Multiple Choice Financial Accounting

Question 1 of 20

5.0 Points

Which statement about the rules of debit and credit is true?

A. If accounts receivable is decreased with a credit, the normal balance is a credit.
B. If accounts payable is increased with a credit, the normal balance is a credit.
C. If capital is increased with a debit, the normal balance is a debit.
D. If cash is decreased with a debit, the normal balance is a debit.

Question 2 of 20

5.0 Points

The ledger is a

A. group of accounts that records data from business transactions.
B. tool used to make sure that all accounts have normal balances.
C. chronological record of the day’s transactions.
D. tool used to ensure that debits equal credits.

Question 3 of 20

5.0 Points

When recording transactions in two or more accounts and the totals of the debits and credits are equal, it’s called

A. debiting.
B. crediting.
C. posting.
D. double-entry bookkeeping.

Question 4 of 20

5.0 Points

The Accounts Receivable account has total debit postings of $1,900 and credit postings of $1,100. The balance of the account is a/an

A. $800 debit.
B. $800 credit.
C. $2,600 credit.
D. $2,600 debit.

Question 5 of 20

5.0 Points

The beginning balance in the Computers account was $2,000. The company purchased an additional $1,000 worth of computers. The balance in the account is a

A. debit of $2,000.
B. credit of $3,000.
C. debit of $3,000.
D. credit of $2,000.

Question 6 of 20

5.0 Points

Office Supplies had a normal starting balance of $75. There were debit postings of $80 and credit postings of $60 during the month. The ending balance is a

A. $55 debit.
B. $55 credit.
C. $95 debit.
D. $95 credit.
Question 7 of 20	5.0 Points

The beginning balance in Cash was $3,500. Additional cash of $2,000 was received. Checks were written totaling $2,500. The cash balance is

A. $2,000.
B. $6,000.
C. $4,500.
D. $3,000.

Question 8 of 20

5.0 Points

Which entry records the investment of cash by John, owner of a sole proprietorship?

A. Debit John, Capital; credit Cash
B. Debit Cash; credit John, Withdrawals
C. Debit John, Withdrawals; credit Cash
D. Debit Cash; credit John, Capital

Question 9 of 20

5.0 Points

The owner invested personal equipment in the business. To record this transaction,

A. debit Equipment and credit Accounts Payable.
B. debit Accounts Payable and credit Equipment.
C. debit Equipment and credit Capital.
D. credit Equipment and debit Capital.

Question 10 of 20

5.0 Points

The accounts payable account is a/an _______, and it has a normal _______ balance.

A. revenue; debit
B. expense; credit
C. liability; debit
D. liability; credit

Question 11 of 20

5.0 Points

Accounts Payable had a normal starting balance of $800. There were debit postings of $600 and credit postings of $300 during the month. The ending balance is a

A. $500 credit.
B. $1,000 debit.
C. $500 debit.
D. $1,000 credit.

Question 12 of 20

5.0 Points

A category that is not in the chart of accounts is

A. assets.
B. liabilities.
C. cash flows.
D. revenue.

Question 13 of 20

5.0 Points

A debit balance is a normal balance for which type of account?

A. Accounts payable
B. Revenue
C. Accounts receivable
D. Owner’s capital

Question 14 of 20

5.0 Points

A liability would be credited and an expense would be debited if the business

A. paid a creditor.
B. incurred an expense and didn’t pay the expense immediately.
C. bought supplies on account.
D. bought supplies for cash.

Question 15 of 20

5.0 Points

The business incurred an expense and paid it immediately. To record this transaction,

A. an expense is debited, and a liability is credited.
B. an expense is debited, and an asset is credited.
C. an expense is debited, and Capital is credited.
D. None of the above

Question 16 of 20

5.0 Points

Which type of account has a normal credit balance?

A. Withdrawals
B. Assets
C. Expenses
D. Revenues

Question 17 of 20

5.0 Points

The left side of any account is the

A. debit side.
B. credit side.
C. ending balance.
D. footings.

Question 18 of 20

5.0 Points

An account that would be increased by a credit is

A. cash.
B. accounts receivable.
C. utilities expense.
D. accounts payable.

Question 19 of 20

5.0 Points

The owner of BobCats R Us paid his personal MasterCard bill using a company check. What is the correct entry to record the transaction?

A. Credit Cash; debit Capital
B. Credit Cash; debit Supplies Expense
C. Credit Cash; debit Withdrawals
D. Credit Cash; debit Accounts Receivable

Question 20 of 20

5.0 Points

An account is said to have a debit balance if

A. the footing of the debits exceeds the footing of the credits.
B. there are more entries on the debit side than on the credit side.
C. its normal balance is debit without regard to the amounts or number of entries on the debit side.
D. the last entry of the accounting period was posted on the debit side.

12 years ago

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