Quiz+1+with+solution

Quiz+1+with+solution - Problem 1 Multiple Choice(54 points...

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Problem 1 Multiple Choice (54 points, enter your answers at the table below) Answer for Multiple Choice: 1 2 3 4 5 6 7 8 9 10 b c d a a d b d c d 11 12 13 14 15 16 17 18 19 20 a a a b a d c c c c 21 22 23 24 25 26 27 c c d b b b a 1. Which of the following is a nominal (temporary) account? a. Unearned Revenue b. Salary Expense c. Inventory d. Retained Earnings 2. Which of the following statement is true regarding debits and credits? a. On the income statement, debits are used to increase account balances, whereas on the balance sheet, credits are used to increase account balances. b. Before adjustments, debits will not equal credits in the trial balance. c. The rules for debit and credit and the normal balance of Share Capital–Ordinary are the same as for liabilities. d. On the income statement, revenues are increased by debit whereas on the balance sheet retained earnings is increased by a credit. 3. Debit always means a. right side of an account. b . i n c r e a s e . c. decrease. d. none of these. 4. Equity is not affected by all a. cash receipts. b. dividends. c. revenues. d. expenses. 5. Basic steps in the recording process include all of the following except a. Transfer the journal information to the appropriate account in the statement of financial postion. b. Analyze each transaction for its effect on the accounts. c. Enter the transaction information in a journal. d. All of the choices are corrrect regarding the basic steps in the recording process.
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6. The trial balance will not balance when a company a. Fails to journalize a transaction. b. Omits posting a correct journal entry. c. Posts a journal entry twice. d. Debits two balance sheet accounts and no income statement accounts. 7. A journal entry to record the sale of inventory on account will include a a. debit to inventory. b. debit to accounts receivable. c. debit to sales. d. credit to cost of goods sold. 8. A journal entry to record a receipt of rent revenue in advance will include a a. debit to rent revenue. b. credit to rent revenue. c. credit to cash. d. credit to unearned rent . 9. An adjusting entry to record an accrued expense involves a debit to a(an): a. expense account and a credit to a prepaid account. b. expense account and a credit to Cash. c. expense account and a credit to a liability account. d. liability account and a credit to an expense account. 10. The failure to properly record an adjusting entry to accrue a revenue item will result in an: a. understatement of revenues and an understatement of liabilities. b. overstatement of revenues and an overstatement of liabilities. c. overstatement of revenues and an overstatement of assets. d. understatement of revenues and an understatement of assets. 11.
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Quiz+1+with+solution - Problem 1 Multiple Choice(54 points...

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