College Accounting A Career Approach 12th Edition Cathy J Scott- Test Bank

 

To Purchase this Complete Test Bank with Answers Click the link Below

 

https://tbzuiqe.com/product/college-accounting-a-career-approach-12th-edition-cathy-j-scott-test-bank/

 

If face any problem or Further information contact us At tbzuiqe@gmail.com

 

 

Sample Test

Chapter 03

 

 

1. Which of the following is/are not true about a proper journal entry?   a. An explanation is needed immediately after each debit and immediately after each credit.   b. All credits are indented.   c. A debit is never indented, even if a liability or owner’s equity account is involved.   d. All debits are listed before the first credit.   e. In a compound entry, the largest amounts are listed first.   ANSWER:   a POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

2. A book of original entry is known as a   a. ledger account.   b. general ledger.   c. trial balance.   d. journal.   e. T account.   ANSWER:   d POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

3. An accountant wanting to know the balance of a particular account would refer to the   a. ledger.   b. chart of accounts.   c. book of original entry.   d. source document.   e. journal.   ANSWER:   a POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

4. The process of subtotaling both sides of an account and recording the amount on that side is known as   a. footing.   b. taking a trial balance.   c. posting.   d. balancing the accounts.   e. journalizing.   ANSWER:   a POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

5. If the number of an account is 211, this probably means that the account is the first account in the   a. Owner’s Equity section.   b. Assets section.   c. Revenues section.   d. Liabilities section.   e. Expenses section.   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

6. When an entry is posted, the last step in the process is   a. recording the explanation.   b. placing the account number in the Post. Ref. column of the journal.   c. placing the journal page number in the Post. Ref. column of the ledger.   d. placing the account number in the Post. Ref. column of the ledger.   e. placing the balance of the account in either the debit or credit column in the ledger.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

7. The first step in the posting process is recording the   a. journal page number in the ledger account.   b. ledger account number in the journal.   c. date in the ledger account.   d. explanation in the journal.   e. debit account and amount.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

8. Which of the following errors, considered individually, would cause the trial balance totals to be unequal?   a. Cash received from a customer on account was posted as a credit of $220 to Cash and a debit of $220 to Accounts Receivable.   b. A payment of $76 for supplies was posted as a debit of $67 to Supplies Expense and a credit of $76 to Cash.   c. A payment of $391 to a creditor was posted as a debit of $931 to Accounts Payable and a credit of $931 to Cash.   d. A receipt of $252 from a customer was posted as a debit of $225 to Cash and a credit of $225 to Accounts Receivable.   e. A payment of $83 to pay the telephone bill (received last week) was posted as a debit of $38 to Accounts Payable and a credit of $38 to cash.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

9. Which of the following errors will probably be located when preparing a trial balance?   a. Posting the debit of a journal entry as a credit and the credit as a debit   b. Failure to record an entire entry in the journal   c. Failure to post an entire entry in the ledger   d. Failure to post part of an entry   e. Posting the correct amount to the incorrect credit account   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

10. The proof that the debits and credits in the ledger are equal is called the   a. trial balance.   b. journal.   c. statement of owner’s equity.   d. income statement.   e. balance sheet.   ANSWER:   a POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

11. In the accounting process, the second step is to   a. post entries to the ledger accounts.   b. record the information from a source document.   c. prepare a trial balance.   d. record the account numbers in the journal.   e. prepare an income statement.   ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Accounting Cycle United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

12. Which of the following errors, each considered separately, would cause the trial balance totals to be unequal?   a. A payment of $20 for Miscellaneous Expense was recorded as a debit of $20 to Cash and a credit of $20 to Miscellaneous Expense.   b. The amount of $326 received from customers on account was posted as a debit of $236 to Cash and a credit of $236 to Accounts Receivable.   c. A payment of $410 to a creditor was posted as a debit of $410 to Accounts Payable and a credit of $41 to Cash.   d. A payment of $18 to a creditor was posted as a debit of $180 to Accounts Payable and a credit of $180 to Cash.   e. A receipt of $36 for Income from Services was recorded as a debit to Cash for $36 and a credit to Account Receivable for $36.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

13. When posting from the journal to the ledger, the accountant failed to post a $52 debit to Cash. The effect of this error will be that the   a. amounts in the journal will be in error.   b. trial balance will not balance.   c. total debits in the trial balance will be larger than the total credits.   d. Cash account balance will be overstated.   e. trial balance will not be affected.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

14. A cash payment of $130 on account was recorded as a $310 debit to Accounts Payable and a $310 credit to Cash. The necessary correcting entry is   a. debit Cash, $180; credit Accounts Receivable, $180.   b. debit Accounts Payable, $180; credit Cash, $180.   c. debit Cash, $180; credit Accounts Payable, $180.   d. debit Accounts Receivable, $180; credit Cash, $180.   e. debit Cash $130, credit Accounts Payable, $130.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

15. A payment of $350 was received from a charge customer and recorded and posted as $305. The necessary correcting entry is   a. debit Cash, $45; credit Income from Services, $45.   b. debit Cash, $45; credit Accounts Receivable, $45.   c. debit Accounts Receivable, $45; credit Cash, $45.   d. debit Cash, $45; credit Accounts Payable, $45.   e. credit Cash $45; debit Accounts Receivable, $45.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

16. A _________ is a book in which business transactions are recorded.   a. ledger   b. balance sheet   c. journal   d. trial balance   ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

17. ____________ furnish proof that a transaction has taken place.   a. Source documents   b. Secure documents   c. Ledgers   d. Journal entries   ANSWER:   a POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

18. Shower Flower Company bought equipment, paying cash, $2,500. The accountant would record the following journal entry:   a. Cash                       $2,500 Equipment                         $2,500   b. Equipment               $2,500 Cash                                 $2,500   c. Equipment               $2,500 Accounts Payable              $2,500   d. Equipment Expense $2,500 Cash                                 $2,500   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

19. Apple Company purchased $6,000 in equipment, paying $2,000 in cash and placing the remainder on account. The accountant would record the following journal entry:   a. Cash                              $8,000 Equipment                                $8,000   b. Equipment                      $6,000 Cash                                        $6,000   c. Equipment                      $8,000 Accounts Payable                     $8,000   d. Equipment Expense        $8,000 Accounts Payable                     $6,000 Cash                                        $2,000   e. Equipment                      $6,000 Accounts Payable                     $4,000 Cash                                        $2,000   ANSWER:   e POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

20. J. Jefferson invested $15,000 cash in his business. The accountant would record the following journal entry:   a. Cash                         $15,000 J. Jefferson, Capital               $15,000   b. J. Jefferson, Capital   $15,000 Cash                                     $15,000   c. Cash                         $15,000 Income from Services            $15,000   d. J. Jefferson, Drawing $15,000 Cash                                     $15,000   ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

21. Cave Man Company received cash revenue, $3,500. The accountant would record the following journal entry:   a. Cash                            $3,500 C. Man, Capital                     $3,500   b. Income from Services  $3,500 Cash                                     $3,500   c. Cash                           $3,500 Income from Services            $3,500   d. Cash                           $3,500 Accounts Receivable             $3,500   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

22. Stonehenge Company received cash on account, $2,500. The accountant would record the following journal entry:   a. Cash                           $2,500 C. Man, Capital                    $2,500   b. Income from Services $2,500 Cash                                    $2,500   c. Cash                          $2,500 Income from Services           $2,500   d. Cash                          $2,500 Accounts Receivable            $2,500   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

23. E. Elijah, owner, withdrew $3,000 for personal use. The accountant would record the following journal entry:   a. Cash                          $3,000 E. Elijah, Capital                   $3,000   b. Income from Services $3,000 Cash                                    $3,000   c. E. Elijah, Drawing      $3,000 Cash                                    $3,000   d. Wages Expense         $3,000 Cash                                    $3,000   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

24. Dungeon Company paid the monthly rent, $6,000. The accountant would record the following journal entry:   a. Cash                 $6,000 Rent Expense              $6,000   b. Prepaid Rent     $6,000 Cash                           $6,000   c. Rent Payable    $6,000 Cash                           $6,000   d. Rent Expense   $6,000 Cash                          $6,000   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

25. Vegas Company paid on account for advertising expenses, $900. The accountant would record the following journal entry:   a. Cash                          $900 Advertising Expense          $900   b. Accounts Receivable  $900 Cash                                 $900   c. Accounts Payable      $900 Cash                                 $900   d. Advertising Expense  $900 Cash                                $900   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

26. Unicorn Company paid the salary of a part-time office assistant, $4,000. The accountant would record the following journal entry:   a. Cash                 $4,000 Salary Expense             $4,000   b. Salary Expense $4,000 Cash                            $4,000   c. Salary Payable $4,000 Cash                            $4,000   d. Prepaid Salary $4,000 Cash                            $4,000   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

27. Summit Company paid Hacienda Products, a creditor, on account. The transaction would involve a   a. debit to Cash.   b. credit to Accounts Payable.   c. credit to Cash.   d. debit to Expenses.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

28. J. Forest deposited $60,000 in the bank in the name of the business. The transaction would involve a   a. debit to Cash.   b. credit to Cash.   c. credit to J. Forest, Drawing.   d. debit to J. Forest, Capital.   ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

29. W. Randall deposited $12,000 in the bank in the name of the business. The transaction would involve a   a. credit to Cash.   b. debit to W. Randall, Drawing.   c. credit to W. Randall, Capital.   d. debit to W. Randall, Capital.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

30. Red Baron Company purchased supplies for cash, $1,950. The transaction would involve a   a. debit to Cash.   b. credit to Accounts Payable.   c. credit to Supplies Expense.   d. debit to Supplies.   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

31. Beach Company receives $25,000 cash revenue for services performed. The transaction would involve a   a. credit to Cash.   b. debit to Income from Services.   c. debit to Accounts Receivable.   d. credit to Income from Services.   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

32. Juan Company purchased $15,000 in equipment on account. The transaction would involve a   a. credit to Cash.   b. debit to Accounts Payable.   c. debit to Equipment Expense.   d. credit to Accounts Payable.   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

33. Tonka Services receives a bill for a three-month liability insurance policy. The transaction would involve a   a. debit to Insurance Expense.   b. debit to Prepaid Insurance.   c. credit to Insurance Expense.   d. credit to Cash.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

34. Quick Lab Company received cash on account from patients. The transaction would involve a   a. credit to Income from Services.   b. debit to Income from Services.   c. credit to Accounts Receivable.   d. credit to Cash.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

35. Bright Services pays wages of a part-time employee. The transaction would involve a   a. debit to Wages Expense.   b. debit to Cash.   c. credit to Wages Payable.   d. credit to Prepaid Expenses.   ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

36. Patrick Services paid the office rent for the current month. The transaction would involve a   a. debit to Cash.   b. debit to Rent Expense.   c. credit to Rent Payable.   d. credit to Prepaid Rent.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

37. Homer Services pays the monthly rent, $5,000. The transaction would involve a   a. debit to Prepaid Rent.   b. debit to Rent Expense.   c. credit to Rent Payable.   d. debit to Cash.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

38. R. Dexter withdraws cash for personal use from the business. The transaction would involve a   a. debit to Wages Expense.   b. debit to Cash.   c. credit to R. Dexter, Drawing.   d. debit to R. Dexter, Drawing.   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

39. The _______________ requires that assets be recorded at the actual cost.   a. business entity principle   b. matching principle   c. cost principle   d. fair value principle   ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: GAAP United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

40. For a journal entry to be complete, it must contain   a. the date.   b. a debit entry.   c. a credit entry.   d. an explanation.   e. all of the answers listed.   ANSWER:   e POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

41. Which of the following is correct concerning recording journal entries?   a. The credit part of the entry is recorded first.   b. The credit account is always indented underneath the debit entry.   c. The debit part of the entry is recorded last.   d. Dollar signs are always recorded in the journal.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

42. Which of the following is true?   a. The ledger account form maintains a running balance of the account.   b. When recording business transactions, it is not important that one use the exact account titles as listed in the chart of accounts.   c. The process of transferring information from the journal to the ledger is called journalizing.   d. All of the answers listed are correct.   ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

43. The ____________ is a book or file containing the activity by accounts of a business.   a. general ledger   b. journal   c. trial balance   d. income statement   ANSWER:   a POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

44. Posting involves   a. transferring information from the income statement to the statement of owner’s equity.   b. transferring information from ledger to the journal.   c. transferring information from the ledger to the balance sheet.   d. transferring information from the journal to the ledger.   ANSWER:   d POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

45. Which of the following is true concerning posting?   a. The date of the transaction should be written in the account’s Date column.   b. The page number of the journal should be written in the Post. Ref. column of the ledger account.   c. The amount of the transaction should be recorded in either the debit or credit column.   d. The ledger account number should be recorded in the Post. Ref. column of the journal.   e. All of the answers listed are correct.   ANSWER:   e POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

46. Irena Company had a beginning normal balance of $35,000 in the cash account. The accountant posted a $2,000 credit on June 2, a $350 credit on June 4, and a $5,250 debit on June 20. What is the balance of cash in the general ledger?   a. $31,400 credit   b. $32,100 debit   c. $37,900 debit   d. $41,900 credit   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

47. Kaufman Company had a beginning normal balance of $15,000 in the accounts payable account. The accountant posted a $5,000 credit on May 6, a $2,500 credit on May 14, and a $8,000 debit on May 26. What is the balance of accounts payable in the general ledger?   a. $14,500 credit   b. $15,500 credit   c. $4,500 debit   d. $15,500 debit   ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

48. Which of the following is true concerning the trial balance?   a. If the trial balance equals then there are no errors in the recording of journal entries.   b. A trial balance should be prepared before posting.   c. The trial balance only lists the names of the accounts, not the balances.   d. The trial balance proves only that the total ledger debit balances equal the total ledger credit balances.   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

49. Lohan Company had the following account balances as of June 30. Cash $29,000 Equipment $15,000 Accounts Payable $2,800 T. Lohan, Capital $62,700 T. Lohan, Drawing $5,000 Income from Services $35,000 Rent Expense $12,000 Salaries Expense $8,000 What is the debit balance of the trial balance?   a. $141,700   b. $136,700   c. $64,000   d. $69,000   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

50. Munoz Company had the following account balances as of December 31. Cash $15,000 Equipment $7,000 Accounts Payable $4,200 R. Munoz, Capital $10,300 R. Munoz, Drawing $3,000 Income from Services $18,500 Rent Expense $6,000 Salaries Expense $2,000 What is the credit balance of the trial balance?   a. $28,800   b. $33,000   c. $25,500   d. $17,800   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

51. There are two methods for correcting errors, the   a. ruling method and the manual method.   b. manual method and the correcting entry method.   c. ruling method and the correcting entry method.   d. the ruling method and the deletion method.   ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

52. Which of the following is correct?   a. The manual ruling method can only be used to correct an error in the journal before posting.   b. The correcting entry method can only be completed in two steps.   c. The manual ruling method can be used to correct an error in the ledger after an entry has been posted.   d. All of the answers listed are correct.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

53. Which of the following is correct concerning correcting errors on the computer?   a. It is ok to delete an error entry on the computer.   b. If using a computer program, there will never be any errors to correct because the computer never allows errors to be recorded.   c. A correcting entry should be made with a brief explanation when correcting an error on the computer.   d. All of the answers listed are correct.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

54. A $500 payment for Wages Expense was incorrectly journalized and posted as a debit to Rent Expense for $500 and a credit to Cash for $500. The correcting entry, using the one-step method, would include a   a. debit to Cash for $500.   b. credit to Rent Expense for $500.   c. credit to Supplies Expense for $500.   d. credit to Cash for $500.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

55. A $800 payment for Rent Expense was incorrectly journalized and posted as a debit to Wages Expense for $800 and a credit to Cash for $800. The correcting entry, using the one-step method, would include a   a. debit to Cash for $800.   b. credit to Rent Expense for $800.   c. credit to Wages Expense for $800.   d. credit to Cash for $800.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

56. A $1,500 payment for Rent Expense was incorrectly journalized and posted as a debit to Rent Expense for $5,100 and a credit to Cash for $5,100. The correcting entry, using the one-step method, would include a   a. debit to Cash for $1,500.   b. credit to Rent Expense for $3,600.   c. credit to Rent Expense for $5,100.   d. credit to Cash for $1,500.   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

57. A $4,500 payment for Rent Expense was incorrectly journalized and posted as a debit to Rent Expense for $5,400 and a credit to Cash for $5,400. The correcting entry, using the one-step method, would include a   a. debit to Cash for $900.   b. credit to Rent Expense for $4,500.   c. credit to Rent Expense for $5,400.   d. credit to Cash for $90.   ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

58. What is the effect of the following error? $360 was received on account from customer. The accountant debited cash for $360 and credited Professional Fees for $360.   a. Revenue was understated.   b. Cash was understated.   c. Revenue was overstated.   d. Cash was overstated.   e. Total assets were understated.   ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

59. What is the effect of the following error? A check was written for $450 to pay the advertising bill received and recorded earlier in the month. The accountant debited Advertising Expense for $450 and credited Cash for $450.   a. Net Income was understated.   b. Cash was understated.   c. Accounts Receivable was understated.   d. Accounts Payable was overstated.   e. Choices a. and d. are both correct.   ANSWER:   e POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

60. What is the effect of the following error? The owner withdrew $3,000 for personal use. The accountant debited Wages Expense for $3,000 and credited Cash for $3,000.   a. Net Income was understated.   b. Cash was understated.   c. Total Owner’s Equity was understated.   d. Cash was overstated.   e. Wages Expenses were understated.   ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – AACSB: Analytic STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Application

 

61. The process of writing a transaction in a ledger is called journalizing.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

62. In the general journal, all liability accounts and owner’s equity accounts must be indented.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

63. The explanation for a transaction in the general journal in a manual system is indented under the credit part of the entry.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

64. In a manual system, it is not proper to split a journal entry at the bottom of a page.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

65. The official list of all the accounts is called the chart of accounts.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

66. The process of transferring account amounts from the book of original entry to the general ledger is called posting.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

67. When a month’s transactions have been posted, the Accounts Payable account will only have debit entries.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension

 

68. The Item column in the ledger is mostly used at the end of a financial period to make brief notations about end-of-period entries.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Knowledge

 

69. The general ledger shows a complete record of the transactions recorded in each individual account.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   CACC.NSMB.13.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – AACSB: Reflective Thinking STATE STANDARDS:   United States – AK – ACBSP: Recording Transactions United States – AK – AICPA-FN: Measurement KEYWORDS:   Bloom’s: Comprehension