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Exam 2: Analyzing Transactions

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Question 31

Multiple Choice

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All of the following occur with a double-entry accounting system except

A) The accounting equation remains in balance.
B) The sum of all debits is always equal to the sum of all credits in each journal entry.
C) Each business transaction will have only two entries.
D) Every transaction affects at least two accounts.

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Question 32

Multiple Choice

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The chart of accounts for the Corning Corporation includes the following: On journal page 3, the following transaction was found: What is the posting reference that will be found in the Cash account?

A) 11
B) 15
C) 3
D) none of these

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Question 33

Multiple Choice

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Which of the following groups of accounts have a normal debit balance?

Which of the following entries records the acquisition of office supplies on account?

Expenses follow the same debit and credit rules as

Cash was paid by Ari's Alarm Service to creditors on account. Which of the following entries for Ari's Alarm Service records this transaction?

Prepaid expenses are an example of an expense.

On January 1, 2010, Cary Parsons established a catering service. Listed below are accounts she would like to open in the general ledger. List the accounts in the order in which they should appear in the ledger and propose a two-digit account numbering scheme that is consistent with the rules of a proper chart of accounts. $\begin{array}{ll}\text { 1. } & \text { Cash } \\ \text { 2. } & \text { Supplies } \\ \text { 3. } & \text { Equipment } \\ \text { 4. } & \text { Accounts Payable } \\ \text { 5. } & \text { Capital Stock } \\ \text { 6. } & \text { Wages Expense } \\ \text { 7. } & \text { Rent Expense } \\ \text { 8. } & \text { Truck } \\ \text { 9. } & \text { Utilities Expense } \\ \text { 10. } & \text { Dividends } \\ \text { 11. } & \text { Truck Expense } \\ \text { 12. } & \text { Prepaid Insurance } \\ \text { 13. } & \text { Fees Earned } \\ \text { 14. } & \text { Misceellaneous Expense } \\ \text { 15. } & \text { Insurance Expense } \\ \text { 16. } & \text { Notes Payable } \\ \text { 17. } & \text { RetainedEarnings } \\ 18 . & \text { Accounts Receivable }\end{array}$

The process of transferring the debits and credits from the journal entries to the ledger accounts is called

In accordance with the rules of debit and credit, which of the following is true?

Transactions are listed in the journal chronologically.

The normal balance of an expense account is a credit.

On January 1, 2011, Cary Parsons established Cary's Catering Service. Listed below are accounts to use for transactions (a) through (f), each identified by a number. Following this list are the transactions that occurred during the first month of operations. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

For a month's transactions for a typical medium-sized business, the salary expense account is likely to have only credit entries.

Accounts are classified in the ledger

A debit balance in which of the following accounts would indicate a likely error?

Prarie Clinic purchased X-ray equipment for $7,500, paid $2,250 down, with the remainder to be paid later. The correct entry would be

Which of the following statements is not true about liabilities?

The posting process will include the transfer of the following information from the journal to the account.

Randomly listed below are the steps for preparing a trial balance: What is the proper order of these steps?