Question 1

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-purchasing a building for cash

Accepted Answer

Purchasing a building for cash decreases the cash account (an asset) but increases the buildings account (also an asset), with no net effect on total assets.

Question 2

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-providing services to customers for cash

Accepted Answer

When a company provides services to customers for cash, the cash account increases because the company is receiving money. Therefore, the cash account would receive a debit entry to reflect this increase.

Question 3

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-paying salaries to employees

Accepted Answer

Paying salaries to employees decreases assets (cash) and decreases retained earnings due to the expense recognition.

Question 4

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-receiving cash from customers in advance for services to be provided next month

Accepted Answer

Receiving cash increases assets (cash), and because the service has not yet been provided, it also increases liabilities (unearned revenue), reflecting the obligation to provide services in the future.

Question 5

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-purchasing a six-month insurance policy

Accepted Answer

Purchasing a six-month insurance policy would result in a debit to Prepaid Insurance, as it represents a future benefit to the company.

Question 6

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-paying for a previous purchase on credit

Accepted Answer

Paying for a previous purchase on credit decreases assets (cash goes out) and decreases liabilities (accounts payable is reduced).

Question 7

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-borrowing cash from a bank

Accepted Answer

Borrowing cash from a bank increases assets (cash) and also increases liabilities (the loan payable).

Question 8

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-collecting from customers for services sold previously on credit

Accepted Answer

When collecting from customers for services sold previously on credit, the Cash account is debited to reflect the increase in cash.

Question 9

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-purchasing supplies on credit

Accepted Answer

When purchasing supplies on credit, the Supplies account is debited to record the increase in supplies. This is because the accounting equation must remain balanced, and the transaction increases assets (supplies) while also increasing liabilities (typically Accounts Payable, which would be credited in the same transaction).

Question 10

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-paying utilities

Accepted Answer

Utilities expense account would receive a debit entry when paying for utilities, as this represents an increase in expenses for the company.

Question 11

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-providing services for customers for credit

Accepted Answer

Providing services for customers on credit increases assets (accounts receivable) and increases retained earnings due to the revenue generated from the service.

Question 12

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-issuing common shares to investors

Accepted Answer

Issuing common shares to investors increases assets (cash or other assets received from investors) and increases contributed capital (equity), reflecting the inflow of resources in exchange for ownership interest.

Question 13

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-purchasing insurance

Accepted Answer

Purchasing insurance typically involves exchanging one asset (cash) for another asset (prepaid insurance), which impacts two asset accounts but does not change the total amount of assets.

Question 14

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-paying dividends

Accepted Answer

Paying dividends results in a debit to the Dividends account, reflecting a reduction in the company's retained earnings as it distributes profits to shareholders.

Question 15

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-receiving cash from a customer in advance of providing any services

Accepted Answer

When a company receives cash from a customer in advance of providing any services, the cash account is debited to reflect the increase in the company's cash balance.

Question 16

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-purchasing supplies on credit

Accepted Answer

Purchasing supplies on credit increases assets (supplies) and increases liabilities (accounts payable), with no immediate effect on equity.

Question 17

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-paying for items previously purchased on credit

Accepted Answer

When paying for items previously purchased on credit, the account that would receive a debit entry is Accounts Payable (G). This is because paying off the credit reduces the liability represented by Accounts Payable.

Question 18

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-paying salaries to employees

Accepted Answer

Salary Expense account would receive a debit entry when paying salaries to employees, as it increases the expense for the company.

Question 19

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-providing services for customers for cash

Accepted Answer

Providing services for customers for cash increases assets (cash) and increases retained earnings due to the revenue generated from the service.

Question 20

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.)
-providing services to customers for credit

Accepted Answer

When a company provides services to customers on credit, it increases its Accounts Receivable, reflecting the amount the customers owe the company for the services rendered.

Quiz 2: The Accounting Information System

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -purchasing a building for cash

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -providing services to customers for cash

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -paying salaries to employees

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -receiving cash from customers in advance for services to be provided next month

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -purchasing a six-month insurance policy

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -paying for a previous purchase on credit

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -borrowing cash from a bank

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -collecting from customers for services sold previously on credit

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -purchasing supplies on credit

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -paying utilities

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -providing services for customers for credit

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -issuing common shares to investors

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -purchasing insurance

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -paying dividends

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -receiving cash from a customer in advance of providing any services

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -purchasing supplies on credit

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -paying for items previously purchased on credit

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -paying salaries to employees

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) -providing services for customers for cash

For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) -providing services to customers for credit