Intro to Accounting_40 MCQs

Question 1 of 40

2.5 Points

A credit to a liability account was posted to an expense account. This error would cause __________.

A. assets to be overstated

B. liabilities to be overstated

C. expenses to be overstated

D. None of the above answers are correct.

Question 2 of 40

2.5 Points

A credit to an asset account was posted to a liability account. This error would cause __________.

A. assets to be understated

B. liabilities to be overstated

C. capital to be understated

D. None of the above answers are correct.

Question 3 of 40

2.5 Points

Which of the following errors would cause the trial balance to be out of balance?

A. An entry is posted twice.

B. An entry is not posted at all.

C. A debit is entered as $200 and the credit is entered at $2,000.

D. None of the above answers are correct.

Question 4 of 40

2.5 Points

A credit to an asset account was posted to a revenue account. This error would cause __________.

A. assets to be overstated

B. revenue to be overstated

C. expenses to be overstated

D. Both A and C are correct.

Question 5 of 40

2.5 Points

A debit to an asset account was posted to a liability account. This error would cause __________.

A. assets to be understated

B. liabilities to be overstated

C. capital to be overstated

D. None of the above answers are correct.

Question 6 of 40

2.5 Points

A credit to a liability account was posted to an asset account. This error would cause __________.

A. liabilities to be overstated

B. liabilities to be understated

C. revenues to be overstated

D. revenues to be understated

Question 7 of 40

2.5 Points

The chart of accounts __________.

A. is a numbered list of all of the business' accounts

B. allows accounts to be located quickly

C. can be expanded as the business grows

D. All of the above answers are correct.

Question 8 of 40

2.5 Points

A credit to an asset account was posted to the capital account. This error would cause __________.

A. assets to be overstated

B. liabilities to be overstated

C. capital to be understated

D. Both A and C are correct.

Question 9 of 40

2.5 Points

A list of all the accounts from the ledger with their ending balances is called a __________.

A. normal balance

B. trial balance

C. chart of accounts

D. footing

Question 10 of 40

2.5 Points

Which of the following groups of accounts have a normal credit balance?

A. revenue, liabilities, and capital

B. assets, capital, and withdrawals

C. liabilities, expenses, and assets

D. assets, expenses, and withdrawals

Question 11 of 40

2.5 Points

Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits?

Cash

$1000

Equipment

500

Accounts Payable

350

Capital

900

Service Fees

1000

Salaries Expense

750

A. $3,250 debit, $3,250 credit

B. $1,125 debit, $1,125 credit

C. $4,500 debit, $4,500 credit

D. $2,250 debit, $2,250 credit

Question 12 of 40

2.5 Points

The purpose of the trial balance is __________.

A. to list all of the accounts in the chart of accounts

B. to report all accounts with zero balances

C. to prove that debits equal credits

D. to distribute it with the other financial reports

Question 13 of 40

2.5 Points

A debit to an expense account was posted to a revenue account. This error would cause __________.

A. assets to be overstated

B. liabilities to be overstated

C. revenue to be understated

D. None of the above answers are correct.

Question 14 of 40

2.5 Points

A debit to an expense account was posted to a revenue account. This error would cause __________.

A. assets to be overstated

B. liabilities to be overstated

C. revenue to be understated

D. None of the above answers are correct.

Question 15 of 40

2.5 Points

Which of the following is prepared last?

A. Balance Sheet

B. Income Statement

C. Statement of Owner's Equity

D. Trial Balance

Question 16 of 40

2.5 Points

Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits?

Cash

$1,100

Accounts Receivable

800

Capital

1,900

Withdrawals

500

Service Fees

1,000

Rent Expense

500

A. $2,900 debit, $2,900 credit

B. $3,900 debit, $3,900 credit

C. $2,000 debit, $2,000 credit

D. $1,200 debit, $1,200 credit

Question 17 of 40

2.5 Points

Which of the following is not a financial statement?

A. Balance sheet

B. Income statement

C. Statement of owner's equity

D. Trial balance

Question 18 of 40

2.5 Points

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

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 answers are correct.

Question 19 of 40

2.5 Points

A credit to an asset account was posted to the capital account. This error would cause __________.

A. assets to be overstated

B. liabilities to be overstated

C. capital to be understated

D. Both A and C are correct.

Question 20 of 40

2.5 Points

A debit to a liability account was posted to the capital account. This error would cause __________.

A. assets to be overstated

B. liabilities to be overstated

C. capital to be overstated

D. None of the above answers are correct.

Question 21 of 40

2.5 Points

Which of the following entries records the owner taking cash for personal use?

A. debit Wage Expense; credit Cash

B. debit Capital; credit Cash

C. No entry is necessary since the owner owns the cash and the entire business.

D. debit Withdrawals; credit Cash

Question 22 of 40

2.5 Points

A credit to an asset account was posted to a revenue account. This would cause __________.

A. assets to be understated

B. liabilities to be understated

C. capital to be understated

D. revenue to be overstated

Question 23 of 40

2.5 Points

A credit to an asset account was posted to a liability account. This would cause __________.

A. assets to be understated

B. liabilities to be overstated

C. capital to be overstated

D. revenue to be overstated

Question 24 of 40

2.5 Points

A debit to a revenue account was posted to an expense account. This would cause __________.

A. expenses to be overstated

B. revenue to be understated

C. expenses to be understated

D. capital to be overstated

Question 25 of 40

2.5 Points

The purpose of posting is to __________.

A. list the transactions in chronological order in the journal

B. provide an explanation of the transaction

C. update the account balances in the ledger

D. correct a previous entry

Question 26 of 40

2.5 Points

The posting reference column on the general journal __________.

A. shows which transactions have been posted to the ledger

B. displays to which accounts the transactions have been posted

C. allows us to cross reference to the general ledger

D. All of the above answers are correct.

Question 27 of 40

2.5 Points

During the month of January, Katelyn invested $11,000 in starting her legal practice. The proper journal entry would be __________.

A. Cash, debit $11,000; Katelyn's Capital, credit $11,000

B. Accounts Payable, debit $11,000; Cash, credit $11,000

C. Cash, debit $11,000; Revenue, credit $11,000

D. Katelyn's Capital, debit $11,000; Cash, credit $11,000

Question 28 of 40

2.5 Points

Posting is performed by transferring information from the journal to the __________.

A. ledger

B. trial balance

C. balance sheet

D. income statement

Question 29 of 40

2.5 Points

A journal entry affecting three or more accounts is called a __________.

A. multi-level entry

B. multi-step entry

C. compound entry

D. simple entry

Question 30 of 40

2.5 Points

Business transactions are first recorded in the __________.

A. ledger

B. journal

C. trial balance

D. balance sheet

Question 31 of 40

2.5 Points

The process that begins with recording business transactions and includes the completion of the financial statements is the __________.

A. calendar year

B. natural business year

C. fiscal year

D. accounting cycle

Question 32 of 40

2.5 Points

A debit to a liability account was posted to a revenue account. This would cause __________.

A. assets to be overstated

B. liabilities to be overstated

C. capital to be overstated

D. revenue to be overstated

Question 33 of 40

2.5 Points

A debit to a liability account was posted to an expense account. This would cause __________.

A. assets to be overstated

B. liabilities to be understated

C. owner's equity to be overstated

D. expenses to be overstated

Question 34 of 40

2.5 Points

The general journal __________.

A. is the book of original entry

B. is the book of final entry

C. contains account balances

D. is completed after the general ledger

Question 35 of 40

2.5 Points

The posting reference column in the ledger is __________.

A. used to record the journal and page number the transactions originated

B. used to record the ledger number

C. used to record the date

D. not used

Question 36 of 40

2.5 Points

A credit to a liability account was posted to an owner's equity account. This would cause __________.

A. assets to be overstated

B. liabilities to be understated

C. owner's equity to be understated

D. net income to be overstated

Question 37 of 40

2.5 Points

The twelve-month period a business chooses for its accounting period is a(n. __________.

A. calendar year

B. accounting period

C. fiscal year

D. accounting cycle

Question 38 of 40

2.5 Points

Revenue is traditionally recognized in the accounting records when __________.

A. cash is received

B. services are rendered

C. it is incurred

D. None of the above answers are correct.

Question 39 of 40

2.5 Points

Which of the following entries would record the payment of a utility bill?

A. debit Utilities Expense; credit Cash

B. debit Cash; credit Utilities Expense

C. debit Utilities Expense; credit Accounts Payable

D. debit Accounts Receivable; credit Utilities Expense

Question 40 of 40

2.5 Points

Which of the following entries records the acquisition of office supplies for cash?

A.

Office Supplies

5,000

Cash

5,000

B.

Office Supplies

5,000

Accounts Payable

5,000

C.

Equipment

5,000

Accounts Payable

5,000

D.

Equipment

5,000

Accounts Receivable

5,000