Question 1

A trial balance has which of the following features?
A) Totals for balance sheet accounts only
B) Totals for income statement accounts only
C) Totals for all accounts listed in the ledger
D) Totals for all asset and liability accounts only

Accepted Answer

A trial balance lists the ending balances of all accounts from the general ledger, including all asset, liability, income statement, and balance sheet accounts. Therefore, the correct answer is C.

Question 2

The normal balance of the Accounts Payable account is a ________ because it is a(n) ________ account.
A) credit; liability
B) debit; stockholders' equity
C) credit; expense
D) debit; asset

Accepted Answer

The normal balance of the Accounts Payable account is a credit because it is a liability account. This means that the balance represents the amount that the company owes to its suppliers for goods or services that have been purchased on credit. As such, an increase in the Accounts Payable balance represents an increase in the company's liabilities, and this is reflected by a credit entry.

Question 3

When setting up the numbering system for a company's chart of accounts:
A) the account numbers generally have four or more digits.
B) asset accounts will begin with the number 5.
C) revenue accounts will begin with the number 4.
D) there cannot be a gap between account numbers.

Accepted Answer

The answer of When setting up the numbering system for...

Question 4

Which of the following is a correct statement about a chart of accounts?
A) It is used only by service corporations.
B) It can be used to determine the balance in an account.
C) It is a tool used by accountants to help prepare the financial statements.
D) It lists the asset accounts first.

Accepted Answer

The answer of Which of the following is a correct...

Question 5

The Accounts Receivable account for Rusty's Mechanic Shop had a beginning balance of $12,000. During the month, Rusty received payments of $7,000 on account and made sales on account of $16,000. The ending balance in the Accounts Receivable account is:
A) $3,000.
B) $9,000.
C) $21,000.
D) $35,000.

Accepted Answer

The ending balance is calculated as: Beginning balance ($12,000) + Sales on account ($16,000) - Payments received ($7,000) = $21,000.

Question 6

ABC Company began the month with a balance of $70,000 in Accounts Receivable. An analysis of the account determined that sales on account for the month totaled $110,000. At the end of the month, the balance in Accounts Receivable was $$85,000. From this information, it can be determined that the ABC Company had collections from customers on account of:
A) $15,000.
B) $45,000.
C) $95,000.
D) $115,000.

Accepted Answer

The collections from customers on account can be calculated as: Beginning balance ($70,000) + Sales on account ($110,000) - Ending balance ($85,000) = Collections ($95,000).

Question 7

Which of the following is a correct numbering system for a chart of accounts?
A) Office supplies is numbered 0145.
B) Notes payable is numbered 20.
C) Advertising expense is numbered 877.
D) Interest revenue is not given an account number because it is not used on a monthly basis.

Accepted Answer

The numbering system for a chart of accounts typically follows a hierarchical structure where accounts are grouped and numbered according to their category and subcategory. Therefore, it is more appropriate to assign a two-digit number, such as 20, to a category of accounts, such as liabilities, rather than to individual accounts such as notes payable. Options A and C use four-digit account numbers which go beyond the standard numbering system. Option D is incorrect because interest revenue is still an account that should be assigned a number even if it is not used monthly.

Question 8

The accounts of Amy's Pencil Shop, Inc., follow with their normal balances at May 31, 2012. The accounts are listed in alphabetical order.
  REQUIRED:
Prepare the company's trial balance at May 31, 2012, listing accounts in proper sequence.

Accepted Answer

The answer of The accounts of Amy's Pencil Shop, Inc.,...

Question 9

Golden Company had a balance of $40,000 in Accounts Payable at the beginning of June, and purchased $30,000 of merchandise on account during the month At the end of June, Golden's Account Payable balance was $28,000. What amount did Golden pay on account during June?
A) $38,000
B) $42,000
C) $108,000
D) The amount cannot be determined from the information given.

Accepted Answer

To find out how much Golden Company paid on account during June, we need to calculate the total amount of payments they made.

Starting Accounts Payable balance: $40,000 
Purchases on account: $30,000

Total Accounts Payable in June:

$40,000 (starting balance) + $30,000 (purchases) = $70,000

To figure out how much Golden Company paid on account, we need to find the difference between the total Accounts Payable in June and the ending balance:

$70,000 - $28,000 = $42,000

Therefore, Golden Company paid $42,000 on account during June. The answer is B.

Question 10

A trial balance has total debits of $720,000 and total credits of $850,000, with a debit balance of $65,000 for notes payable. This situation indicates:
A) a slide.
B) an incorrect posting.
C) a transposition.
D) that none of the above are correct.

Accepted Answer

An incorrect posting would cause the debits and credits to be unequal.

Question 11

When using a four-column ledger account format, the pair of columns on the far right is used to show the:
A) names of the accounts being debited and credited.
B) transaction dates and journal reference.
C) account balance.
D) debit and credit amounts posted from journal entries.

Accepted Answer

The answer of When using a four-column ledger account format,...

Question 12

The Diamond Store began business on June 1. During the month of June, it had cash payments of $9,000.At the end of June, it had a $14,000 balance in cash. Based on this information, the cash receipts for the month of June:
A) were $5,000.
B) were $16,000.
C) were $23,000.
D) cannot be determined.

Accepted Answer

The answer of The Diamond Store began business on June...

Question 13

Which of the following statements regarding a trial balance is TRUE?
A) A trial balance may be taken at any time during the accounting period.
B) A trial balance is a list of all accounts with their balances.
C) A trial balance shows that total debits equals total credits.
D) All of the above are true.

Accepted Answer

A) A trial balance can be taken at any time during the accounting period, although it is typically taken at the end of a period to ensure accuracy before preparing financial statements. 
B) A trial balance is indeed a list of all accounts with their balances, as it serves to summarize the balances of all accounts in the general ledger. 
C) The purpose of a trial balance is to ensure that the total debits equal the total credits, which indicates that the accounting equation (assets = liabilities + equity) is in balance. Therefore, this statement is also true. 
Therefore, all of the given statements are true, making option D the correct answer.

Question 14

Aurora Company had a cash balance On May 1 of $17,000. At the end of May, the cash balance had increased to $28,000. During the month of May, Aurora received cash of $26,000 from various sources.
Based on this information, cash payments for the month of May:
A) were $11,000.
B) were $15,000.
C) were $19,000.
D) cannot be determined from the information given.

Accepted Answer

The answer of Aurora Company had a cash balance On...

Question 15

Which of the following is a correct numbering system for a chart of accounts?
A) Accounts payable is numbered 153.
B) Utilities expense is numbered 487.
C) Accounts receivable is numbered 104.
D) Sales revenue is numbered 809.

Accepted Answer

Accounts receivable is typically numbered in the 100s range in a chart of accounts. The other account numbers listed do not follow standard numbering conventions.

Question 16

Below is the trial balance for Puff Toys.
   When trying to determine why the trial balance does not balance, it was discovered that:
1. Several of the accounts listed in the trial balance are in the wrong column. All accounts have normal balances.
2. The accountant forgot to record a credit to sales revenue of $1,000.
3. A transaction to record the payment of rent of $1,000 for the month was not recorded at all.
Required:
Prepare a corrected trial balance in good form.

Accepted Answer

The answer of Below is the trial balance for Puff...

Question 17

Put an "X" in the appropriate box to indicate if the normal balance of an account is a Debit or a Credit balance. The first account has been completed for you as an example.

Accepted Answer

The answer of Put an "X" in the appropriate box...

Question 18

Missy's Exotic Vacations, Inc., had the following transactions during its first month of operations:
  REQUIRED:
1. Journalize the entries. Omit the explanations.
2. Post the entries to the T-accounts.
3. Prepare a trial balance at the end of the month.

Accepted Answer

The answer of Missy's Exotic Vacations, Inc., had the following...

Question 19

Which account has a normal debit balance?
A) Salaries payable
B) Common Stock
C) Advertising Expense
D) Service revenue

Accepted Answer

The answer of Which account has a normal debit balance?
A)...

Quiz 2: Transaction Analysis

A trial balance has which of the following features?

The normal balance of the Accounts Payable account is a because it is a(n) account.

When setting up the numbering system for a company's chart of accounts:

Which of the following is a correct statement about a chart of accounts?

The Accounts Receivable account for Rusty's Mechanic Shop had a beginning balance of $12,000. During the month, Rusty received payments of $7,000 on account and made sales on account of $16,000. The ending balance in the Accounts Receivable account is:

Which of the following is a correct numbering system for a chart of accounts?

The accounts of Amy's Pencil Shop, Inc., follow with their normal balances at May 31, 2012. The accounts are listed in alphabetical order. REQUIRED: Prepare the company's trial balance at May 31, 2012, listing accounts in proper sequence.

Golden Company had a balance of $40,000 in Accounts Payable at the beginning of June, and purchased $30,000 of merchandise on account during the month At the end of June, Golden's Account Payable balance was $28,000. What amount did Golden pay on account during June?

A trial balance has total debits of $720,000 and total credits of $850,000, with a debit balance of $65,000 for notes payable. This situation indicates:

When using a four-column ledger account format, the pair of columns on the far right is used to show the:

The Diamond Store began business on June 1. During the month of June, it had cash payments of $9,000.At the end of June, it had a $14,000 balance in cash. Based on this information, the cash receipts for the month of June:

Which of the following statements regarding a trial balance is TRUE?

Aurora Company had a cash balance On May 1 of $17,000. At the end of May, the cash balance had increased to $28,000. During the month of May, Aurora received cash of $26,000 from various sources. Based on this information, cash payments for the month of May:

Which of the following is a correct numbering system for a chart of accounts?

Put an "X" in the appropriate box to indicate if the normal balance of an account is a Debit or a Credit balance. The first account has been completed for you as an example.

Missy's Exotic Vacations, Inc., had the following transactions during its first month of operations: REQUIRED: 1. Journalize the entries. Omit the explanations. 2. Post the entries to the T-accounts. 3. Prepare a trial balance at the end of the month.

Which account has a normal debit balance?