1. TRUE OF FALSE: Journals and ledgers are synonymous terms.
2. TRUE OR FALSE: In the accounting process, a transaction is generally recorded first in the ledger accounts and then posted to the journal.
3.The numbering system used in a company's chart of accounts:
A. Is the same for all companies.
B. Typically begins with balance sheet accounts.
C. Depends on the source documents used in the accounting process.
D. Is determined by generally accepted accounting principles.
E. Typically begins with income statement accounts.
4. A business's source documents may include all of the following except:
A. Sales tickets.
B. Bank statements.
C. Checks.
D. Purchase orders.
E. Ledgers.
5. A business uses a credit to record:
A. A decrease in an unearned revenue account.
B. An increase in an expense account.
C. A decrease in a revenue account.
D. A decrease in an equity account.
E. A decrease in an asset account.
6. Beginning and ending balances of Accounts Receivable were $43,000 and $22,000, respectively. If collections from clients during the period were $65,000, how much were services rendered on account? (a.k.a How much sales did he have on account)
7. Jorden Company reports total assets and total liabilities of $251,000 and $100,000, respectively, at the conclusion,of its first year of business. The company earned $75,000 during the first year, and distributed $30,000 to shareholders as dividends. How much did shareholders initially invest in the business?
8. Richards Corporation declared and paid a $3,500 dividend. The appropriate journal entry to record this transaction is:
A. Debit Cash/Credit Dividends.
B. Debit Dividends/Credit Cash.
C. Debit Expense/Credit Dividends.
D. Debit Dividends/Credit Expense.
E. None of these.
9. A debit is used to record which of the following?
A. An increase in a contributed capital account.
B. An increase in a revenue account.
C. An increase in the dividends account.
D. A decrease in an asset account.
E. A decrease in an expense account.
10. Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately. Which of the following general journal entries will Wiley Consulting make to record this transaction?
A. Debit: Supplies Expense 7,000 / Credit: Accounts Payable 7,000
B. Debit: Supplies 7,000 / Credit: Cash 7,000
C. Debit: Supplies 7,000 / Credit: Accounts Payable 7,000
D. Debit: Cash 7,000 / Credit: Supplies 7,000
E. Debit: Accounts Payable 7,000 / Credit: Supplies 7,000
11. TRUE OR FALSE: In order to determine the proper point in time to enter revenue in the accounting records, accountants normally recognize revenue when it is earned.
12. TRUE OR FALSE: Accrued revenues at the end of one accounting period are expected to result in cash collections in a future period.
13. On January 15, Collin paid $600 in insurance premiums for a two-month policy for January 15 to March 15. The payment was initially recorded to Insurance Expense. Approximately how much should be debited to Prepaid Insurance at January 31? (Hint: What should the balance be in that account as of January 31st - Insurance Gets used up with the passage of time)
A. $150.
B. $0
C. None of these.
D. $450.
E. $600.
14. Collin Printing began operations on January 1. At the end of January, Collin had $700 of equipment depreciation for the month. The entry to record deprecation includes.
A. a debit to Depreciation Expense.
B. None of these.
C. a credit to the Equipment account.
D. a credit to Deprecation Expense.
E. a debit to Accumulated Depreciation.
15. Assuming unearned revenues are originally recorded in balance sheet accounts, the adjusting entry to record earning of unearned revenue is:
A. Increase an expense; decrease an asset.
B. Increase an asset; increase revenue.
C. Increase an expense; increase a liability.
D. Increase an expense; decrease a liability.
E. Decrease a liability; increase revenue.