Reference no: EM132957972

Problem 1. Accounting reports are least helpful in answering which of the following questions?

A) How much cash was available at the end of the last year?

B) How well were the employees treated by management?

C) Did the company make a profit for the previous year?

D) Can the company pay its debts on time?

Problem 2. Bob Allen's Company sells a machine it purchased last week for cash equivalent to the original cost of $15,000. This has the effect of

A) decreasing liabilities and increasing owner's equity.

B) decreasing assets and decreasing liabilities.

C) decreasing assets and increasing owner's equity.

D) no change to the overall accounting equation.

Problem 3. The normal balance of an account is

A) debit.

B) credit.

C) the side that decreases.

D) the side that increases.

Problem 4. Which of the following errors would cause the trial balance to be out of balance?

A) An entry is posted twice.

B) An entry is not posted at all.

C) A debit is entered as $100 and the credit is entered at $1,000.

D) None of these answers are correct.

Problem 5. Conner Sales' total assets and total liabilities increased $500. The transaction could have been

A) purchase of supplies for cash, $500.

B) purchase of supplies for $600 with a down payment of $100 and the remainder on account.

C) paid the rent for the month, $600.

D) None of these answers are correct.