unit 2

Take Test: Unit II Assessment

Test Information

QUESTION 1

Which of the following sequences states the order in which accounts are listed on a trial balance?

Equity → Assets → Liabilities

Liabilities → Assets → Equity

Assets → Equity → Liabilities

Assets → Liabilities → Equity

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QUESTION 2

A business performs services for $26,000 and collects cash from the customer. Which of the following accounts will be debited?

Cash Accounts receivable Service revenue Accounts payable

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QUESTION 3

Which of the following accounts increases with a debit? Prepaid rent Interest payable Accounts payable

Owner, capital

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QUESTION 4

Question Completion

Status:

QUESTION 4

Donaldson's Delivery Company began operations on January 1, 2019. The following Trial Balance was prepared on December 31, 2019.

Donaldson's Delivery Service Company Trial Balance December 31, 2019 Account Title Debit Credit Cash $15,500 Accounts Receivable 8,000 Prepaid Rent 2,400 Office Supplies 1,400 Land 25,000 Building 32,000 Equipment 23,000 Accounts Payable $10,400 Unearned Revenue 2,500 Notes Payable 20,000 Donaldson, Capital 57,000 Donaldson, Withdrawals 6,400 Service Revenue 83,900 Salaries Expense 28,000 Rent Expense 18,000 Truck Expense 12,400 Office Expense 1,700 ________ Total $173,800 $173,800

What is the net income for the year ending December 31, 2019?

$17,400

$23,800

$26,300

$74,400

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QUESTION 5

Which of the following is a liability account? Prepaid advertising Cash Building

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Unearned rent

QUESTION 6

Accounts receivable is a(n) __________ account and has a normal __________ balance.

liability; debit asset; debit liability; credit asset; credit

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QUESTION 7

Which of the following represents the correct flow of accounting data? Transactions occur; transactions are analyzed; transactions are journalized and posted; source documents are prepared Transactions occur; source documents are prepared; transactions are journalized and posted; Transactions occur; source documents are prepared; transactions are analyzed; transactions are journalized and posted Source documents are prepared; transactions occur; transactions are analyzed; transactions are journalized and posted

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QUESTION 8

A business purchases $3,500 of office supplies for cash. Which of the following sets of ledger accounts reflects the posting of this transaction?

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QUESTION 9

A listing of all accounts in numerical order is called a(n) __________.

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ledger journal income statement chart of accounts

QUESTION 10

The accounts payable account of Waterford Company has the following postings:

Calculate the ending balance of the account.

$14,000 credit

$18,000 debit

$18,000 credit

$7,000 debit

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QUESTION 11

Regarding the double-entry system, which of the following statements is FALSE? A transaction would be incomplete if only one side were recorded. Because of technology, the use of the double-entry system of accounting is optional. The double-entry system is a system of accounting in which every transaction affects at least two accounts. If office supplies are purchased on account, the account Office Supplies increases and the account Accounts Payable increases.

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QUESTION 12

A sole proprietorship reported the following transactions for the month of March. The transactions have been journalized and posted to the proper accounts.

March 1 The business received $8,000 cash from the owner in exchange for capital. March 2 Paid the first month's rent of $600. March 3 Purchased equipment by paying $1,000 cash and executing a note payable for $3,000. March 4 Purchased office supplies for $600 cash.

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March 5 Billed a client for $11,000 of design services completed. March 6 Received $9,000 on account for the services previously recorded.

What is the balance in Accounts Receivable?

$9,000

$2,000

$3,000

$11,000

QUESTION 13

A business purchases equipment by paying $7,517 in cash and issuing a note payable of $19,410. Which of the following occurs?

Cash is credited for $7,517, Equipment is credited for $26,927, and Notes Payable is debited for $19,410. Cash is credited for $7,517, Equipment is debited for $26,927, and Notes Payable is credited for $19,410. Cash is debited for $7,517, Equipment is debited for $19,410, and Notes Payable is credited for $26,927. Cash is debited for $7,517, Equipment is credited for $19,410, and Notes Payable is debited for $11,893.

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QUESTION 14

The following transactions for the month of March have been journalized and posted to the proper accounts of a sole proprietorship.

March 1 The business received $10,000 cash from the owner of the business, Morris Tharps. The business gave capital to Morris Tharps. March 2 Paid the first month's rent of $1,000. March 3 Purchased equipment by paying $2,000 cash and executing a note payable for $5,000. March 4 Purchased office supplies for $710 cash. March 5 Billed a client for $9,000 of design services completed. March 6 Received $7,600 on account for the services previously recorded.

What is the balance in Cash on March 6?

$14,890

$13,890

$15,890

$15,600

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QUESTION 15

Accounts payable is a(n) __________ account and has a normal __________ balance.

liability; debit asset; debit liability; credit asset; credit

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QUESTION 16

A shortened form of the ledger is called a __________. working account summary account chart of accounts T-account

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QUESTION 17

Which of the following is the record holding all the accounts, the changes in those accounts, and their balances?

Source document Journal Ledger Trial balance

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QUESTION 18

A sole proprietorship has the following transactions:

The business received $20,000 cash from the owner in exchange for capital. The business purchased $600 of office supplies on account. The business purchased $3,000 of furniture on account. The business performed services to various clients totaling $11,000 on account. The business paid $3,000 for salaries expense and $4,500 for rent expense. The business paid $600 to a supplier for the office supplies purchased earlier. The business collected $2,000 from one of its clients for services rendered earlier in the month.

At the end of the month, all journal entries are posted to the ledger. Accounts Payable will appear as which of the following?

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QUESTION 19

Which of the following accounts is an asset? Salaries expense Accounts payable Service revenue Prepaid expense

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QUESTION 20

The account title used for recording a written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is a(n) __________.

prepaid note

notes payable

notes receivable

accounts receivable

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