Question 1

Which of the following best describes the double-entry accounting system?

Accepted Answer

Each transaction must affect at least two accounts, and debits must always equal credits.

Question 2

A company purchases office supplies on account for $800. Which of the following journal entries correctly records this transaction?

Accepted Answer

Debit Office Supplies $$800; Credit Accounts Payable 800$$

Question 3

Which of the following accounts normally has a credit balance?

Accepted Answer

Common Stock

Question 4

If a company pays $2,000 cash for rent expense, what is the effect on the accounting equation?

Accepted Answer

Assets decrease by $$2,000; Equity decreases by 2$$,000

Question 5

Which of the following is the correct sequence of steps in the accounting cycle?

Accepted Answer

Analyze transactions, journalize, post, trial balance, adjusting entries, adjusted trial balance, financial statements, closing entries, post-closing trial balance

Question 6

A company receives $5,000 cash from a client for services to be performed in the future. What is the correct journal entry?

Accepted Answer

Debit Cash $$5,000; Credit Unearned Revenue 5$$,000

Question 7

Which of the following statements about the trial balance is TRUE?

Accepted Answer

A trial balance may balance even if a transaction is not journalized.

Question 8

If the sum of debit entries in an account exceeds the sum of credit entries, the account will have:

Accepted Answer

A debit balance

Question 9

Which of the following transactions will NOT affect the trial balance totals?

Accepted Answer

A correct journal entry is posted twice

Question 10

Which of the following best describes the purpose of the general journal?

Accepted Answer

It provides a chronological record of all transactions and shows the debit and credit effects on specific accounts.

Question 11

A company collected $2,000 cash from a client for services previously performed on account. What is the effect on the accounts?

Accepted Answer

Debit Cash $$2,000; Credit Accounts Receivable 2$$,000

Question 12

Which of the following accounts would NOT normally have a debit balance?

Accepted Answer

Service Revenue

Question 13

What is the effect of a debit entry to the Salaries Expense account?

Accepted Answer

It increases the Salaries Expense account.

Question 14

Which of the following is NOT a limitation of the trial balance?

Accepted Answer

It will detect all errors in the accounting records.

Question 15

A company issues common stock for $10,000 cash. Which accounts are affected and how?

Accepted Answer

Debit Cash $$10,000; Credit Common Stock 10$$,000

Question 16

Which of the following best describes the normal balance for liability accounts?

Accepted Answer

Credit

Question 17

If a company pays $1,200 for employee salaries, which of the following is the correct journal entry?

Accepted Answer

Debit Salaries Expense $$1,200; Credit Cash 1$$,200

Question 18

Which of the following is NOT a step in the journalizing and posting process?

Accepted Answer

Prepare the financial statements

Question 19

Which of the following best describes the purpose of posting in the accounting process?

Accepted Answer

Transferring journal entry information to the ledger accounts

Recording Transactions: Debits, Credits, Journals, and Ledgers in Financial Accounting

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