Exam 1

Question 1

A debit entry to an account will always decreases the balance of the account regardless of which account it is.

Answer 1

False

Question 2

To credit an account is to make an entry on the left side of the account.

Answer 2

False

Question 3

If a company repays a bank loan with cash but does not record the transaction at all in any accounts what happens?

Answer 3

The ledger will balance in spit of the error but both Assets and Liabilities will be too high as a result

Question 4

Darcy Co. performed $4000 of accounting servicess for a customerwho will be billed in the future. What journal entry should Darcy record?

Answer 4

Debit to Accounts Receivable for $4000

Question 5

Barnes Co. sold $4000 of equipment on credit to a customer last month. Barnes Co. just receivied a payment of $2000. What journal entry should be recorded?

Answer 5

Credit to Accounts Receivable for $2000

Question 6

Are Revenues, or Liabilities recorded on the income statement?

Answer 6

Revenues

Question 7

Jame Co paid $1000 to a vendor to make a payment toward what they owe the vendor on account. What would be the journal entry for this?

Answer 7

Debit to Accounts Payable for $1000

Question 8

Jacob company performs a repair service on the last day of the month and leave a bill with the customer for $150. The bill will not be paid until next month. What shoud Jacob co. record in the journal.

Answer 8

Debit repairs expense and credit Accounts Payable $150

Question 9

Hanson company provided $3000 of services to a customer; the customer paid $1000 upon completion of the services and Hanson extended credit to the customer for the rest. What entry would Hanson record?

Answer 9

Debit Accounts Receivable $2000; Debit Cash $1000; and credit Service Revenue $3000

Question 10

Name two accounts that both increase on the debit side.

Answer 10

Cash, Equipment, Supplies, Prepaid rent, Prepaid insurance, Wages Expense, Gas Expense, Supply expense

Question 11

For a company not in its first month of operations how to you find the End period retained earnings?

Answer 11

Begining period earnings + Net income - Dividends = End of period retained earnings

Question 12

What would the entry be to record a payment of $1000 to a supplier in settlement of an account?

Answer 12

Debit to Accounts Payable and a credit to Cash for $1000

Question 13

Our company performs $500 in cleaning services for a customer and sends them a bill. What would the corresponding entry be?

Answer 13

Debit to Accounts Receivable and a credit to Cleaning Revenue for $500

Question 14

Our company places an order for $4000 of new office furniture; no payment is made at the time of the order and the furniture will not be shipped for several days. What would the journal entry be?

Answer 14

None at this time

Question 15

Transactions are first recorded in the company’s what?

Answer 15

Journal

Question 16

The accounts that company transactions are recorded in taken as a whole is the company’s what?

Answer 16

Ledger

Question 17

Adjusting entries must be recorded before the preparation of the companies financial statements.

Answer 17

True

Question 18

Revenue is recorded in the accounting period in which it is earned, rather than the period in which payment is receivied from the customer.

Answer 18

True

Question 19

Nothing should be recorded when assets are purchased on credit. When the bill is paid an entry should be made in the Journal to debit the asset account and credit cash.

Answer 19

False

Question 20

Which of these accounts increase with debit entries
Service Revenue
Common Stock
Equipment
Accounts Payable

Answer 20

Equipment

Question 21

James Co. was paid $4500 in advance on the first day of the month for 6 months of accounting services to be performed regularly throughout the 6 month period. At the end of the month what adjusting entry would be made ?

Answer 21

Unearned Revenue $750
Revenue $750

Question 22

Interest of $500 has accrued on a note payable to the bank. What would the adjusting entry to record this be?

Answer 22

Debit to Interest Expense and a credit to Interest Payable for $500

Question 23

An accrual adjusting entry will always include a receivable or payable account.

Answer 23

True

Question 24

Johnson Co. paid $2400 for eight months rent on the first day of the month. At the end of the month what adjusting entry will be made in relation to this?

Answer 24

Debit to Rent Expense and a credit to Prepaid Rent for $300

Question 25

At Williams Co. total employee salaries are $6000 each Friday for a 5-day work week. (Mon - Fri) Assuming the month ends on a Monday what adjusting entry must be made relating to salaries?

Answer 25

Debit to Salaries Expense and a credit to Salaries Payable for $1200

Question 26

Which of the following accounts would be found in a deferral adjusting entry?
Accounts Receivable and Revenue
Income Tax Expense and Income Taxes Paybale
Wages Expense and Wages Payable
Depreciations Expense and Accumulated Depreciation

Answer 26

Depreciations Expense and Accumulated Depreciation

Question 27

Name an account that is not part of any of the adjusting entries covered so far.

Answer 27

Cash

Question 28

A company began the month with $900 of supplies which was reflected in the supplies account. $400 more supplies were bought during the month and added to the account. At the end of the month only $500 of supplies were on hand still. What would be the corresponding adjustment entry?

Answer 28

Debit Supplies Expense and credit Supplies for $800

Question 29

Which of the following are not part of any closing entry
Dividents
Accumulated Depreciation
Service Revenue
Wages Expense

Answer 29

Accumulated Depreciation

Question 30

Closing entries are made in order to prepare revenue, expense, and dividend accounts for the upcoming new accounting period bringing these accounts to a zero balance.

Answer 30

True