Multiple choice

1. (TCO 2) Franklin Company provided consulting services and billed the client $2,500. As a result of this event, _________. (Points : 4) 

assets remained unchanged.

assets increased by $2,500.

equity increased by $2,500.

both assets increased by $2,500 and equity increased by $2,500

2. (TCO 2) A credit is not the normal balance for which account listed below? (Points : 4) 

Common stock account

Revenue account

Liability account

Dividends account

3. (TCO 2) In the first month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $400. The cash account has a _________ (Points : 4) 

$500 debit balance.

$900 debit balance.

$500 credit balance.

$400 credit balance.

4. (TCO 2) A trial balance would only help in detecting which one of the following errors? (Points : 4) 

A transaction that is not journalized

A journal entry that is posted twice

Offsetting errors made in recording the transaction

A transposition error when transferring the debit side of a journal entry to the ledger