Question 1

The accountant for Brumley Solutions, Inc. made the following errors while recording transactions for the period:
  Indicate whether or not the debit and credit columns of Brumley's trial balance will be equal after recording each of these erroneous entries. Then identify the account(s) that will be misstated as a result of these errors and the direction of the misstatement (i.e., understatement or overstatement).

Accepted Answer

The answer of The accountant for Brumley Solutions, Inc. made...

Question 2

A chart of accounts is:

Accepted Answer

A)   the same as a balance sheet.
B)   usually a listing of accounts in alphabetical order.
C)   usually a listing of accounts in financial statement order.
D)   used in place of a ledger.

Question 3

When the amount for a debit entry in a general journal is transferred to a specific account in the general ledger, it must be posted as a:

Accepted Answer

A)   debit to the account in the general ledger.
B)   credit to the account in the general ledger.
C)   total amount, without regard to debit or credit, since the general ledger accounts do not have spaces for debit and credit entries.
D)   decrease to the account in the general ledger.

Question 4

Which of the following will not cause a trial balance to be out of balance?

Accepted Answer

A)   The balance for the account is incorrectly computed.
B)   A debit entry is posted as a credit.
C)   A credit entry is posted to the wrong account, but still as a credit.
D)   An account is accidentally omitted from the trial balance.

Question 5

Lang Industries received payments from customers who had been billed earlier for services provided. What effect does this transaction have on Lang's accounting equation?

Accepted Answer

A)   Assets and liabilities increase.
B)   Assets and stockholders' equity increase.
C)   Assets and liabilities decrease.
D)   There is no net effect on the accounting equation, as one asset account increases while another asset account decreases.

Question 6

A(n) ____________________ is a list of each active account and its debit or credit balance at a specific point in time.

Accepted Answer

The answer of A(n) ____________________ is a list of each...

Question 7

Four journal entries are presented below. Write an explanation for each entry.

Accepted Answer

The answer of Four journal entries are presented below. Write...

Question 8

The payment of employee salaries has what effect on the accounting equation?

Accepted Answer

A)   Assets and stockholders' equity decrease
B)   Liabilities and stockholders' equity decrease
C)   Assets decrease and liabilities increase
D)   Assets increase and liabilities decrease

Question 9

Inferex Corporation
The following transactions were incurred by the Inferex Corporation during June 2012.
  Refer to the information presented for Inferex Corporation. Record each transaction in proper journal entry format in the journal provided. A written explanation for each journal entry is not required.

Accepted Answer

The answer of Inferex Corporation
The following transactions were incurred by...

Question 10

Which of the following accounts is increased by a credit entry?

Accepted Answer

A)   Accounts receivable
B)   Dividends
C)   Service revenue
D)   Salaries expense

Question 11

If the sum of the debits is not equal to the sum of the credits in a trial balance, then:

Accepted Answer

A)   there is no concern because the two amounts are not meant to be equal.
B)   the chart of accounts does not balance.
C)   it is safe to proceed with the preparation of financial statements.
D)   it is likely that an error was made in journalizing or posting transactions or in computing the account balance.

Question 12

A trial balance is a(n) :

Accepted Answer

A)   optional financial statement used only by creditors.
B)   tool used to prove the equality of debits and credits in the general ledger.
C)   list of accounts and their balances taken from the chart of accounts.
D)   financial statement which can be used in place of a balance sheet.

Question 13

Machinery is purchased on credit. What effect does this transaction have on the accounting equation?

Accepted Answer

A)   Assets and liabilities increase
B)   Assets and stockholders' equity increase
C)   Liabilities increase and stockholders' equity decreases
D)   Assets and liabilities decrease

Question 14

What statement below best describes an Accounting Information System?

Accepted Answer

A)   The system that identifies, records, summarizes, and communicates the various transactions of a company.
B)   It is built to capture and report the effects of a company's accounting transactions.
C)   Each system in an organization can vary widely, ranging from a manual system to a highly complex electronic system.
D)   All of the Above

Question 15

Dividends are declared and paid to the company's stockholders. What effect does this transaction have on the company's accounting equation?

Accepted Answer

A)   Assets and liabilities decrease
B)   Assets and retained earnings decrease
C)   Liabilities decrease and retained earnings increases
D)   Liabilities increase and contributed capital decreases

Question 16

Bravada Enterprises 
Transactions for Bravada Enterprises are provided below.

- Refer to the transactions that occurred at Bravada Enterprises. The journal entry to record the September 30th transaction will include a credit to:

Accepted Answer

A)   Salaries expense.
B)   Salaries payable.
C)   Prepaid salaries.
D)   Cash.

Question 17

Listed below are selected accounts from the financial statements of Ellison Company for the year ended December 31. In the blank spaces provided for each account, indicate what type of account it is, its normal balance, and the debit/credit rules for increasing and decreasing it. Use the following abbreviations for your answer:

Accepted Answer

The answer of Listed below are selected accounts from the...

Question 18

In which order are the accounts listed in the chart of accounts?

Accepted Answer

A)   Assets, expenses, liabilities, stockholders' equity, revenues
B)   Stockholders' equity, assets, liabilities, revenues, expenses
C)   Assets, liabilities, stockholders' equity, revenues, expenses
D)   Assets, liabilities, revenues, expenses, stockholders' equity

Question 19

Which of the following accounts is increased by a debit entry?

Accepted Answer

A)   Common stock
B)   Equipment
C)   Notes payable
D)   Service revenue

Question 20

Credits are always on the ____________________ side of a T-account.

Accepted Answer

The answer of Credits are always on the ____________________ side...

Exam 3: Recording Accounting Transactions

If the sum of the debits is not equal to the sum of the credits in a trial balance, then:

Correct Answer
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Credits are always on the ____________________ side of a T-account.

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When the amount for a debit entry in a general journal is transferred to a specific account in the general ledger, it must be posted as a:

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A chart of accounts is:

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A trial balance is a(n) :

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Lang Industries received payments from customers who had been billed earlier for services provided. What effect does this transaction have on Lang's accounting equation?

Correct Answer
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A(n) ____________________ is a list of each active account and its debit or credit balance at a specific point in time.

Correct Answer
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Which of the following accounts is increased by a credit entry?

Correct Answer
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Which of the following accounts is increased by a debit entry?

Correct Answer
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Machinery is purchased on credit. What effect does this transaction have on the accounting equation?

Correct Answer
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Which of the following will not cause a trial balance to be out of balance?

Correct Answer
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Bravada Enterprises Transactions for Bravada Enterprises are provided below. - Refer to the transactions that occurred at Bravada Enterprises. The journal entry to record the September 30th transaction will include a credit to:

Correct Answer
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What statement below best describes an Accounting Information System?

Correct Answer
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The payment of employee salaries has what effect on the accounting equation?

Correct Answer
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Four journal entries are presented below. Write an explanation for each entry.

Correct Answer
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In which order are the accounts listed in the chart of accounts?

Correct Answer
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Dividends are declared and paid to the company's stockholders. What effect does this transaction have on the company's accounting equation?

Correct Answer
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Exam 3: Recording Accounting Transactions

If the sum of the debits is not equal to the sum of the credits in a trial balance, then:

Correct AnswerverifiedShow Answer

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Credits are always on the ____________________ side of a T-account.

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When the amount for a debit entry in a general journal is transferred to a specific account in the general ledger, it must be posted as a:

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A chart of accounts is:

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A trial balance is a(n) :

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Lang Industries received payments from customers who had been billed earlier for services provided. What effect does this transaction have on Lang's accounting equation?

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A(n) ____________________ is a list of each active account and its debit or credit balance at a specific point in time.

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Which of the following accounts is increased by a credit entry?

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Which of the following accounts is increased by a debit entry?

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Machinery is purchased on credit. What effect does this transaction have on the accounting equation?

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Which of the following will not cause a trial balance to be out of balance?

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Bravada Enterprises Transactions for Bravada Enterprises are provided below. - Refer to the transactions that occurred at Bravada Enterprises. The journal entry to record the September 30th transaction will include a credit to:

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What statement below best describes an Accounting Information System?

Correct AnswerverifiedShow Answer

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The payment of employee salaries has what effect on the accounting equation?

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Four journal entries are presented below. Write an explanation for each entry.

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In which order are the accounts listed in the chart of accounts?

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Dividends are declared and paid to the company's stockholders. What effect does this transaction have on the company's accounting equation?

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