Q: Which of the following is a correct formula for analyzing the Accounts Receivable account?

$$\text{Ending balance} = \text{Beginning balance} + \text{Sales on account} - \text{Collections on account}$$

Question 1

Which of the following best describes the accounting equation?

Accepted Answer

$$Assets = Liabilities + Stockholders' Equity$$

Question 2

Alladin Travel, Inc. purchases office supplies for $3,700 on account. Which accounts are affected and how?

Accepted Answer

Increase Supplies (asset) and increase Accounts Payable (liability)

Question 3

Which of the following is NOT considered an asset account?

Accepted Answer

Notes Payable

Question 4

A company performs services for a customer on account. What is the immediate effect on the accounting equation?

Accepted Answer

Increase Assets and increase Stockholders' Equity

Question 5

Which of the following journal entries correctly records the payment of $1,900 on account?

Accepted Answer

Debit Accounts Payable $$1,900; Credit Cash 1$$,900

Question 6

If a company pays $2,700 for rent, salaries, and utilities, what is the effect on the accounting equation?

Accepted Answer

Decrease Assets and decrease Stockholders' Equity

Question 7

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

Accepted Answer

Service Revenue

Question 8

A company issues common stock for $50,000 cash. What is the correct journal entry?

Accepted Answer

Debit Cash $$50,000; Credit Common Stock 50$$,000

Question 9

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

Accepted Answer

Each transaction affects at least two accounts

Question 10

If the beginning cash balance is $$1,000, cash receipts during the month are 8$$,000, and the ending cash balance is $3,000, what were the total cash payments during the month?

Accepted Answer

$$6,000$$

Question 11

Which of the following is a correct formula for analyzing the Accounts Receivable account?

Accepted Answer

$$	ext{Ending balance} = 	ext{Beginning balance} + 	ext{Sales on account} - 	ext{Collections on account}$$

Question 12

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

Accepted Answer

Prepare the income statement

Question 13

A company declares and pays a $2,100 dividend. What is the effect on the accounting equation?

Accepted Answer

Decrease Assets and decrease Stockholders' Equity

Question 14

Which of the following accounts normally has a debit balance?

Accepted Answer

Dividends

Question 15

If a company sells land for the same amount it paid for it, what is the effect on the accounting equation?

Accepted Answer

Increase Cash and decrease Land; no effect on total assets

Question 16

Which of the following is an example of a liability account?

Accepted Answer

Notes Payable

Question 17

What is the primary purpose of preparing a trial balance?

Accepted Answer

To ensure that debits equal credits

Question 18

Which of the following best describes machine learning in accounting?

Accepted Answer

A process where machines learn from data to identify patterns and make decisions without explicit programming

Question 19

If the trial balance does not balance and the difference is divisible by 9, what type of error is most likely present?

Accepted Answer

Transposition error

Question 20

Which of the following is the correct order for listing accounts in a trial balance?

Accepted Answer

Assets, Liabilities, Stockholders' Equity, Revenues, Expenses

Financial Accounting: Chapter 2 – Transaction Analysis

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