Question 1

An account is a form or record used to keep track of the increases or decreases in the individual assets, liabilities, owner's equity, revenues, and expenses of a business entity.

Accepted Answer

A) True 
 B)False

Question 2

The owner's capital account normally has a credit balance.

Accepted Answer

A) True 
 B)False

Question 3

A T account has three parts: the title, the debit side, and the credit side.

Accepted Answer

A) True 
 B)False

Question 4

The drawing account should be used to show

Accepted Answer

A)   the amount the owner has invested in the business.
B)   the amount the owner has taken out of the business.
C)   the amount the business has earned.
D)   the amount the business has spent.

Question 5

Payment of rent on account decreases the Cash account.

Accepted Answer

A) True 
 B)False

Question 6

Match the terms with the definitions.
-The normal balance of liability, owner's equity, and revenue accounts.

Accepted Answer

A)  balance
B)  credit
C)  credit balance
D)  debit
E)  debit balanceF) double-entry accountingG) footingsH) normal balanceI) T accountJ) trial balance

Question 7

A trial balance is a list of all accounts showing the title and balance of each account.

Accepted Answer

A) True 
 B)False

Question 8

A debit represents an increase in

Accepted Answer

A)   an asset.
B)   a liability.
C)   owner's equity.
D)   revenues. A

Question 9

Mandy withdraws $600 from her business. This transaction increases cash but decreases owner's equity.

Accepted Answer

A) True 
 B)False  False

Question 10

A credit increases liabilities and owner's equity.

Accepted Answer

A) True 
 B)False

Question 11

The balance sheet

Accepted Answer

A)   is a list of all accounts showing the title and balance of each account.
B)   is used as an aid in preparing the trial balance and income statement.
C)   is for a period of time.
D)   shows that assets equal liabilities plus owner's equity. D

Question 12

When services are performed for which payment will be received later, accounts receivable increases.

Accepted Answer

A) True 
 B)False

Question 13

Prepaid insurance and supplies are assets because they will provide benefits for more than one month.

Accepted Answer

A) True 
 B)False

Question 14

Match the terms with the definitions.
-A system in which each transaction has a dual effect on the accounting elements.

Accepted Answer

A)  balance
B)  credit
C)  credit balance
D)  debit
E)  debit balanceF) double-entry accountingG) footingsH) normal balanceI) T accountJ) trial balance

Question 15

A debit

Accepted Answer

A)   is on the left side.
B)   decreases assets.
C)   increases liabilities.
D)   increases owner's equity.

Question 16

Falana receives payment for services performed in the amount of $3,147. This transaction

Accepted Answer

A)   decreases Wage Expense.
B)   increases Cash.
C)   increases owner's equity.
D)   decreases Cash.

Question 17

Asset and expense accounts normally have

Accepted Answer

A)   credit balances.
B)   large balances.
C)   debit balances.
D)   negative balances.

Question 18

Footings in T accounts

Accepted Answer

A)   appear to the left of the amount columns.
B)   are used for accounts with more than one debit or credit.
C)   are only used in asset accounts.
D)   are used for accounts with only one entry.

Question 19

Kate made a $475 payment on her company van. She should credit Accounts Payable and debit the automobile account.

Accepted Answer

A) True 
 B)False

Question 20

Increases are entered on the credit side of a(n)

Accepted Answer

A)   asset account.
B)   liability account.
C)   expense account.
D)   drawing account.

Exam 3: The Double-Entry Framework

An account is a form or record used to keep track of the increases or decreases in the individual assets, liabilities, owner's equity, revenues, and expenses of a business entity.

Correct AnswerverifiedShow Answer

The owner's capital account normally has a credit balance.

Correct AnswerverifiedShow Answer

A T account has three parts: the title, the debit side, and the credit side.

Correct AnswerverifiedShow Answer

The drawing account should be used to show

Correct AnswerverifiedShow Answer

Payment of rent on account decreases the Cash account.

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -The normal balance of liability, owner's equity, and revenue accounts.

Correct AnswerverifiedShow Answer

A trial balance is a list of all accounts showing the title and balance of each account.

Correct AnswerverifiedShow Answer

A debit represents an increase in

Correct AnswerverifiedA

Mandy withdraws $600 from her business. This transaction increases cash but decreases owner's equity.

Correct AnswerverifiedFalse

A credit increases liabilities and owner's equity.

Correct AnswerverifiedShow Answer

The balance sheet

Correct AnswerverifiedD

When services are performed for which payment will be received later, accounts receivable increases.

Correct AnswerverifiedShow Answer

Prepaid insurance and supplies are assets because they will provide benefits for more than one month.

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -A system in which each transaction has a dual effect on the accounting elements.

Correct AnswerverifiedShow Answer

A debit

Correct AnswerverifiedShow Answer

Falana receives payment for services performed in the amount of $3,147. This transaction

Correct AnswerverifiedShow Answer

Asset and expense accounts normally have

Correct AnswerverifiedShow Answer

Footings in T accounts

Correct AnswerverifiedShow Answer

Kate made a $475 payment on her company van. She should credit Accounts Payable and debit the automobile account.

Correct AnswerverifiedShow Answer

Increases are entered on the credit side of a(n)

Correct AnswerverifiedShow Answer

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False

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D

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