Ch.3 Quiz

Instructions
Read the questions carefully.

This assessment is worth 100 points.

  1. Accounts are usually arranged in the ledger in financial statement order, that is, assets first, followed by liabilities, owner's equity, revenue, and expenses.   (4 points)

      
      

  2. The left-hand side of an account is used in recording debits, and the right-hand side for recording credits in both asset and liability accounts.   (4 points)

      
      

  3. If you have more debits than credits, that is always considered a positive situation.   (4 points)

      
      

  4. Increases in liability accounts are recorded by credits; increases in assets and in owner's equity are recorded by debits.   (4 points)

      
      

  5. A business that is profitable and solvent will have more accounts with credit balances than with debit balances.   (4 points)

      
      

  6. In accounting, the terms debit and credit indicate, respectively:   (4 points)

    a.  
    b.  
    c.  
    d.  

  7. In a ledger, debit entries cause:   (4 points)

    a.  
    b.  
    c.  
    d.  

  8. The rules of debit and credit may be summarized as follows:   (4 points)

    a.  
    b.  
    c.  
    d.  

  9. Which of the following accounting procedures requires the greatest knowledge of generally accepted accounting principles?   (4 points)

    a.  
    b.  
    c.  
    d.  

  10. The owner of Aztec Delivery Service wants to know if the business has sufficient cash to write a large check for new office equipment. Which accounting record will provide the most useful information?   (4 points)

    a.  
    b.  
    c.  
    d.  

  11. The purchase of office equipment on credit is recorded by a debit to Office Equipment and a credit to Accounts Receivable. If this error is not corrected, which of the following will occur?   (4 points)

    a.  
    b.  
    c.  
    d.  

  12. The wages earned by employees of Tycor, Inc., during the month of September will not be paid until Monday, October 3. The best rationale for recognizing these wages as expense in September is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  13. A journal entry to record revenue could include each of the following, except:   (4 points)

    a.  
    b.  
    c.  
    d.  

  14. A journal entry to recognize expense must include:   (4 points)

    a.  
    b.  
    c.  
    d.  

  15. Which accounts decrease owners' equity?   (4 points)

    a.  
    b.  
    c.  
    d.  

  16. Which statement is correct about debits?   (4 points)

    a.  
    b.  
    c.  
    d.  

  17. At the end of October, Two Harbors Marina received a bill for fuel used in October. Payment is not due until November 30. This transaction:   (4 points)

    a.  
    b.  
    c.  
    d.  

  18. Which of the following errors would require the least amount of work to locate and correct? (Hint: Consider the step in the accounting cycle in which the error was made.)   (4 points)

    a.  
    b.  
    c.  
    d.  

  19. The bookkeeper for Vanderbilt Mfg. made the following journal entry on January 30, 2000:


    Refer to the above data. Before the journal entry above, Vanderbilt had assets, liabilities, and owner's equity of $450,000, $100,000, and $350,000, respectively. What are total assets immediately after the above transaction occurs?   (4 points)

    a.  
    b.  
    c.  
    d.  

  20. TriTime, Inc. reports these account balances at December 31, 2000:




    On January 2, 2001, TriTime, Inc. collected $50,000 of its accounts receivable and paid $40,000 of its accounts payable. In a trial balance prepared at December 31, 2000, the total of the debit column is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  21. TriTime, Inc. reports these account balances at December 31, 2000:




    On January 2, 2001, TriTime, Inc. collected $50,000 of its accounts receivable and paid $40,000 of its accounts payable. In a trial balance prepared at January 3, 2001, the total of the debit column is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  22. Shown below are the accounts in a trial balance for Dolan Company, Inc. on January 31, after the first month of operations.




    The entry to close the Fees Earned account will:   (4 points)

    a.  
    b.  
    c.  
    d.  

  23. Accounts appearing in the May 31 trial balance of Lemar, Inc. are listed below:


    Net income for the month of May is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  24. Accounts appearing in the May 31 trial balance of Lemar, Inc. are listed below:


    What is the amount of owners' equity at May 31?   (4 points)

    a.  
    b.  
    c.  
    d.  

  25. Accounts appearing in the May 31 trial balance of Lemar, Inc. are listed below:


    Total assets at May 31 amount to:   (4 points)

    a.  
    b.  
    c.  
    d.  



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