Quiz C2 KETE201

The normal balance of any account is the

• left side

• right side

• side which increases that account.

• side which decreases that account

The double-entry system requires that each transaction must be recorded

• in at least two different accounts.

• in two sets of books.

• in a journal and in a ledger.

• first as a revenue and then as an expense.

Which of the following accounts does not have a normal credit balance?

• Share Capital–Ordinary

• Revenue account

• Liability account

• Dividends

Which one of the following represents the expanded basic accounting equation?

• Assets = Liabilities + Share Capital–Ordinary account + Retained Earnings + Dividends – Revenue – Expenses.

• Assets + Dividends + Expenses = Liabilities + Share Capital–Ordinary + Retained Earnings + Revenues.

• Assets – Liabilities – Dividends = Share Capital–Ordinary + Retained Earnings + Revenues – Expenses.

• Assets = Revenues + Expenses – Liabilities.

A debit is not the normal balance for which account listed below?

• Dividends

• Cash

• Accounts Receivable

• Service Revenue

An accountant has debited an asset account for $1,000 and credited a liability account for $500. What can be done to complete the recording of the transaction?

• Nothing further must be done.

• Debit an equity account for $500.

• Debit another asset account for $500.

• Credit a different asset account for $500

When a company pays dividends

• the dividend doesn't have to be cash, it could be another asset.

• the dividends account will be increased with a credit.

• the retained earnings account will be directly increased with a debit.

• the dividends account will be decreased with a debit.

Taylor Industries purchased supplies for £1,000. They paid £500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for ₤1,000, a credit to a liability account for ₤500. Which of the following would be the correct way to complete the recording of the transaction?

• Credit an asset account for ₤500.

• Credit another liability account for ₤500.

• Credit the retained earnings account for ₤500.

• Debit the retained earnings account for ₤500.

Omega Company pays its employees twice a month, on the 7th and the 21st. On June 21, Omega Company paid employee salaries of $4,000. This transaction would

• increase equity by $4,000

• decrease the balance in Salaries and Wages Expense by $4,000.

• decrease net income for the month by $4,000

• be recorded by a $4,000 debit to Salaries and Wages Payable and a $4,000 credit to Salaries and Wages Expense

Rusthe Company showed the following balances at the end of its first year:

Cash $ 19,000

Prepaid insurance 1,400

Accounts receivable 7,000

Accounts payable 5,600

Notes payable 8,400

Share capital-ordinary 4,800

Dividends 1,400

Revenues 45,000

Expenses 35,000

What did Rusthe Company show as total credits on its trial balance?

• $65,200

• $63,800

• $62,400

• $66,600