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A2 - Intermediate Financial Accounting > AI Test > Flashcards

AI Test Flashcards

1
Q

What is the purpose of journal entries in financial accounting?

A

To record all financial transactions in the accounting system.

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2
Q

True or False: A journal entry must always include a debit and a credit.

A

True

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3
Q

Fill in the blank: The accounting equation is Assets = _____ + Equity.

A

Liabilities

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4
Q

What type of account is ‘Cash’?

A

Asset

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5
Q

In a journal entry, which side is debited when recording an increase in an asset?

A

The left side

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6
Q

What is the journal entry for purchasing equipment for $5,000 in cash?

A

Debit Equipment $5,000, Credit Cash $5,000

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7
Q

Multiple choice: Which of the following is a liability account? A) Cash B) Accounts Payable C) Revenue

A

B) Accounts Payable

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8
Q

What is the effect of recording a sale on credit?

A

Increase Accounts Receivable and increase Revenue.

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9
Q

True or False: A journal entry can have more than two accounts involved.

A

True

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10
Q

What is the journal entry for receiving $1,000 cash from a customer for services rendered?

A

Debit Cash $1,000, Credit Service Revenue $1,000

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11
Q

Fill in the blank: When a company pays its employees, the journal entry includes a debit to _____.

A

Salaries Expense

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12
Q

What type of account is ‘Unearned Revenue’?

A

Liability

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13
Q

What is the journal entry for purchasing inventory on credit for $3,000?

A

Debit Inventory $3,000, Credit Accounts Payable $3,000

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14
Q

Multiple choice: An increase in expenses will result in which of the following? A) Increase in Assets B) Decrease in Equity C) Increase in Revenue

A

B) Decrease in Equity

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15
Q

What is the journal entry for paying a $500 utility bill?

A

Debit Utility Expense $500, Credit Cash $500

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16
Q

True or False: Depreciation expense is recorded as a debit in the journal.

A

True

17
Q

Fill in the blank: The journal entry for issuing common stock for cash includes a credit to _____.

A

Common Stock

18
Q

What is the journal entry for receiving a $2,000 loan from a bank?

A

Debit Cash $2,000, Credit Notes Payable $2,000

19
Q

What type of account is ‘Retained Earnings’?

A

Equity

20
Q

Multiple choice: Which account is debited when a company pays off a debt? A) Accounts Payable B) Cash C) Expenses

A

A) Accounts Payable

21
Q

What is the journal entry for declaring a dividend of $1,000?

A

Debit Retained Earnings $1,000, Credit Dividends Payable $1,000

22
Q

True or False: An asset account is increased by a credit.

A

False

23
Q

What is the journal entry for selling a piece of equipment for $2,500 that originally cost $5,000?

A

Debit Cash $2,500, Debit Accumulated Depreciation $2,500, Credit Equipment $5,000

24
Q

Fill in the blank: The journal entry for a cash purchase of supplies includes a debit to Supplies and a credit to _____.

A

Cash

25
Q

What is the effect of recording bad debt expense?

A

Decrease Accounts Receivable and increase Bad Debt Expense.

26
Q

Multiple choice: Which of the following accounts is affected by an expense? A) Assets B) Liabilities C) Equity

A

C) Equity

27
Q

What is the journal entry for issuing a $5,000 promissory note?

A

Debit Cash $5,000, Credit Notes Payable $5,000

28
Q

True or False: Revenue accounts are increased with a debit.

A

False

29
Q

Fill in the blank: When a company receives cash in advance for services to be performed, it debits _____ and credits Unearned Revenue.

A

Cash

30
Q

What is the journal entry for paying $200 for office supplies?

A

Debit Office Supplies Expense $200, Credit Cash $200

31
Q

Multiple choice: Which of the following is NOT a component of a journal entry? A) Date B) Amount C) Balance

A

C) Balance

32
Q

What is the journal entry for recognizing an accrued expense of $300?

A

Debit Expense $300, Credit Accounts Payable $300

33
Q

True or False: A trial balance is prepared after journal entries are posted.

A

True

34
Q

Fill in the blank: The journal entry for cash sales includes a debit to Cash and a credit to _____ Revenue.

A

Sales

35
Q

What is the journal entry for a company purchasing a vehicle for $20,000 and paying $5,000 in cash?

A

Debit Vehicle $20,000, Credit Cash $5,000, Credit Notes Payable $15,000

A2 - Intermediate Financial Accounting (12 decks)

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