Question 1

Given the following list of accounts with normal balances,what are the trial balance totals of the debits and credits?
$$\begin{array} { | l | r | } 
\hline \text { Cash } & \$ 1,000 \
\hline \text { Equipment } & 500 \
\hline \text { Accounts Payable } & 350 \
\hline \text { Capital } & 900 \
\hline \text { Service Fees Earned } & 1,000 \
\hline \text { Salaries Expense } & 750 \
\hline
\end{array}$$
A)$3,250 debit,$3,250 credit
B)$1,125 debit,$1,125 credit
C)$4,500 debit,$4,500 credit
D)$2,250 debit,$2,250 credit

Accepted Answer

The answer of Given the following list of accounts with...

Question 2

Which type of account would NOT be reported on the income statement?
A)Revenue
B)Expenses
C)Liabilities
D)None of these answers is correct.

Accepted Answer

Liabilities are balance sheet accounts and are not reported on the income statement. The income statement only reports revenue and expenses to determine net income or net loss.

Question 3

Which of the following is prepared last?
A)Balance Sheet
B)Income Statement
C)Statement of Owner's Equity
D)Trial Balance

Accepted Answer

The balance sheet is prepared last as it requires information from both the income statement and statement of owner's equity. A trial balance is usually prepared first to ensure that the debits and credits of the accounting system are in balance. The income statement and statement of owner's equity are prepared next, with the balance sheet being the final statement to be prepared.

Question 4

A list of all the accounts from the ledger with their ending balances is called a:
A)normal balance.
B)trial balance.
C)chart of accounts.
D)bank statement.

Accepted Answer

A list of all the accounts from the ledger with their ending balances is called a trial balance. The other options, normal balance is a term used to describe the balance of an account type (debit or credit), chart of accounts is a list of all accounts used by a company, and a bank statement is a document provided by a bank that shows transactions and balances in a bank account.

Question 5

On which financial statement would you find the ending balance in the Capital account?
A)Income Statement
B)Balance Sheet
C)Statement of Owner's Equity
D)Both B and C are correct.

Accepted Answer

The ending balance in the Capital account is found on both the Balance Sheet and the Statement of Owner's Equity. The Balance Sheet shows the company's financial position at a point in time, including owner's equity, while the Statement of Owner's Equity details changes in equity, including the ending capital balance.

Question 6

The left column of a financial statement is often used to:
A)show debits.
B)show credits.
C)show totals.
D)subtotal numbers.

Accepted Answer

The answer of The left column of a financial statement...

Question 7

Accounts Payable appears on the income statement.

Accepted Answer

Accounts Payable does not appear on the income statement. It is a liability on the balance sheet that represents money owed by the company to its suppliers or vendors.

Question 8

The income statement is a financial statement.

Accepted Answer

The income statement is a financial statement that reports a company's revenues and expenses over a specific period of time, usually a quarter or a year. It is also known as the profit and loss statement or statement of operations.

Question 9

Which type of account would NOT be reported on the balance sheet?
A)Expense
B)Cash
C)Accounts Payable
D)Equipment

Accepted Answer

Expenses are not reported on the balance sheet, they are reported on the income statement. The balance sheet only shows assets, liabilities, and equity accounts.

Question 10

Given the following list of accounts with normal balances,what are the trial balance totals of the debits and credits?
$$\begin{array} { | l | r | } 
\hline \text { Cash } & \$ 1,100 \
\hline \text { Accounts Receivable } & 800 \
\hline \text { Capital } & 1,900 \
\hline \text { Accounts Payable } & 500 \
\hline \text { Service Fees Earned } & 1,000 \
\hline \text { Rent Expense } & 1,500 \
\hline
\end{array}$$
A)$3400 debit,$3400 credit
B)$3,900 debit,$3,900 credit
C)$2,000 debit,$2,000 credit
D)$1,200 debit,$1,200 credit

Accepted Answer

The debits are Cash ($1,100), Accounts Receivable ($800), and Rent Expense ($1,500), totaling $3,400. The credits are Capital ($1,900), Accounts Payable ($500), and Service Fees Earned ($1,000), also totaling $3,400.

Question 11

Determine the ending owner's equity of a business having a beginning owner's equity of $8,500,additional investments of $600,withdrawals of $1,000,and net income of $1,200.
$ ________

Accepted Answer

The answer of Determine the ending owner's equity of a...

Question 12

The beginning balance in the Capital account would appear on which financial statement?
A)Statement of Owner's Equity
B)Balance Sheet
C)Income Statement
D)None of these answers is correct.

Accepted Answer

The Capital account is a component of owner's equity, which is reported on the Statement of Owner's Equity. Therefore, the beginning balance in the Capital account would appear on the Statement of Owner's Equity.

Question 13

The income statement contains:
A)liabilities.
B)revenues.
C)assets.
D)Both B and C are correct.

Accepted Answer

The income statement reflects the revenues generated by a company during a specific period of time. Hence, the income statement contains revenues, but not liabilities or assets. Therefore, option B is the correct answer.

Question 14

Net income or net loss for a period is calculated by the following formula:
A)total revenues - total liabilities.
B)total revenues - total expenses - total withdrawals + assets.
C)total revenues - total expenses.
D)total revenues - total expenses + capital.

Accepted Answer

Net income or net loss is calculated by deducting total expenses from total revenues. Option C provides the correct formula for calculating the net income or net loss of a business.

Question 15

What is X-cel Company's net income or net loss if it had Revenue of $1,800,Salary Expense of $500,Utility Expense of $250,and Withdrawals of $5,000 during October?
A)$50 net income
B)$1,050 net loss
C)$1,050 net income
D)$50 net loss

Accepted Answer

The answer of What is X-cel Company's net income or...

Question 16

Which of the following is prepared first?
A)Balance sheet
B)Income statement
C)Statement of owner's equity
D)Trial balance

Accepted Answer

A trial balance is prepared first as it ensures that debits and credits are balanced before preparing financial statements such as income statement, statement of owner's equity, and balance sheet.

Question 17

Withdrawals and expenses are reported on the income statement.

Accepted Answer

Withdrawals are distributions to owners and are not reported on the income statement; expenses are reported on the income statement as they are costs incurred in the process of earning revenue.

Question 18

The financial statements contain debit and credit columns.

Accepted Answer

Financial statements consist of the balance sheet, income statement, and cash flow statement, which do not use debit and credit columns; these columns are used in the journals and ledgers where transactions are initially recorded.

Question 19

Prepaid expense would appear on which financial statement?
A)Balance Sheet
B)Income Statement
C)Owner's Equity Statement
D)None of these answers is correct.

Accepted Answer

Prepaid expenses are assets and are reported on the balance sheet.

Question 20

Wages Expense appears on the balance sheet.

Accepted Answer

Wages Expense is an income statement account, and therefore does not appear on the balance sheet.

Quiz 2: Debits and Credits: Analyzing and Recording Business Transactions

Which type of account would NOT be reported on the income statement?

Which of the following is prepared last?

A list of all the accounts from the ledger with their ending balances is called a:

On which financial statement would you find the ending balance in the Capital account?

The left column of a financial statement is often used to:

Accounts Payable appears on the income statement.

The income statement is a financial statement.

Which type of account would NOT be reported on the balance sheet?

Determine the ending owner's equity of a business having a beginning owner's equity of $8,500,additional investments of $600,withdrawals of $1,000,and net income of $1,200. $ ________

The beginning balance in the Capital account would appear on which financial statement?

The income statement contains:

Net income or net loss for a period is calculated by the following formula:

What is X-cel Company's net income or net loss if it had Revenue of $1,800,Salary Expense of $500,Utility Expense of $250,and Withdrawals of $5,000 during October?

Which of the following is prepared first?

Withdrawals and expenses are reported on the income statement.

The financial statements contain debit and credit columns.

Prepaid expense would appear on which financial statement?

Wages Expense appears on the balance sheet.