4A28_Session 3 Quiz 1

If total assets are increased, there must be a corresponding increase in liabilities or a decrease in stockholders’ equity.

• false

• true

• not clear

The account balance is the difference in total dollars between total debit amounts and total credit amounts.

• false

• true

A credit means that an account has been increased.

• true

• false

• not clear

A decrease in a liability account is recorded by a debit

• true

• false

Transactions are entered in the ledger accounts and then transferred to journals.

• false

• not clear

• true

Dividends are classified as an expense.

• True

• false

Collection of a $600 Accounts Receivable

• increases an asset $600; decreases a liability $600.

• decreases an asset $600; decreases a liability $600.

• increases an asset $600; decreases an asset $600.

A trial balance will not balance if

• a transaction is not posted at all.

•       a $300 payment on accounts payable is debited to accounts payable for $30 and credited to cash for $30.

• a correcting journal entry is posted twice.

• a $50 cash dividend is debited to dividends for $500 and credited to cash for $50.

A trial balance will balance even if

• a $10,000 cash dividend is debited to dividends for $10,000 and credited to cash for $1,000.

• a $300 collection on accounts receivable is credited to accounts receivable for $300 without a corresponding debit.

• a journal entry to record the purchase of equipment for cash of $45,000 is not posted.

• a purchase of supplies for $575 on account is debited to supplies for $575 and credited to accounts payable for $557.

Justin Enterprises received a bill from Livingstone Landscaping for $14,500.  They paid $5,000 on receipt of the bill and agreed to pay the remainder by the end of the month.  This transaction

•             decreases assets, liabilities and stockholder’s equity.

•       has no effect on the basic accounting equation.

• increases assets and liabilities.

• increases liabilities; decreases assets and stockholders’ equity.