Exam 2: Financial Statements and the Accounting System

A) The total of the credit side of the account.
B) The total of the debit side of the account.
C) The difference between the total debits and total credits for an account including the beginning balance.
D) Assets = liabilities + equity.
E) Always a credit.

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) Debit Assets $200,000; credit Common Stock,$200,000.
B) Debit Cash and Land,$200,000; credit Common Stock,$200,000.
C) Debit Cash $70,000; debit Land $130,000; credit Common Stock,$200,000.
D) Debit Common Stock,$200,000; credit Cash $70,000,credit Land,$130,000.
E) Debit Common Stock,$200,000; credit Assets,$200,000.

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) $\begin{array}{|l|r|r|}\hline \text { Cash } & 10,000 & \\\hline \text { Common Stock } & & 30,000 \\\hline\end{array}$
B) $\begin{array}{|l|r|r|}\hline \text { Common Stock } & 30,000 & \\\hline \text { Cash } & & 10,000 \\\hline \text { Building } & & 20,000 \\\hline\end{array}$
C) $\begin{array}{|l|r|l|}\hline \text { Cash } & 10,000 & \\\hline \text { Building } & 20,000 & \\\hline \text { Common Stock } & & 30,000 \\\hline\end{array}$
D) $\begin{array}{|l|r|r|}\hline \text { Owner's Investments } & 30,000 & \\\hline \text { Common Stock } & & 30,000 \\\hline\end{array}$
E) $\begin{array}{|l|r|r|}\hline \text { Cash \& Building } & 30,000 & \\\hline \text { Common Stock } & & 30,000 \\\hline\end{array}$

Correct Answer

verified

Show Answer

A) If the trial balance is in balance,it proves that no errors have been made in recording and posting transactions.
B) The trial balance is a book of original entry.
C) Another name for the trial balance is the chart of accounts.
D) The trial balance is a list of all accounts from the ledger with their balances at a point in time.
E) The trial balance is another name for the balance sheet as long as debits balance with credits.

Correct Answer

verified

Show Answer

Correct Answer

verified

The trial balance is a list of all of th...

View Answer

Show Answer

A) Income statement.
B) Balance sheet.
C) Statement of retained earnings.
D) Cash flow statement.
E) Trial balance.

Correct Answer

verified

Show Answer

A) $150 understated.
B) $135 overstated.
C) $150 overstated.
D) $15 understated.
E) $135 understated.

Correct Answer

verified

Show Answer

A) A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash.
B) The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and $2,350 credit to Accounts Payable.
C) A $50 cash receipt for the performance of a service was not recorded at all.
D) The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200.
E) The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750.

Correct Answer

verified

Show Answer

A) Dividends account.
B) Common Stock account.
C) Asset account.
D) T-account.
E) Balance column sheet.

Correct Answer

verified

Show Answer

A) $\begin{array}{|l|r|r|}\hline \text { Design Revenue } & 100 & \\\hline \text { Consulting Revenue } & 800 & \\\hline \text { Accounts Receivable } & & 900 \\\hline\end{array}$
B) $\begin{array}{|l|r|r|}\hline \text { Accounts Payable } & 800 & \\\hline \text { Design Revenue } & & 100 \\\hline \text { Consulting Revenue } & & 800 \\\hline\end{array}$
C) $\begin{array}{|l|r|r|}\hline \text { Consulting Revenue } & 800 & \\\hline \text { Design Revenue } & 100 & \\\hline \text { Cash } & & 900 \\\hline\end{array}$
D) $\begin{array}{|l|r|r|}\hline \text { Cash } & 900 & \\\hline \text { Consulting Revenue } & & 800 \\\hline \text { Design Revenue } & & 100 \\\hline\end{array}$
E) $\begin{array}{|l|r|r|}\hline \text { Accounts Receivable } & 900 & \\\hline \text { Consulting Revenue } & & 800 \\\hline \text { Design Revenue } & & 100 \\\hline\end{array}$

Correct Answer

verified

Show Answer

A) An increase in an expense account.
B) A decrease in an asset account.
C) A decrease in an unearned revenue account.
D) A decrease in a revenue account.
E) A decrease in a common stock account.

Correct Answer

verified

Show Answer

A) $\begin{array}{|l|r|r|}\hline \text { Rental Revenue } & 100 & \\\hline \text { Instruction Revenue } & 150 & \\\hline \text { Cash } & & 250 \\\hline\end{array}$
B) $\begin{array}{|l|r|r|}\hline \text { Accounts Payable } & 250 & \\\hline \text { Rental Revenue } & & 100 \\\hline \text { Instruction Revenue } & & 150 \\\hline\end{array}$
C) $\begin{array}{|l|r|r|}\hline \text { Cash } & 250 & \\\hline \text { Rental Revenue } & & 100 \\\hline \text { Instruction Revenue } & & 150 \\\hline\end{array}$
D) $\begin{array}{|l|r|r|}\hline \text { Accounts Receivable } & 250 & \\\hline \text { Rental Revenue } & & 100 \\\hline \text { Instruction Revenue } & & 150 \\\hline\end{array}$
E) $\begin{array}{|l|r|r|}\hline \text { Unearned Revenue } & 250 & \\\hline \text { Rental Revenue } & & 100 \\\hline \text { Instruction Revenue } & & 150 \\\hline\end{array}$

Correct Answer

verified

Show Answer