Question 1

When a company performs a service but has not yet received payment, it

Accepted Answer

A)   debits Service Revenue and credits Accounts Receivable.
B)   debits Accounts Receivable and credits Service Revenue.
C)   debits Service Revenue and credits Accounts Payable.
D)   makes no entry until cash is received.

Question 2

A debit to an account always indicates an increase in that account.

Accepted Answer

A) True 
 B)False

Question 3

For each of the following accounts indicate the effect of a debit or a credit on the account and the normal balance. Increase (+), Decrease (-).

Accepted Answer

The answer of For each of the following accounts indicate...

Question 4

If total assets are increased, there must be a corresponding increase in liabilities or a decrease in stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 5

This information relates to Hanshew Real Estate Agency.
Oct. 1 Stockholders invested $35,000 in exchange for common stock of the corporation.
2 Hires an administrative assistant at an annual salary of $36,000.
3 Buys equipment for $3,500 on account.
6 Sells a house and lot for M Springer; commissions due from Springer, $10,000 (not paid by Springer at this time).
10 Receives cash of $140 as commission for acting as rental agent renting an apartment.
27 Pays $700 on account for the equipment purchased on October 3.
30 Pays the administrative assistant $3,000 in salary for October.
Instructions
(a) Journalize the transactions. Do not provide explanations.
(b) Post the transactions to T accounts.

Accepted Answer

The answer of This information relates to Hanshew Real Estate...

Question 6

Powers Corporation received a cash advance of $500 from a customer. As a result of this event,

Accepted Answer

A)   assets increased by $500.
B)   equity increased by $500.
C)   liabilities decreased by $500.
D)   Both assets and equity increased by $500.

Question 7

Borrowing money and issuing shares of stock are

Accepted Answer

A)   operating activities.
B)   investing activities.
C)   financing activities.
D)   None of these answer choices are correct.

Question 8

Which of the following correctly identifies normal balances of accounts?

Accepted Answer

A)  
B)  
C)  
D)

Question 9

The chart of accounts is a special ledger used in accounting systems.

Accepted Answer

A) True 
 B)False

Question 10

The payment of a liability decreases both cash and accounts payable.

Accepted Answer

A) True 
 B)False

Question 11

A new account is opened for each transaction entered into by a business firm.

Accepted Answer

A) True 
 B)False

Question 12

A revenue account

Accepted Answer

A)   is increased by debits.
B)   is decreased by credits.
C)   has a normal balance of a debit.
D)   is increased by credits.

Question 13

The right side of an account

Accepted Answer

A)   is the correct side.
B)   reflects all transactions for the accounting period.
C)   shows all the balances of the accounts in the system.
D)   is the credit side.

Question 14

Unearned Service Revenue is classified as a liability on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 15

In its simplest form, an account consists of all of the following except

Accepted Answer

A)   right (credit)  side.
B)   account title.
C)   left side.
D)   explanation column.

Question 16

Under IFRS, the trial balance

Accepted Answer

A)   follow the same format as under GAAP.
B)   shows credits on the left and debits on the right.
C)   include less accounts than under GAAP.
D)   include more accounts than under GAAP.

Question 17

Debits

Accepted Answer

A)   increase both assets and liabilities.
B)   decrease both assets and liabilities.
C)   increase assets and decrease liabilities.
D)   decrease assets and increase liabilities.

Question 18

Which statement about an account is true?

Accepted Answer

A)   In its simplest form, an account consists of two parts.
B)   An account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items.
C)   There are separate account for specific assets and liabilities but only one account for stockholders' equity items.
D)   The left side of an account is the credit or decrease side.

Question 19

Eight transactions are recorded in the following T-accounts:  Indicate for each debit and each credit: (a) whether an asset, liability, common stock, dividends, revenue, or expense account was affected and (b) whether the account was increased (+) or (-) decreased. Answers should be presented in the following chart form:

Accepted Answer

The answer of Eight transactions are recorded in the following...

Question 20

Which of the following accounts follows the rules of debit and credit in relation to increases and decreases in the opposite manner?

Accepted Answer

A)   Prepaid Insurance and Dividends
B)   Dividends and Interest Revenue
C)   Interest Payable and Common Stock
D)   Advertising Expense and Land

Exam 3: The Accounting Information System

Correct Answer
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The right side of an account

Correct Answer
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Unearned Service Revenue is classified as a liability on the balance sheet.

Correct Answer
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Debits

Correct Answer
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Which statement about an account is true?

Correct Answer
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When a company performs a service but has not yet received payment, it

Correct Answer
verified

The payment of a liability decreases both cash and accounts payable.

Correct Answer
verified

Which of the following correctly identifies normal balances of accounts?

Correct Answer
verified

For each of the following accounts indicate the effect of a debit or a credit on the account and the normal balance. Increase (+), Decrease (-).

Correct Answer
verified

Under IFRS, the trial balance

Correct Answer
verified

A new account is opened for each transaction entered into by a business firm.

Correct Answer
verified

Powers Corporation received a cash advance of $500 from a customer. As a result of this event,

Correct Answer
verified

In its simplest form, an account consists of all of the following except

Correct Answer
verified

The chart of accounts is a special ledger used in accounting systems.

Correct Answer
verified

Which of the following accounts follows the rules of debit and credit in relation to increases and decreases in the opposite manner?

Correct Answer
verified

Borrowing money and issuing shares of stock are

Correct Answer
verified

Correct Answer
verified

A debit to an account always indicates an increase in that account.

Correct Answer
verified

A revenue account

Correct Answer
verified

If total assets are increased, there must be a corresponding increase in liabilities or a decrease in stockholders' equity.

Correct Answer
verified

Exam 3: The Accounting Information System

Correct AnswerverifiedShow Answer

The right side of an account

Correct AnswerverifiedShow Answer

Unearned Service Revenue is classified as a liability on the balance sheet.

Correct AnswerverifiedShow Answer

Debits

Correct AnswerverifiedShow Answer

Which statement about an account is true?

Correct AnswerverifiedShow Answer

When a company performs a service but has not yet received payment, it

Correct AnswerverifiedShow Answer

The payment of a liability decreases both cash and accounts payable.

Correct AnswerverifiedShow Answer

Which of the following correctly identifies normal balances of accounts?

Correct AnswerverifiedShow Answer

For each of the following accounts indicate the effect of a debit or a credit on the account and the normal balance. Increase (+), Decrease (-).

Correct AnswerverifiedShow Answer

Under IFRS, the trial balance

Correct AnswerverifiedShow Answer

A new account is opened for each transaction entered into by a business firm.

Correct AnswerverifiedShow Answer

Powers Corporation received a cash advance of $500 from a customer. As a result of this event,

Correct AnswerverifiedShow Answer

In its simplest form, an account consists of all of the following except

Correct AnswerverifiedShow Answer

The chart of accounts is a special ledger used in accounting systems.

Correct AnswerverifiedShow Answer

Which of the following accounts follows the rules of debit and credit in relation to increases and decreases in the opposite manner?

Correct AnswerverifiedShow Answer

Borrowing money and issuing shares of stock are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A debit to an account always indicates an increase in that account.

Correct AnswerverifiedShow Answer

A revenue account

Correct AnswerverifiedShow Answer

If total assets are increased, there must be a corresponding increase in liabilities or a decrease in stockholders' equity.

Correct AnswerverifiedShow Answer

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