Question 1

Match the terms with the definitions.
-A list of accounts, showing the title and balance of each account, used to prove that the debit balances equal the credit balances.

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 2

An increase or decrease in any asset, liability, owner's equity, revenue, or expense is always accompanied by an offsetting change within the basic accounting elements.

Accepted Answer

A) True 
 B)False

Question 3

Expense accounts normally have debit balances.

Accepted Answer

A) True 
 B)False

Question 4

A purchase of an asset on account

Accepted Answer

A)   increases cash.
B)   decreases owner's equity.
C)   increases assets.
D)   decreases expenses.

Question 5

Services on account increase a revenue account and increase the cash account.

Accepted Answer

A) True 
 B)False

Question 6

The purchase of a supply of markers for three months should be recorded as an increase in revenue and a decrease in cash.

Accepted Answer

A) True 
 B)False

Question 7

An example of an expense is

Accepted Answer

A)   prepaid insurance.
B)   advertising.
C)   accounts payable.
D)   cash.

Question 8

Accounts that affect owner's equity are

Accepted Answer

A)   assets, capital, and revenue.
B)   capital, liabilities, and expenses.
C)   expenses, capital, and revenue.
D)   drawing, assets, and liabilities.

Question 9

Payment of office rent represents a decrease in

Accepted Answer

A)   a liability account.
B)   expenses.
C)   cash.
D)   a revenue account.

Question 10

An increase in an asset account may be offset by a(n)

Accepted Answer

A)   decrease in a liability account.
B)   increase in an expense account.
C)   increase in owner's equity.
D)   decrease in owner's equity.

Question 11

A trial balance is taken periodically to check the equality of the debits and credits.

Accepted Answer

A) True 
 B)False

Question 12

The capital account

Accepted Answer

A)   decreases with increased revenue.
B)   increases with increased expenses.
C)   has a normal balance of a debit.
D)   increases when the owner invests money in the business.

Question 13

To debit an account is to enter an amount on the left side of the account.

Accepted Answer

A) True 
 B)False

Question 14

Match the terms with the definitions.
-The total dollar amounts on the debit and credit sides of an account.

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

If services for the month total $3,300 in cash and $700 on account, Accounts Receivable increases $700.

Accepted Answer

A) True 
 B)False

Question 16

Revenues decrease owner's equity.

Accepted Answer

A) True 
 B)False

Question 17

Equity accounts normally have debit balances.

Accepted Answer

A) True 
 B)False

Question 18

Payment of a telephone bill represents an increase in a(n)

Accepted Answer

A)   asset.
B)   liability.
C)   revenue.
D)   expense.

Question 19

The purchase of an asset on account and making a partial payment results in all of the following EXCEPT

Accepted Answer

A)   an increase in an asset account.
B)   a decrease in the Cash account.
C)   a balanced accounting equation.
D)   an increase in owner's equity.

Question 20

A credit

Accepted Answer

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

Exam 3: The Double-Entry Framework

A purchase of an asset on account

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To debit an account is to enter an amount on the left side of the account.

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An example of an expense is

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If services for the month total $3,300 in cash and $700 on account, Accounts Receivable increases $700.

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An increase in an asset account may be offset by a(n)

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Revenues decrease owner's equity.

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The purchase of an asset on account and making a partial payment results in all of the following EXCEPT

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Expense accounts normally have debit balances.

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Services on account increase a revenue account and increase the cash account.

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An increase or decrease in any asset, liability, owner's equity, revenue, or expense is always accompanied by an offsetting change within the basic accounting elements.

Correct AnswerverifiedShow Answer

Payment of a telephone bill represents an increase in a(n)

Correct AnswerverifiedShow Answer

A trial balance is taken periodically to check the equality of the debits and credits.

Correct AnswerverifiedShow Answer

The purchase of a supply of markers for three months should be recorded as an increase in revenue and a decrease in cash.

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -The total dollar amounts on the debit and credit sides of an account.

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Equity accounts normally have debit balances.

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Match the terms with the definitions. -A list of accounts, showing the title and balance of each account, used to prove that the debit balances equal the credit balances.

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Accounts that affect owner's equity are

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Payment of office rent represents a decrease in

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The capital account

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A credit

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