10 Intermediate Accounting multiple choice questions need some answers.

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Question 1

The primary ledger that contains all of the Balance Sheet and Income Statement accounts is called the

A

Subsidiary ledger.

B

General ledger.

C

T-account.

D

General journal.

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Question 2

The process of transferring journal entries to the ledger is called

A

Posting.

B

Crediting.

C

Journalizing.

D

Ledgering.

Question 3

A subsidiary ledger

A

Groups together a small number of accounts with different characteristics.

B

Is the primary ledger that contains all of the Balance Sheet and Income Statement accounts.

C

Is a chart of accounts.

D

Groups together a large number of individual accounts with a common characteristic.

Question 4

A trial balance

A

Proves that entries have been recorded correctly.

B

Verifies whether debits equal credits and that the accounting system is in balance.

C

Should only be done once per accounting period.

D

Is prepared with debits in the right column and credits in the left column.

Question 5

Which of the following is used to incorporate the subsidiary ledger into the general ledger?

A

Chart of accounts.

B

Posting.

C

Controlling account.

D

Journal entries.

Question 6

The last step in preparing a trial balance requires

A

Adding columns together.

B

Listing all accounts and their balances used by the entity.

C

Debits on the right and credits on the left.

D

Comparing the debit total to the credit total.

Question 7

On January 1, Johns & Company had an accounts receivable balance of $50,000 and a cash balance of $400,000. On January 7, Johns received $5,000 in cash from prior credit sales. What are the resulting account balances for accounts receivable and cash, respectively?

A

$55,000 credit; $395,000 credit.

B

$45,000 credit; $400,000 debit.

C

$45,000 debit; $405,000 debit.

D

$55,000 debit; $395,000 debit.

Question 8

Fargo Co. purchased a piece of equipment with a $100,000 note payable. Prior to this transaction, Fargo had no other notes payable, and its equipment account had a balance of $500,000. What are the account balances for notes payable and equipment after the purchase?

A

Equipment: credit balance of $600,000; Notes Payable: debit balance of $100,000.

B

Equipment: debit balance of $600,000; Notes Payable: credit balance of $100,000.

C

Equipment: debit balance of $100,000; Notes Payable: credit balance of $100,000.

D

Equipment: credit balance of $100,000; Notes Payable: debit balance of $100,000.

Fact Pattern: In the current month, Cage Co. has performed the following transactions:

1. Purchased supplies worth $500 with $200 cash, the remaining on account.

2. Accrued and paid payroll expense of $5,000, with cash.

3. Paid interest on note payable of $1,000, with cash.

4. Sold all its marketable securities for $12,500 (originally purchased for $10,000).

Cage had a beginning balance of $10,000 in its cash account.

Question 9

Which of the following is the correct T-account presentation for Cage’s cash account at the end of the current month?

 

A

JE No.

Cash

JE No.

Beg Bal

10,000

|

4

2,500

|

200

1

|

5,000

2

|

1,000

3

End Bal

6,300

|

B

JE No.

Cash

JE No.

Beg Bal

|

10,000

4

12,500

|

200

1

|

5,000

2

|

1,000

3

End Bal

|

3,700

C

JE No.

Cash

JE No.

Beg Bal

10,000

|

4

12,500

|

200

1

|

5,000

2

|

1,000

3

End Bal

16,300

|

D

JE No.

Cash

JE No.

Beg Bal

10,000

|

1

200

|

12,500

4

2

5,000

|

3

1,000

|

End Bal

3,700

|

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Fact Pattern: In the current month, Cage Co. has performed the following transactions:

1. Purchased supplies worth $500 with $200 cash, the remaining on account.

2. Accrued and paid payroll expense of $5,000, with cash.

3. Paid interest on note payable of $1,000, with cash.

4. Sold all its marketable securities for $12,500 (originally purchased for $10,000).

Cage had a beginning balance of $10,000 in its cash account.

Question 10

Which beginning balances are missing from the information in the question that are required to calculate the ending balances of all accounts affected by Cage’s four transactions?

I.

Wages payable

II.

Supplies

III.

Cash

IV.

Accounts payable

V.

Notes payable

VI.

Interest expense

A

I, II, IV, and VI only.

B

II, IV, and VI only.

C

I, II, IV, and V only.

D

I, II, III, IV, V, and VI.