Chapter 2 Quiz

 

1. Purchasing land with cash would have what effect on the accounting equation?

1. Total assets increase.
2. Total assets decrease.
3. Total liabilities increase.
4. No effect.

 

2. A debit to Salaries Expense will:

1. Increase stockholders’ equity.
2. Increase assets. 
3. Decrease liabilities.
4. Decrease stockholders’ equity.

 

3. All transactions related to a particular item over a period of time are summarized in a(n):

1. Schedule.
2. Entry.
3. Account.
4. Chart.

 

4. Providing services to customers for cash would be recorded with a:

1. Debit to Accounts Receivable.
2. Credit to Cash.
3. Credit to Service Revenue.
4. Debit to Service Expense.

 

5. The process of transferring debit and credit information from the general journal to the general ledger is known as:

1. Posting.Correct
2. Journalizing.
3. Charting.
4. Processing.

 

6. A credit is used to decrease which of the following accounts?

1. Salaries Payable.
2. Cash.
3. Service Revenue.
4. Common Stock.

 

7. Which of the following correctly describes a list of accounts and their balances, showing that total debits equal total credits?

1. Chart of accounts.
2. Journal.
3. Trial balance.
4. General ledger.

 

8. The process of transferring debit and credit information from the general journal to the general ledger is known as:

1. Journalizing.
2. Charting.
3. Processing.
4. Posting.

 

9. Account balances in the general ledger are updated for transactions through the process of:

1. Journalizing.
2. Posting.
3. Balancing.
4. Analyzing.

 

10.  A list of all account names used to record transactions of a company is referred to as a:

1. Financial statement.
2. Transaction.
3. Chart of accounts.
4. Journal.

 

11. After transactions are recorded in the journal, they are posted to the:

1. Chart of accounts.
2. Trial balance.
3. Financial statements.
4. General ledger.

 

12. Which of the following transactions decreases stockholders’ equity?

1. Pay salaries for the current period.
2. Repay amounts previously borrowed from the bank.
3. Purchase supplies on account.
4. Purchase office supplies on account.

 

13. Providing services to customers for cash would be recorded with a:

1. Credit to Service Revenue.
2. Debit to Service Expense.
3. Debit to Accounts Receivable.
4. Credit to Cash.

 

14.  Which of the following transactions causes a decrease in stockholders’ equity?

1. Paying advertising expense for the current month.
2. Providing services to customers for cash.
3. Repaying amount borrowed from the bank.
4. Providing services to customers on account.

 

15. Which of the following is possible for a particular business transaction?

1. Decrease assets; increase stockholders’ equity.
2. Decrease assets; decrease liabilities.
3. Increase assets; decrease liabilities.
4. Decrease liabilities; increase expenses.

 

16. Which of the following transactions causes a decrease in total liabilities?

1. Paying dividends to stockholders.
2. Repay amounts previously borrowed from the bank.
3. Paying maintenance expenses for the current month.
4. Providing services to customers on account.

 

17. Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits?

1. Use source documents to determine accounts affected by the transaction.
2. Post the transaction to the T-account in the general ledger.
3. Prepare a trial balance.
4. Analyze the impact of the transaction on the accounting equation.

 

18. Which of the following is true about a trial balance?

1. Total debit amounts should always equal total credit amounts.
2. The trial balance shows the change in all account balances over the accounting period.
3. Only balance sheet accounts are shown.
4. Only income statement accounts are shown.

 

19. Which of the following accounts normally has a debit balance?

1. Service Revenue.
2. Supplies.
3. Common Stock.
4. Accounts Payable.

 

20. Which of the following transactions decreases stockholders’ equity?

1. Pay salaries for the current period.
2. Purchase supplies on account.
3. Purchase office supplies on account.
4. Repay amounts previously borrowed from the bank.

 

21 Which of the following accounts normally has a debit balance?

1. Accounts Payable.
2. Common Stock.
3. Supplies.
4. Service Revenue.

 

22. Which of the following transactions decreases total assets?

1. Purchase supplies on account.
2. Pay dividends to stockholders.
3. Receive cash from customers for sales in the current period.
4. Receive a utility bill but do not pay it.

 

23. Providing services to customers for cash would have what effect on the accounting equation?

1. Increase total liabilities.
2. Increase total assets.
3. Increase total assets and total stockholders’ equity.
4. Increase total stockholders’ equity.

 

24. Which of the following transactions causes a decrease in stockholders’ equity?

1. Paying advertising expense for the current month.
2. Providing services to customers for cash.
3. Repaying amount borrowed from the bank.
4. Providing services to customers on account.

 

25. Which of the following does not represent an external business transaction?

1. Expiration of an insurance policy over time.
2. Providing services to customers.
3. Purchasing office supplies.
4. Paying employees’ salaries.

 

26. A credit to Cash will:

1. Increase assets.
2. Decrease assets.
3. Decrease liabilities.
4. Decrease stockholders’ equity.

 

27. Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits?

1. Analyze the impact of the transaction on the accounting equation.
2. Use source documents to determine accounts affected by the transaction.
3. Prepare a trial balance.
4. Post the transaction to the T-account in the general ledger.

 

28 . Which of the following is true about a trial balance?

1. Only balance sheet accounts are shown.
2. Total debit amounts should always equal total credit amounts.
3. The trial balance shows the change in all account balances over the accounting period.
4. Only income statement accounts are shown.

 

29. After transactions are recorded in the journal, they are posted to the:

1. Chart of accounts.
2. General ledger.
3. Financial statements.
4. Trial balance.

 

30. Which of the following transactions increases total assets?

1. Purchase supplies for cash.
2. Collect cash from customer for services provided on account last month.
3. Provide services to customers on account.
4. Pay dividends to current stockholders.

 

31. Which of the following transactions increases total liabilities?

1. Pay for rent in the current period.
2. Purchase office supplies on account.
3. Pay dividends to stockholders.
4. Purchase equipment with cash.

 

32. Which of the following transactions causes a decrease in total liabilities?

1. Providing services to customers on account.
2. Paying maintenance expenses for the current month.
3. Repay amounts previously borrowed from the bank.
4. Paying dividends to stockholders.

 

33. Which of the following correctly describes a list of accounts and their balances, showing that total debits equal total credits?

1. General ledger.
2. Chart of accounts.
3. Trial balance.
4. Journal.

 

34/ Purchasing land with cash would have what effect on the accounting equation?

1. Total liabilities increase.
2. Total assets decrease.
3. Total assets increase.
4. No effect.

 

35. Paying dividends to stockholders would be recorded with a:

1. Debit to Salaries Expense.
2. Credit to Dividends.
3. Credit to Common Stock.
4. Debit to Dividends.

 

36. A debit is used to decrease which of the following accounts?

1. Accounts Payable.
2. Salaries Expense.
3. Dividends.
4. Supplies.

 

37. A list of all account names used to record transactions of a company is referred to as a:

1. Chart of accounts.
2. Transaction.
3. Journal.
4. Financial statement.

 

38. Transactions are recorded using debits and credits in a(n):

1. Financial statement.
2. Chart of accounts.
3. Journal.
4. Annual report.

 

39. Which of the following transactions increases total liabilities?

1. Pay for rent in the current period.
2. Purchase equipment with cash.
3. Pay dividends to stockholders.
4. Purchase office supplies on account.

 

40. Account balances in the general ledger are updated for transactions through the process of:

1. Analyzing.
2. Balancing.
3. Posting.
4. Journalizing.

 

41. Which of the following shows a chronological record of all transactions?

1. The general ledger.
2. The chart of accounts.
3. The trial balance.
4. The general journal.

 

42. A credit to Cash will:

1. Decrease liabilities.
2. Decrease assets.
3. Increase assets.
4. Decrease stockholders’ equity.

 

43 Which of the following is possible for a particular business transaction?

1. Increase assets; decrease liabilities.
2. Decrease assets; increase stockholders’ equity.
3. Decrease assets; decrease liabilities.
4. Decrease liabilities; increase expenses

 

44. Which of the following does not represent an external business transaction?

1. Paying employees’ salaries.
2. Expiration of an insurance policy over time.
3. Providing services to customers.
4. Purchasing office supplies.

 

45. The purchase of supplies on account would be recorded with a:

1. Debit to Cash.
2. Debit to Supplies.
3. Debit to Supplies Payable.
4. Credit to Supplies Expense.

 

46. Which of the following accounts normally has a credit balance?

1. Dividends.
2. Cash.
3. Service Revenue.
4. Accounts Receivable.

 

47. A debit is used to decrease which of the following accounts?

1. Supplies.
2. Salaries Expense.
3. Accounts Payable.
4. Dividends.

 

48. Providing services to customers for cash would have what effect on the accounting equation?

1. Increase total stockholders’ equity.
2. Increase total assets.
3. Increase total assets and total stockholders’ equity.
4. Increase total liabilities.

 

49.  A debit to Salaries Expense will:

1. Decrease stockholders’ equity.
2. Increase assets.
3. Increase stockholders’ equity.
4. Decrease liabilities.

 

50. Which of the following shows a chronological record of all transactions?

1. The general journal.
2. The general ledger.
3. The trial balance.
4. The chart of accounts.

 

51 Which of the following accounts normally has a credit balance?

1. Dividends.
2. Accounts Receivable.
3. Service Revenue.
4. Cash.

 

52. Transactions are recorded using debits and credits in a(n):

1. Chart of accounts.
2. Journal.
3. Financial statement.
4. Annual report.

 

53. Which of the following transactions decreases total assets?

1. Receive a utility bill but do not pay it.
2. Receive cash from customers for sales in the current period.
3. Pay dividends to stockholders.
4. Purchase supplies on account.

 

54. Which of the following transactions increases total assets?

1. Provide services to customers on account.
2. Pay dividends to current stockholders.
3. Purchase supplies for cash.
4. Collect cash from customer for services provided on account last month.

 

55. Paying dividends to stockholders would be recorded with a:

1. Debit to Dividends.
2. Credit to Dividends.
3. Credit to Common Stock.
4. Debit to Salaries Expense.

 

56. A credit is used to decrease which of the following accounts?

1. Salaries Payable.
2. Service Revenue.
3. Common Stock.
4. Cash.

Chapter 2 Quiz Answer

1. D. No effect.

2  D.  Decrease stockholders’ equity.