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Exam 2: Analyzing Transactions

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Question 41

Multiple Choice

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Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Debit or credit posting omitted.

A) Trial balance preparation errors
B) Account balance errors
C) Posting errors

D) A) and B)
E) All of the above

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Question 42

Multiple Choice

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In the chart of accounts, each account number has two digits. The first digit indicates the major account group to which the account belongs. Which of the following correctly identifies the major account groups typically represented by the numbers 1 through 5?

A) 1-Assets, 2-Liabilities, 3-Stockholders' Equity, 4-Expenses, 5-Revenues
B) 1-Assets, 2-Liabilities, 3-Stockholders' Equity, 4-Revenues, 5-Expenses
C) 1-Assets, 2-Stockholders' Equity, 3-Revenues, 4-Expenses, 5-Dividends
D) 1-Stockholders' Equity, 2-Dividends, 3-Revenues, 4-Expenses

E) A) and B)
F) All of the above

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Question 43

True/False

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A credit to the cash account will increase the account.

Accounts are classified in the ledger

When a business receives a bill from the utility company, no entry should be made until the invoice is paid.

Which of the following statements is not true about liabilities?

A notation in the post reference column of the general journal indicates that the amount has been posted to the ledger.

The double-entry accounting system records each transaction twice.

Posting a part of a transaction to the wrong account will cause the trial balance totals to be unequal.

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Balance entered on wrong side of account.

Expenses can result from

For each of the following accounts, indicate whether its normal balance is on the credit side or the debit side of the T account. -Accounts Receivable

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Column incorrectly added.

Which of the following entries records the payment of insurance for the current month?

$\begin{array} { | l | l | c | l | l | l | } \hline \text { March } & 10 & \text { Accounts Payable } & & 800 & \\\hline & & \text { Cash } & & & 800 \\\hline & & \text { Paid creditors on account. } & & & \\\hline\end{array}$ What effects does this journal entry have on the accounts?

Richardson Company has a condensed income statement as shown. $\begin{array} { | l | l | l | } \hline & \text { Year 2 } & \text { Year 1 } \\\hline \text { Sales } & \$ 150,000 & \$ 165,500 \\\hline \text { Total operating expenses } & 133,000 & 147,500 \\\hline \text { Net income } & 17,000 & 18,000 \\\hline\end{array}$ Using horizontal analysis, calculate the amount and percent change for sales. Round to one decimal place.

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Amount incorrectly entered on trial balance.

The process of recording a transaction in the journal is called

Which of the following accounts would be increased with a credit?

Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service.