Question 1

With respect to double entry accounting systems, which of the following statements is true?

Accepted Answer

A)   When recording a single transaction we would only debit one account and credit one account.
B)   When recording a single transaction, if an asset account is debited we would have to credit a liability account or the owners equity account.
C)   In a particular accounting period, the total dollar value of the debit entries should equal the total dollar value of the credit entries.
D)   A gift made to a business would not be recorded, as the double entry accounting system was not designed to record gifts.
E)   None of the statements are true. C

Question 2

In the current year the Budget Hotel earned $60,000 profit. Its assets increased by $120,000 and its liabilities increased by $40,000. What was the value of the owners' capital contribution or dividend received during the year?

Accepted Answer

A)   Dividend of $20,000.
B)   Contribution of $20,000.
C)   Dividend of $10,000.
D)   Contribution of $10,000.
E)   None of the above. B

Question 3

With respect to double entry accounting systems, which of the following statements is true?

Accepted Answer

A)   When recording a transaction, at least one account is debited and at least one account is credited.
B)   The accounting equation should remain intact.
C)   The total of the debit balances on general ledger accounts should equal the total of the credit balances on general ledger accounts.
D)   Gifts are ignored as there is no double entry.
E)   Statements A, B and C are true.

Question 4

In a hotel, which of the following is not normally treated as a current asset?

Accepted Answer

A)   Prepaid insurance.
B)   Staff uniforms.
C)   Money held in a bank account.
D)   Beer held in bar fridge.
E)   Petty cash balance held in a locked tin box and managed by the hotel's office manager.

Question 5

On 1st of March an event operator purchased a sound system for $60,000. The event operator
Paid a deposit of $6,000 in cash and financed the balance with a bank loan. Which of the following is the accounting entry to record the 1st March transaction?

Accepted Answer

A)   Debit equipment $6,000, credit cash $6,000.
B)   Debit equipment $60,000, credit cash $60,000
C)   Debit equipment $60,000, credit cash $6,000, credit accounts payable $54,000.
D)   Debit equipment $60,000, credit cash $6,000, credit bank loan $54,000.
E)   None of the above. D

Question 6

Which accounts normally have credit balances?

Accepted Answer

A)   Assets, expenses and retained earnings.
B)   Liabilities, owners equity and expenses.
C)   Liabilities, owners equity, and retained earnings.
D)   Revenue, assets and retained earnings.
E)   Revenue, dividends, and liabilities.

Question 7

In its most recent financial year, Gold Coast Events earned $120,000 profit. Its assets increased by $170,000 and its liabilities increased by $70,000. What was the value of the owners' capital contribution or dividend paid during the year?

Accepted Answer

A)   $20,000 dividend paid.
B)   Contribution of $20,000.
C)   $10,000 dividend paid.
D)   Contribution of $10,000.
E)   None of the above.

Question 8

A revenue account:

Accepted Answer

A)   Is increased by debit entries.
B)   Is decreased by credit entries.
C)   Normally has a debit balance.
D)   Is increased by credit entries.
E)   Usually has more debit entries than credit entries.

Question 9

When a hotel pays off a bank loan, in its books it:

Accepted Answer

A)   Debits expenses and credits cash
B)   Debits cash and credits owner's equity
C)   Debits loan payable and credits cash
D)   Debits cash and credits loan payable
E)   None of the above

Question 10

A hotel sold four cases of wine at a conference function for $2,160 cash. The four cases cost the hotel $1,000. The set of accounting entries to record this transaction would include which of the following:

Accepted Answer

A)   Credit wine revenue account $1,000; Debit cash $2,160.
B)   Credit cost of goods sold $1,000; Debit cash $2,160.
C)   Debit cost of goods sold $2,160; Credit cash $2,160.
D)   Credit wine revenue account $2,160; Credit wine inventory $2,160.
E)   Credit wine revenue account $2,160; Credit wine inventory account $1,000.

Question 11

In the current year Ms B. Seen operated Main Events. The business earned $50,000 profit for the year. Its assets increased by $100,000 and its liabilities increased by $30,000. What was the net amount of the capital contributions or drawings taken by Ms Seen during the year?

Accepted Answer

A)   Contributions of $20,000
B)   Drawings of $20,000
C)   Drawings of $80,000
D)   Contribution of $80,000
E)   None of the above

Question 12

In double entry accounting:

Accepted Answer

A)   With respect to balance sheet accounts: asset accounts normally have a debit balance, liability and owners' equity accounts normally have a credit balance.
B)   With respect to profit and loss accounts: revenue accounts have a credit balance, expense accounts have a debit balance.
C)   For every set of debit entries, there must be a set of credit entries with the same monetary value.
D)   Where there is a cash inflow we debit the cash account. For a cash outflow, we credit the cash account.
E)   All of the above statements are true.

Question 13

Which of the following statements about journal entries is false?

Accepted Answer

A)   The general journal only refers to asset, liability and owners equity accounts.
B)   The general journal provides a complete record of each transaction.
C)   The general journal provides a chronological record of transactions.
D)   The general journal often records the number of each account affected by transactions.
E)   The general journal can assist in the location of accounting errors.

Question 14

For the current financial year, a tour operating company had $270,000 in its retained earnings account at the beginning of the year. During the year it earned $60,000 in profit and paid $12,000 in dividends to its owners. The balance sheet at the end of the current financial year should reflect a retained earnings balance of:

Accepted Answer

A)   $318,000.
B)   $258,000.
C)   $330,000.
D)   $48,000.
E)   $60,000.

Question 15

A hotel's junior accountant was recording advertising expense and made an error. He debited the sales revenue account instead of the advertising expense account. This mistake would signify:

Accepted Answer

A)   Assets would be understated at the end of the period.
B)   Owner's equity would be understated at the end of the period.
C)   Net profit would be overstated for the period.
D)   The error would not cause the period's recorded profit to be incorrect.
E)   There would be an overstatement of sales revenue for the period.

Question 16

A credit entry can have the effect of:

Accepted Answer

A)   Increasing assets or increasing liabilities.
B)   Decreasing assets or increasing liabilities.
C)   Decreasing assets or decreasing owners equity.
D)   Increasing liabilities or decreasing owners equity.
E)   Increasing assets or increasing owners equity.

Question 17

Which of the following normally have a credit balance?

Accepted Answer

A)   Assets and revenue
B)   Expenses and assets
C)   Prepaid expenses and revenues
D)   Liabilities and owner's equity
E)   None of the above.

Question 18

In the current year the Budget Hotel earned $100,000 profit. Its assets increased by $140,000 and its liabilities increased by $50,000. What was the value of the owners' capital contribution or dividend paid during the year?

Accepted Answer

A)   $20,000 dividend paid.
B)   Contribution of $20,000.
C)   $10,000 dividend paid.
D)   Contribution of $10,000.
E)   None of the above.

Question 19

The retained earnings account represents:

Accepted Answer

A)   The undistributed profit of a business held as cash.
B)   An indicator of how much cash an organisation has accumulated to pay out to owners.
C)   Profit earned in the current financial year.
D)   The accumulated profit of a business since it began operations minus any dividends or drawings paid out to owners.
E)   None of the above.

Question 20

On 1st of June a hotel purchased a new vacuum cleaner for $12,000. It paid $8,000 in cash and the vacuum cleaner supplier extended 30 days credit for the balance. Which of the following is the accounting entry to record the 1st June transaction?

Accepted Answer

A)   Debit cleaning equipment $12,000, credit cash $12,000.
B)   Debit cleaning equipment $8,000, credit cash $8,000.
C)   Debit cleaning equipment $12,000, credit cash $8,000, credit accounts receivable $4,000.
D)   Debit cleaning equipment $12,000, credit cash $8,000, credit accounts payable $4,000.
E)   None of the above.

Exam 3: Double Entry Accounting

With respect to double entry accounting systems, which of the following statements is true?

Correct Answer
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C

In the current year the Budget Hotel earned $60,000 profit. Its assets increased by $120,000 and its liabilities increased by $40,000. What was the value of the owners' capital contribution or dividend received during the year?

Correct Answer
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B

With respect to double entry accounting systems, which of the following statements is true?

Correct Answer
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In a hotel, which of the following is not normally treated as a current asset?

Correct Answer
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On 1^st of March an event operator purchased a sound system for $60,000. The event operator Paid a deposit of $6,000 in cash and financed the balance with a bank loan. Which of the following is the accounting entry to record the 1^st March transaction?

Correct Answer
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D

Which accounts normally have credit balances?

Correct Answer
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In its most recent financial year, Gold Coast Events earned $120,000 profit. Its assets increased by $170,000 and its liabilities increased by $70,000. What was the value of the owners' capital contribution or dividend paid during the year?

Correct Answer
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A revenue account:

Correct Answer
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When a hotel pays off a bank loan, in its books it:

Correct Answer
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A hotel sold four cases of wine at a conference function for $2,160 cash. The four cases cost the hotel $1,000. The set of accounting entries to record this transaction would include which of the following:

Correct Answer
verified

In the current year Ms B. Seen operated Main Events. The business earned $50,000 profit for the year. Its assets increased by $100,000 and its liabilities increased by $30,000. What was the net amount of the capital contributions or drawings taken by Ms Seen during the year?

Correct Answer
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In double entry accounting:

Correct Answer
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Which of the following statements about journal entries is false?

Correct Answer
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Correct Answer
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A hotel's junior accountant was recording advertising expense and made an error. He debited the sales revenue account instead of the advertising expense account. This mistake would signify:

Correct Answer
verified

A credit entry can have the effect of:

Correct Answer
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Which of the following normally have a credit balance?

Correct Answer
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In the current year the Budget Hotel earned $100,000 profit. Its assets increased by $140,000 and its liabilities increased by $50,000. What was the value of the owners' capital contribution or dividend paid during the year?

Correct Answer
verified

The retained earnings account represents:

Correct Answer
verified

On 1^st of June a hotel purchased a new vacuum cleaner for $12,000. It paid $8,000 in cash and the vacuum cleaner supplier extended 30 days credit for the balance. Which of the following is the accounting entry to record the 1^st June transaction?

Correct Answer
verified

Exam 3: Double Entry Accounting

With respect to double entry accounting systems, which of the following statements is true?

Correct AnswerverifiedC

In the current year the Budget Hotel earned $60,000 profit. Its assets increased by $120,000 and its liabilities increased by $40,000. What was the value of the owners' capital contribution or dividend received during the year?

Correct AnswerverifiedB

With respect to double entry accounting systems, which of the following statements is true?

Correct AnswerverifiedShow Answer

In a hotel, which of the following is not normally treated as a current asset?

Correct AnswerverifiedShow Answer

On 1st of March an event operator purchased a sound system for $60,000. The event operator Paid a deposit of $6,000 in cash and financed the balance with a bank loan. Which of the following is the accounting entry to record the 1st March transaction?

Correct AnswerverifiedD

Which accounts normally have credit balances?

Correct AnswerverifiedShow Answer

In its most recent financial year, Gold Coast Events earned $120,000 profit. Its assets increased by $170,000 and its liabilities increased by $70,000. What was the value of the owners' capital contribution or dividend paid during the year?

Correct AnswerverifiedShow Answer

A revenue account:

Correct AnswerverifiedShow Answer

When a hotel pays off a bank loan, in its books it:

Correct AnswerverifiedShow Answer

A hotel sold four cases of wine at a conference function for $2,160 cash. The four cases cost the hotel $1,000. The set of accounting entries to record this transaction would include which of the following:

Correct AnswerverifiedShow Answer

In the current year Ms B. Seen operated Main Events. The business earned $50,000 profit for the year. Its assets increased by $100,000 and its liabilities increased by $30,000. What was the net amount of the capital contributions or drawings taken by Ms Seen during the year?

Correct AnswerverifiedShow Answer

In double entry accounting:

Correct AnswerverifiedShow Answer

Which of the following statements about journal entries is false?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A hotel's junior accountant was recording advertising expense and made an error. He debited the sales revenue account instead of the advertising expense account. This mistake would signify:

Correct AnswerverifiedShow Answer

A credit entry can have the effect of:

Correct AnswerverifiedShow Answer

Which of the following normally have a credit balance?

Correct AnswerverifiedShow Answer

In the current year the Budget Hotel earned $100,000 profit. Its assets increased by $140,000 and its liabilities increased by $50,000. What was the value of the owners' capital contribution or dividend paid during the year?

Correct AnswerverifiedShow Answer

The retained earnings account represents:

Correct AnswerverifiedShow Answer

On 1st of June a hotel purchased a new vacuum cleaner for $12,000. It paid $8,000 in cash and the vacuum cleaner supplier extended 30 days credit for the balance. Which of the following is the accounting entry to record the 1st June transaction?

Correct AnswerverifiedShow Answer

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C

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B

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Correct Answer
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On 1^st of March an event operator purchased a sound system for $60,000. The event operator Paid a deposit of $6,000 in cash and financed the balance with a bank loan. Which of the following is the accounting entry to record the 1^st March transaction?

Correct Answer
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D

Correct Answer
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Correct Answer
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Correct Answer
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On 1^st of June a hotel purchased a new vacuum cleaner for $12,000. It paid $8,000 in cash and the vacuum cleaner supplier extended 30 days credit for the balance. Which of the following is the accounting entry to record the 1^st June transaction?

Correct Answer
verified