option D is a listing of all account names and numbers, while option E is used to record transactions in chronological order.

Question 18

Which of the following situations would result in a trial balance that does not balance?

Accepted Answer

A trial balance will not balance if there is an unequal debit and credit entry, as in option E where both entries are debits.

Question 19

What are the total assets shown on the trial balance below?

Accepted Answer

The answer of What are the total assets shown on...

Question 20

Which of the following accounts is a balance sheet account?

Accepted Answer

Wages Payable is a liability account which is a balance sheet account. Operating Activities, Revenues, Dividends and Expenses are all income statement accounts.

Quiz 2: Accounting System and Financial Statements

Of the following errors,which one will cause the trial balance to be out of balance?

If the Debit and Credit column totals of a trial balance are equal,then:

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit.What effect would this error have on the trial balance?

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?

Accountants at Amalgamated Corporation incorrectly journalized a $50,000 equipment purchase as a debit to Buildings.This error was not discovered before the journal entry was posted.What is the correcting entry?

A $72,000 receipt of cash from a customer paying on their account was recorded as a $72,000 debit to Accounts Receivable.Assuming this journal entry was posted,what correcting entry (if any) is needed?

Which of the following statements are true?

A trial balance prepared at year-end showed total credits exceeding total debits by $4,950.This discrepancy could have been caused by:

A company failed to post a $50 debit to the Office Supplies account.The effect of this error will be that the:

According to IFRS,comparative information on financial statements is:

A $15 credit to Sales was posted as a $150 credit.By what amount is Sales in error?

A $130 credit to Office Equipment was credited to Fees Earned by mistake.By what amounts are the accounts under- or overstated as a result of this error?

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?

Given the trial balance amounts below,compute ending retained earnings.

Which of the following is a TRUE statement concerning a company's financial statements?

A report that lists accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n) :

Which of the following situations would result in a trial balance that does not balance?

What are the total assets shown on the trial balance below?

Which of the following accounts is a balance sheet account?