chapters 3-5 review. a business transaction affects at least how many accounts? a.one b.two c.three...

Chapters 3-5 Review

A business transaction affects at least how many accounts?

A. OneB. TwoC. ThreeD. Four

1

A business transaction affects at least how many accounts?

A. OneB. TwoC. ThreeD. Four

Double-entry accounting requires that the Debits equal

the Credits – must have at least two accounts, may have more –

must keep the equation in balance

1

The owner’s claims to a business’ assets are:

A. AssetsB. LiabilitiesC. Owner’s EquityD. Cash in Bank

2

The owner’s claims to a business’ assets are:

A. AssetsB. LiabilitiesC. Owner’s EquityD. Cash in Bank

2

The account Accounts Receivable is an example of:

A. An AssetB. A LiabilityC. Owner’s EquityD. None of the above

3

The account Accounts Receivable is an example of:

A. An AssetB. A LiabilityC. Owner’s EquityD. None of the above

3

All of the following account titles are assets titles except:

A. Office FurnitureB. Accounts PayableC. Cash in BankD. Equipment

4

All of the following account titles are assets titles except:

A. Office FurnitureB. Accounts PayableC. Cash in BankD. Equipment

4

If the creditor's financial claim to property totals $1,000 and the

owner's financial claim to property totals $11,000, the property value is:

A. $10,000B. $11,000C. $12,000D. $1,000

5

If the creditors’ financial claim to property totals $1,000 and the

owner's financial claim to property totals $11,000, the property value is:

A. $10,000B. $11,000C. $12,000D. $1,000

A = L + OEAssets are propertyLiabilities are creditors’ financial

claim to the propertyOwner’s Equity is the owner’s financial claim to the property

5

Each of the following is a business expense except a

payment for:

A. AdvertisingB. Monthly rentC. Utility billsD. Equipment

6

Each of the following is a business expense except a

payment for:

A. AdvertisingB. Monthly rentC. Utility billsD. Equipment

6

A purchase of a desk on account will increase Office Furniture and

will also increase:

A. Cash in BankB. Marie Krabish, CapitalC. Accounts ReceivableD. Accounts Payable

7

A purchase of a desk on account will increase Office Furniture and

will also increase:

A. Cash in BankB. Marie Krabish, CapitalC. Accounts ReceivableD. Accounts Payable

7

If Paul Abdou deposits $30,000 in a checking account in the

name of his business, the two accounts affected are:

A. Cash in Bank & Accounts PayableB. Cash in Bank & Accounts ReceivableC. Cash in Bank & Paul Abdou, WithdrawalsD. Cash in Bank & Paul Abdou, Capital

8

If Paul Abdou deposits $30,000 in a checking account in the

name of his business, the two accounts affected are:

A. Cash in Bank & Accounts PayableB. Cash in Bank & Accounts ReceivableC. Cash in Bank & Paul Abdou, WithdrawalsD. Cash in Bank & Paul Abdou, Capital

8

A business transaction can affect two accounts on the same side of the accounting equation and still

leave the equation in balance.

A. TrueB. False

9

A business transaction can affect two accounts on the same side of the accounting equation and still

leave the equation in balance.

A. TrueB. False

Example: Receive cash on accounts receivable

Example: Write a check to purchaseoffice equipment

9

The list of all the accounts used by a business to record its

transactions is:

A. Double-entry accountingB. The normal balanceC. T accountsD. The chart of accounts

10

The list of all the accounts used by a business to record its

transactions is:

A. Double-entry accountingB. The normal balanceC. T accountsD. The chart of accounts

10

A chart of accounts is limited to 50 accounts.

A. TrueB. False

11

A chart of accounts is limited to 50 accounts.

A. TrueB. False

11

The amount entered on the left side of an account is:

A. The debitB. The normal balanceC. The account with the lowest account #D. The asset account

12

The amount entered on the left side of an account is:

A. The debitB. The normal balanceC. The account with the lowest account #D. The asset account

12

A credit to an account always decreases it, a debit to an

account always increases it.

A. TrueB. False

13

A credit to an account always decreases it, a debit to an

account always increases it.

A. TrueB. False

See the tan sheet – review all

13

The normal balance (increase) side of any asset account is the:

A. Debit sideB. Credit sideC. Right SideD. None of these

14

The normal balance (increase) side of any asset account is the:

A. Debit sideB. Credit sideC. Right SideD. None of these

14

The normal balance (increase) side of any liability account is the:

A. Debit sideB. Credit sideC. Left sideD. None of these

15

The normal balance (increase) side of any liability account is the:

A. Debit sideB. Credit sideC. Left sideD. None of these

15

The normal balance (increase) side of the owner’s equity account is the:

A. Debit sideB. Credit sideC. Left sideD. None of these

16

The normal balance (increase) side of the owner’s equity account is the:

A. Debit sideB. Credit sideC. Left sideD. None of these

16

Debits must equal credits:

A. In a T accountB. On the equation’s left sideC. One the equation’s right sideD. For each transaction

17

Debits must equal credits:

A. In a T accountB. On the equation’s left sideC. One the equation’s right sideD. For each transaction

17

How many steps are there to analyzing a business transaction?

A. TwoB. FourC. SixD. Eight

18

How many steps are there to analyzing a business transaction?

A. TwoB. FourC. SixD. Eight

1) Identify the accounts affected2) Classify the accounts affected3) Determine the amount of the

increase or decrease for each account4) Make sure the accounting equation

remains in balance

18

An expense account is a:

A. Permanent liability accountB. Permanent asset accountC. Temporary owner’s equity accountD. Temporary revenue account

19

An expense account is a:

A. Permanent liability accountB. Permanent asset accountC. Temporary owner’s equity accountD. Temporary revenue account

See the tan sheet

19

The following applies to Temporary accounts :

A. Balances are carried forward to the next accounting period

B. Balances are transferred to capital and start over at a zero balance for the next accounting period

C. They are the only accounts listed on the Chart of Accounts

D. Balances are always a credit since they are actually Capital accounts

20

The following applies to Temporary accounts :

A. Balances are carried forward to the next accounting period

B. Balances are transferred to capital and start over at a zero balance for the next accounting period

C. They are the only accounts listed on the Chart of Accounts

D. Balances are always a credit since they are actually Capital accounts

20

Are you ready for the test?