Reference no: EM131052006

Problem 1

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

Credit an owner's equity account for $800.
Debit an owner's equity account for $800.
Credit an asset account for $800.
Credit another liability account for $800.

Problem 2

Which of the following is not true of the terms debit and credit?

They can be interpreted to mean left and right.
They can be abbreviated as Dr. and Cr.
They can be interpreted to mean increase and decrease.
They can be used to describe the balance of an account.

Problem 3

TransAm Mail Service purchased equipment for $2,000. TransAm paid $400 in cash and signed a note for the balance. TransAm debited the Equipment account, credited Cash and

credited another asset account for $400.
credited a liability account for $1,600.
1,600.
nothing further must be done.

Problem 4

On January 14, Edamame Industries purchased supplies of $700 on account. The entry to record the purchase will include

a debit to Supplies and a credit to Cash.
a debit to Supplies Expense and a credit to Accounts Receivable.
a debit to Accounts Receivable and a credit to Supplies.
a debit to Supplies and a credit to Accounts Payable.

Problem 5

Chik Chik Company showed the following balances at the end of its first year:

Cash	$ 6,000
Prepaid insurance	9,400
Accounts receivable	7000
Accounts payable	5,600
Notes payable	8,400
Owner's Capital	2,800
Owner's Drawings	1,400
Revenues	44,000
Expenses	35,000

What did Chik Chik Company show as total credits on its trial balance?

$60,800
$62,200
$70,200
$51,400

Problem 6

The final step in the recording process is to

enter the transaction in a journal.
prepare a trial balance.
analyze each transaction.
transfer journal information to ledger accounts.

Problem 7

When three or more accounts are required in one journal entry, the entry is referred to as a

multiple entry.
compound entry.
simple entry.
triple entry.

Problem 8

When journalizing, the reference column is

used to reference the
used to reference the journal page.
used to reference the financial statements.
left blank.

Problem 9

Camper Van Company purchased equipment for $2,600 cash. As a result of this event,

total assets remained unchanged.
owner's equity decreased and total assets increased by $2,600.
total assets increased by $2,600.
owner's equity decreased by $2,600.

Problem 10

A trial balance is a listing of

the chart of accounts.
general ledger accounts and balances.
the totals from the journal pages.
transactions in a journal.