Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. Chapter 2 1

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 1. Which sequence correctly summarizes the accounting process? a.Journalize transactions, post to the accounts, prepare a trial balance b.Journalize transactions, prepare a trial balance, post to the accounts c.Post to the accounts, journalize transactions, prepare a trial balance d.Prepare a trial balance, journalize transactions, post to the accounts 2

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 2. The left side of an account is used to record which of the following? a.Debit or credit, depending on the type of account b.Increases c.Credits d.Debits 3

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 3. Supposing Fitch & Son has receivables of $65,000, furniture totaling $205,000, and cash of $52,000. The business has $189,000 in equity. How much are Fitch’s liabilities? a.$ 28,000 b.$133,000 c.$190,000 d.$322,000 4

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 4. Your business purchased supplies of $1,500 on account. The journal entry to record this transaction is as follows: a.Inventory 1,500 Accounts payable 1,500 b.Accounts payable 1,500 Supplies 1,500 c.Supplies 1,500 Accounts payable 1,500 d.Supplies 1,500 Accounts receivable 1,500 5

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 5. Your business purchased supplies of $1,500 on account. Which journal entry records your payment for the supplies purchase? a.Accounts payable1,500 Accounts receivable1,500 b.Accounts payable1,500 Cash1,500 c.Cash1,500 Accounts payable1,500 d.Supplies1,500 Cash1,500 6

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. a. b. c. d. 6. Posting a $1,500 purchase of supplies on account appears as follows: 7 Cash Supplies Accounts payable Supplies Accounts receivable Supplies Accounts payable 1,500

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 7. The detailed record of the changes in a particular asset, liability, or equity is called a(n): a.ledger. b.journal. c.account. d.trial balance. 8

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 8. Samit Copies recorded a cash collection on account by debiting Cash and crediting Accounts payable. What will the trial balance show for this error? a.Too much for cash b.Too much for liabilities c.Too much for expenses d.The trial balance will not balance 9

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 9. Janet Hessy, Attorney, P.C. began the year with total assets of $129,000, liabilities of $77,000, and equity of $52,000. During the year, the business earned revenue of $113,000 and paid expenses of $34,000. How much is the business’s equity at year-end? a.$ 68,000 b.$ 97,000 c.$131,000 d.$165,000 10

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 10. Tony Vanck, Attorney, P.C. began the year with total assets of $126,000, liabilities of $74,000, and equity of $52,000. During the year the business earned revenue of $110,000 and paid expenses of $33,000. How would Tony Vanck record expenses paid of $33,000? 11 a.Cash33,000 Expenses33,000 b.Accounts payable33,000 Cash 33,000 c.Expenses33,000 Accounts payable 33,000 d.Expenses33,000 Cash33,000

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 12 Copyright All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.