Question 1

McNally Industries has a condensed income statement as shown. ​
 Using horizontal analysis,calculate the amount and percent change for sales.Round percentages to one decimal place.

Accepted Answer

A)   $32,500,19.6%
B)   $(32,500) ,(19.6) %
C)   $32,500,16.4%
D)   $(32,500) ,(16.4) %E) C) and D)
F) B) and C)

Question 2

Which of the following errors,each considered individually,would cause the trial balance totals to be unequal?

Accepted Answer

A)   A transaction was not posted.
B)   A payment of $67 for insurance was posted as a debit of $76 to Prepaid Insurance and a credit of $76 to Cash.
C)   A payment of $4,450 to a creditor was posted as a debit of $4,500 to Accounts Payable and a credit of $450 to Cash.
D)   Cash received from customers on account was posted as a debit of $720 to Cash and a credit of $720 to Accounts Payable.E) None of the above
F) B) and C)

Question 3

All stockholders' equity accounts record increases to the accounts with credits.

Accepted Answer

A) True 
 B)False

Question 4

Liabilities are debts owed by the business entity.

Accepted Answer

A) True 
 B)False

Question 5

Prepare a trial balance,listing the following accounts in proper sequence.The accounts (all normal balances)were taken from the ledger of Sophie Designs Co.on April 30.

Accepted Answer

The answer of Prepare a trial balance,listing the following accounts...

Question 6

Which of the following types of accounts have a normal credit balance?

Accepted Answer

A)   assets and liabilities
B)   liabilities and expenses
C)   revenues and common stock
D)   common stock and dividendsE) A) and B)
F) None of the above

Question 7

Transactions are listed in the journal chronologically.

Accepted Answer

A) True 
 B)False

Question 8

The double-entry accounting system records each transaction twice.

Accepted Answer

A) True 
 B)False

Question 9

Accounts in the ledger are usually maintained in alphabetical order.

Accepted Answer

A) True 
 B)False

Question 10

The chart of accounts is designed to

Accepted Answer

A)   alphabetize the accounts to make reading easier for financial statement users
B)   organize accounts in order of dollar amount to simplify the accounting information for users
C)   summarize the transactions and determine ending account balances
D)   meet the information needs of a company's managers and other users of its financial statementsE) C) and D)
F) A) and B)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Postings made to standard account forms show a new balance after each entry.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following will increase stockholders' equity?

Accepted Answer

A)   ​expenses > revenues
B)   ​the company pays dividends
C)   ​revenues > expenses
D)   ​cash is received from customers on accountE) A) and B)
F) A) and C)

Question 14

An account is said to have a debit balance if

Accepted Answer

A)   the amount of the debits exceeds the amount of the credits
B)   there are more entries on the debit side than on the credit side
C)   there are more entries on the credit side than on the debit side
D)   the first entry of the accounting period was posted on the debit sideE) A) and B)
F) A) and C)

Question 15

The normal balance of an expense account is a credit.

Accepted Answer

A) True 
 B)False

Question 16

What is the posting reference that will be found in the prepaid insurance account?

Accepted Answer

A)   11
B)   15
C)   3
D)   13E) None of the above
F) All of the above

Question 17

Dividends decrease stockholders' equity and are listed on the income statement as a deduction from revenue.

Accepted Answer

A) True 
 B)False

Question 18

Revenue accounts are increased by credits.

Accepted Answer

A) True 
 B)False

Question 19

That the total dollar amount of the debits equals the total dollar amount of the credits in the ledger accounts can be verified through a(n) :

Accepted Answer

A)   chart of accounts
B)   trial balance
C)   income statement
D)   balance sheetE) All of the above
F) A) and B)

Question 20

Which of the following groups of accounts have a normal debit balance?

Accepted Answer

A)   revenues,liabilities,and stockholders' equity
B)   stockholders' equity and assets
C)   liabilities and stockholders' equity
D)   assets and expensesE) C) and D)
F) B) and C)

Exam 2: Analyzing Transactions

Which of the following groups of accounts have a normal debit balance?

Correct AnswerverifiedShow Answer

Which of the following errors,each considered individually,would cause the trial balance totals to be unequal?

Correct AnswerverifiedShow Answer

The chart of accounts is designed to

Correct AnswerverifiedShow Answer

Revenue accounts are increased by credits.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Liabilities are debts owed by the business entity.

Correct AnswerverifiedShow Answer

What is the posting reference that will be found in the prepaid insurance account?

Correct AnswerverifiedShow Answer

McNally Industries has a condensed income statement as shown. ​ Using horizontal analysis,calculate the amount and percent change for sales.Round percentages to one decimal place.

Correct AnswerverifiedShow Answer

Accounts in the ledger are usually maintained in alphabetical order.

Correct AnswerverifiedShow Answer

Prepare a trial balance,listing the following accounts in proper sequence.The accounts (all normal balances)were taken from the ledger of Sophie Designs Co.on April 30.

Correct AnswerverifiedShow Answer

Which of the following types of accounts have a normal credit balance?

Correct AnswerverifiedShow Answer

Dividends decrease stockholders' equity and are listed on the income statement as a deduction from revenue.

Correct AnswerverifiedShow Answer

An account is said to have a debit balance if

Correct AnswerverifiedShow Answer

Which of the following will increase stockholders' equity?

Correct AnswerverifiedShow Answer

All stockholders' equity accounts record increases to the accounts with credits.

Correct AnswerverifiedShow Answer

Postings made to standard account forms show a new balance after each entry.

Correct AnswerverifiedShow Answer

The double-entry accounting system records each transaction twice.

Correct AnswerverifiedShow Answer

Transactions are listed in the journal chronologically.

Correct AnswerverifiedShow Answer

The normal balance of an expense account is a credit.

Correct AnswerverifiedShow Answer

That the total dollar amount of the debits equals the total dollar amount of the credits in the ledger accounts can be verified through a(n) :

Correct AnswerverifiedShow Answer

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McNally Industries has a condensed income statement as shown. Using horizontal analysis,calculate the amount and percent change for sales.Round percentages to one decimal place.

Correct Answer
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