1. Classify the following as:
Asset, Liability, Owner’s Equity,
Revenue or Expense and give the
Normal Balance
Cash
Accounts Receivable
Accounts Payable
Drawing
Sales
Rent
2. When cash is paid on account,
Accounts Payable is?
a. Increased by a debit
b. Decreased by a credit
c. Increased by a credit
d. Decreased by a debit
3. When cash is received on
account
a. AR is decreased and cash is increased.
b. Sales is increased and cash is increased.
c. AR is increased and cash is increased.
d. Sales is decreased and cash is increased.
4. The journal entry when an
owner invests in the
business is
a. debit Capital, credit cash
b. debit Cash, Credit Accounts Payable
c. debit Cash; credit Capital
d. debit Cash; credit Drawing
5. Match the following
Account Number
500
200
300
100
400
Classification
Asset
Liability
Capital
Revenue
Expense
6. A debit may signify
a. a decrease in an asset.
b. an increase in a liability.
c. an increase in an asset.
d. a decrease in an expense
7. The normal balances of assets,
liabilities and owner’s equity
are respectively,
a. debit, debit and credit.
b. debit, credit and debit.
c. credit, debit and debit.
d. debit, credit and credit.
8. If net sales is $10,000 and
operating expenses are $7,500
your component percentage for
net income is
a. 75%
b. 100%
c. 25%
d. 20%
9. The recording of debit and
credit parts of a transaction is
called
a. matching revenue to expense
b. double-entry accounting
c. closing the books
d. objective evidence
10. The Petty Cash account is
debited
a. when you replenish the Petty Cash Account
b. when you establish the Petty Cash Account
11.
What is the ending balance on the
bank reconciliation using a $10 bank
fee, $250.00 in outstanding checks and
$500.00 outstanding deposit
Checkbook Balance $5,010
Bank Balance
$4,750
12. Net Income is entered in the
worksheet’s?
a. Income Statement Debit and Balance Sheet Credit
sides
b. Income Statement Credit and Balance Sheet Debit
sides
13.The adjusting entry for
insurance is
a. Credit Insurance Expense; Debit Prepaid
Insurance
b. Debit Insurance Expense; Credit Cash
c. Debit Insurance Expense; Credit Prepaid
Insurance
d. Debit Cash; credit Prepaid Insurance
14. To close the sales account
a. Debit Sales; credit Cash
b. Debit Income Summary; credit Sales
c. debit Sales; credit Income Summary
d. Debit Cash; credit Sales
15. Revenue from Services
would appear on the worksheet
in the
a. Income Statement Cr. column.
b. Adjusted Trial Balance Dr. column.
c. Balance Sheet Cr. column.
d. Adjustments Dr. column.
16. Temporary accounts closed at
the end of the accounting cycle
a. Cash and Capital.
b. Revenue and expense accounts and the owner’s
drawing account.
c. contra accounts.
d. open accounts.
TRUE OR FALSE
17. Only the person a check is made out to can
own the check.
18. If the person a check is made out to simply
signs their name on the back of the check
that is called a blank endorsement.
19. A blank endorsement transfers ownership
to whoever is in possession of the check
20. A Balance Sheet reports a business’s financial
condition on a single date.
21. When the owner withdraws cash the owner’s
drawing account should be posted with a credit.
22. The formula for calculating Net Income component
percentage is Net Income/Net Sales.
23. Proving cash means comparing the cash balance in
the general ledger to the cash balance in your check
book.
24.Permanent accounts accumulate balances while
temporary accounts are zeroed out at the end of the
fiscal period.
25. If Sales are greater than expenses you have Net Income
therefore for Net Income on the Income Statement
credits to sales would be greater than debits to
expenses.
26.Closing entries are made at the end of the accounting
period to transfer balances of temporary accounts to the
owner’s capital account, closing Sales, Expense, Net
Income and Drawing).
27. A worksheet is used to plan adjustments and sort
financial information after publishing financial
statements
28.A balance sheet reports a business’s financial progress
over a period of time.
29.Temporary accounts will begin each fiscal period
with a zero balance.
30.A journal entry or transaction is a business activity
with a debit and credit that will change assets,
liabilities or owner’s equity.
31. Assets are what you owe and liabilities are what you
own.
32. In the Accounting Equation Assets=Liabilities +
Owner’s Equity, Owner’s Equity can not be negative.
33. A chart of accounts is a list of accounts used by a
business and only lists the account name and number.
34. The left side of the T-account is the credit side.
35. Transactions are recorded in chronological order in a
journal and the accounting system will post each entry
immediately to the individual ledger and every ledger
will keep a running balance of each account.
36. Double lines rules across a journal or worksheet
indicate the amounts have been verified as correct
37. An cash payment entry was posted in error to Rent
Expense instead of Repair Expense. The correction
would be to Debit Repair Expense and credit Rent
Expense
38. Assets are listed on the Balance sheet in Alphabetical
order and Expenses are listed on the Income
Statement in Chronological Order.
39. A check with a future date is called a post-dated
check, if it is submitted before the date on the check
the bank may refuse to pay and it would be considered
a dishonored check.
40.Closing entries make all revenue, expense and
drawing accounts zero
41.A business owned by one person is called a
proprietorship.
42.The Father of Accounting is known to be Mario Luigi
43. Match the following
Source Doc
C
R
T
S
M
A.
B.
C.
D.
E.
Classification
Sale on Account, Dr. AR, Cr. Sale
Receipt, Debit Cash
Tape, Dr. Cash, Cr. Sale
Memorandum
Check, Credit Cash