Problem 1) In a typical chart of accounts, liabilities start with a _______ and expenses start with a _____
Possible answers are (a) 2,4 (b) 1,3 (c) 2,5 (d) 1,4
Problem 2) A business makes a principle payment of cash on a note payable. The note payable was originally issued for the purchase of equipment. Which of the following occurs?
a) an asset is credited and a liability is debited
b) an asset is debited and an asset is credited.
c) an asset is debited and a liability is credited.
d) a liability is debited and a liability is credited
Problem 3) which of the following is first step in the normal flow of accounting data from the journal to the ledger?
a) journalizing
b) posting
c) transaction analysis
d) preparation of trial balance
Problem 4) A payment on an account was posted as a debit to cash and a credit to accounts payable. Which of the following conditions will exist?
a) cash would be overstated
b) accounts payable would be understated
c) accounts receivable would be overstated
d) stockholders equity would be overstated.
Problem 5) Which of the following accounts would be adjusted at the end of the accounting period?
a) cash
b) accounts receivable
c) accounts payable
d) prepaid insurance