Accounting Basics Quiz

(LO3)Before posting a payment of €5,000, the Accounts Payable of Green Grocers had a normal balance of €16,000. The balance after posting this transaction was:

(LO1)Accounts that normally have debit balances are:

• a. assets, expenses, and revenues.

• b. assets, expenses, and share capital—ordinary.

• c. assets, liabilities, and dividends.

• d. assets, dividends, and expenses.

(LO1)A revenue account:

• a. is increased by debits.

• b. is decreased by credits.

• c. has a normal balance of a debit.

• d. is increased by credits.

(LO3)Posting:

• a. normally occurs before journalizing.

• b. transfers ledger transaction data to the journal.

• c. is an optional step in the recording process.

• d. transfers journal entries to ledger accounts.

(LO1)Debits:

• a. increase both assets and liabilities.

• b. decrease both assets and liabilities.

• c. increase assets and decrease liabilities.

• d. decrease assets and increase liabilities.

(LO4)A trial balance:

• a. is a list of accounts with their balances at a given time.

• b. proves the journalized transactions are correct.

• c. will not balance if a correct journal entry is posted twice.

• d. proves that all transactions have been recorded.

(LO2)Which of the following is not part of the recording process?

• a. Analyzing transactions.

• b. Preparing an income statement.

• c. Entering transactions in a journal.

• d. Posting journal entries.

(LO4)The trial balance of Jeong Company had accounts with the following normal balances: Cash $5,000, Service Revenue $85,000, Salaries and Wages Payable $4,000, Salaries and Wages Expense $40,000, Rent Expense $10,000, Share Capital—Ordinary $42,000, Dividends $15,000, and Equipment $61,000. In preparing a trial balance, the total in the debit column is:

• a. $131,000.

• b. $216,000.

• c. $91,000.

• d. $116,000.

(LO2)Which of the following statements about a journal is false?

• a. It is not a book of original entry.

• b. It provides a chronological record of transactions.

• c. It helps to locate errors because the debit and credit amounts for each entry can be readily compared.

• d. It discloses in one place the complete effect of a transaction.

(LO4)A trial balance will not balance if:

• a. a correct journal entry is posted twice.

• b. the purchase of supplies on account is debited to Supplies and credited to Cash.

• c. a £100 dividend is debited to Dividends for £1,000 and credited to Cash for £100.

• d. a £450 payment on account is debited to Accounts Payable for £45 and credited to Cash for £45.