Practice Questions
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
Help!
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| show | true
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| show | false
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| show | true
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| T/F Expenses have the effect of decreasing owner's equity | show 🗑
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| T/F The amounts owed by charge customers are recorded in the Accounts Receivable account | show 🗑
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| T/F Withdrawals by the owner decrease owner's equity | show 🗑
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| show | true
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| T/F An accountant keeps a separate record for each asset, liability, owner's equity, revenue, and expense account | show 🗑
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| A one-owner business is called a(n): | show 🗑
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| Debts owed by a business are called: | show 🗑
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| A person or business to whom money is owed is called a(n): | show 🗑
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| show | accounts
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| An event affecting a business that can be expressed in terms of money and that must be recorded in the accounting records is called a(n): | show 🗑
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| The owner's investment or equity in an enterprise is called: | show 🗑
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| The equation expressing the relationship of assets. liabilities, and owner's equity is called the: | show 🗑
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| show | chart of accounts
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| _______ represents the amount a business charges a customer for a service performed | show 🗑
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| If the owner takes cash out of the business each month, this is called a(n): | show 🗑
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| show | accounts receivable
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| _____ are the costs related to the earning of revenue | show 🗑
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| show | credit
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| show | credit
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| show | debit
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| An account designed to accumulate totals to offset a related account | show 🗑
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| show | general journal
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| The amount by which total assets exceed total liabilities | show 🗑
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| Which of the following is an asset? a. account payable b. drawing account c. prepaid insurance d. supplies expense e. accumulated depreciation, equipment | show 🗑
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| show | general ledger
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| An error resulting in debits not being equal to credits would be found where? | show 🗑
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| A debit: a. decreases cash b. decreases revenues c. increases owner's equity d. decreases drawing e. increases liabilities | show 🗑
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| The amount of difference between the total debits and the total credits to an account is called a: a. ruling b. footing c. trial balance d. balance e. none of these | show 🗑
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| show | owner's equity account
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| Examples of expenses are: a. wages b. rent c. advertising d. utilities e. all of these | show 🗑
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| show | decreases with increased expenses
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| Ernst Elf pays his company's bill for two years of insurance coverage. The transaction: a. increases the drawing account and decreases an asset account b. includes a debit to the cash account c. decreases one asset account and increases another asset acct | show 🗑
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| show | always balance
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| show | increases an asset
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| The fact that each transaction has a dual effect on the accounting elements provides the basis for what is called: | show 🗑
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| show | all
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| show | an increase in a revenue account
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| Payment of liability will: a. decrease total assets & total liabilities b. decrease total liabilities & total owner's equity c. decrease total assets & increase total liabilities d. increase total liabilities & owner's equity e. | show 🗑
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| show | 100,000
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| A business firm received $900 cash from charge customers to apply on account. The effect of the transaction on the accounting equation is: a. increase asset, decrease liability b. increase asset, decrease capital c. increase asset, decrease asset | show 🗑
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| Which of the following in NOT a proper form of the fundamental accounting equation: a. assets-liabilities=owner's equity b. assets-owner's equity=liabilities c. assets=liabilities+owner's equity d. assets+liabilities=owner's equity | show 🗑
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| show | expenses
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| Which has debit balances? a. assets b. drawing c. expenses d. all of these e. none of these | show 🗑
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| A trial balance is a listing of all the: a. assets owned by a business b. accounts in the ledger that have balances c. debts owed by a business d. lawsuits of a business in progress | show 🗑
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| A business paper that serves as a record of a transaction is called: a. trail balance b. ledger account c. source document d. journal | show 🗑
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| show | financial position of a business on a specific date
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| show | accrual basis
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| The process of transferring entries in the journal to the ledger is called: a. debiting b. posting c. working d. crediting e. balancing | show 🗑
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| Property of a relatively permanent nature used in the operation of a business and not intended for resale: a. current liability b. fixed asset c. owner's equity d. long term liability d. current asset | show 🗑
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| Person who agrees to perform a service for a fee and who is not subject to the control of those for whom the service is performed: a. employee b. bookkeeper c. manager d. independent stockholder | show 🗑
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| Prepaid insurance should be classified on the: a. balance sheet as current liability b. balance sheet as long-term liability c. balance sheet as current asset d. balance sheet as fixed asset e. income statement as expense | show 🗑
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| show | contra account
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| The "book of original entry" is the: a. general journal b. general ledger c. worksheet d. chart of accounts | show 🗑
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| show | capital
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| show | prepaid insurance
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| show | general ledger
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| show | trial balance
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| show | double entry accounting
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| show | increase in revenue
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| Which of the following accounts would not get adjusted at the end of the fiscal period? a. accounts receivable b. supplies c. depreciation expense d. wages expense e. prepaid insurance | show 🗑
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| Which of the following accounts would not get closed at the end of the fiscal period? a. drawing b. income from services c. wages expense d. equipment e. advertising expense | show 🗑
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| show | advertising expense
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| show | advertising expense
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| The cost of a fixed asset less its accumulated depreciation: a. cost b. book value c. market value d. true value | show 🗑
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| show | post-closing trial balance
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| show | asset
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| The type of account and normal balance of accumulated depreciation: a. contra, credit b. contra, debit c. asset, debit d. asset, credit e. expense, debit | show 🗑
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| A formal statement of the results of the operations of a business during an accounting period is called a(n): a. statement of changes b. balance sheet c. statement of condition d. income statement | show 🗑
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| In a multiple step income statement, operating expenses are subtracted from gross profit to compute: a. income from operations b. net income c. other income d. net loss | show 🗑
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| show | gross profit
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| Accumulated depreciation amounts are shown as deductions from the: a. cost of building & equipment accounts b. accounts receivable c. accounts payable d. prepaid insurance account | show 🗑
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| A formal statement of assets, liabilities & owner's equity at a specified date is known as the: | show 🗑
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| Cash & all other assets that may be reasonably expected to be converted to cash or consumed within one year or the normal operating cycle of a business are classified as: | show 🗑
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| Assets that are used for several years in the operation of a business are called: | show 🗑
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| Those obligations that are due within one year or the normal operating cycle of a business and will be paid with money provided by the current assets are called: | show 🗑
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| show | current ratio
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| show | increase an asset, increase owner's equity
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| Increase/Decrease which accounts: payment of rent | show 🗑
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| show | increase an asset, increase revenue
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| show | increase an asset, increase owner's equity
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| Increase/Decrease which accounts: payment of insurance premium for two years | show 🗑
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| Increase/Decrease which accounts: payment of wages | show 🗑
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| show | increase an asset, increase revenue
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| Increase/Decrease which accounts: withdrawal of cash by owner | show 🗑
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| Increase/Decrease which accounts: purchase of supplies on account | show 🗑
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| show | increase an asset, decrease an asset
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| Increase/Decrease which accounts: payment made to creditor on account | show 🗑
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| show | debit cash, credit capital
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| show | debit cash, credit revenue
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| show | debit rent expense, credit cash
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| show | debit equipment, credit accounts payable
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| Debit & Credit which accounts: paid cash to a creditor for a debt previously owed | show 🗑
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| show | debit phone expense, credit cash
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Created by:
leahmurphy
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