MCQ - General Accounting

Which of the following statements describe transactions that would be recorded in the accounting system?

• An exchange of an asset for a promise to pay

• An exchange of a promise for another promise

• Both of the above

• None of the above

Total assets on a Statement of financial position prepared on any date must agree with which of the following?

• The sum of total liabilities and net income as shown on the income statement.

• The sum of total liabilities and owner’s equity.

• The sum of total liabilities and cash.

• The sum of total liabilities, owner’s equity, and net income.

The dual effects concept can best be described as follows:

• When a transaction is recorded in the accounting system, at least two effects on the basic accounting equation will result.

• When an exchange takes place between two parties, both parties must record the transaction.

• When a transaction is recorded, both the balance sheet and the income statement must be impacted.

• When a transaction is recorded, one account will always increase and one account will always decrease.

The T-account is used to summarize which of the following?

• Increases and decreases to a single account in the accounting system.

• Debits and credits to a single account in the accounting system.

• Changes in specific account balances over a time period.

• All of the above describe how accountants use T-accounts.

A company was recently formed with $50,000 cash invested by the owner. The company then borrowed $20,000 from a bank, and bought $10,000 of supplies on credit. The company also purchased $50,000 of equipment by paying $20,000 in cash and signing a note for the remainder. What is the amount of total assets to be reported on the balance sheet?

• $110,00

• $100,00

• $90,00

• None of the above

Which of the following is/are true regarding debits and credits?

• In any given transaction, the total dollar amount of the debits and the total dollar amount of the credits must be equal.

• Debits decrease certain accounts and credits decrease certain accounts.

• Liabilities and owner’s equity accounts usually end in credit balances; assets usually end in debit balances.

• All of the above.

Karla Tanner Company, operating in the web consulting business major, completed a $6,000 project for a client, who must pay within 30 days. The double entry to record this transaction is:

• Dr. Cash: 6,000 $ and Cr. Revenue: 6,000 $

• Dr. Receivable Account: 6,000 $ and Cr. Revenue: 6,000 $

• Dr. Cash: 6,000 $ and Cr. Unearned Revenue: 6,000 $

• Dr. Receivable account: 6,000 $ and Cr. Unearned Revenue: 6,000 $

The company paid $2,500 cash for advertisements on the web during June

• Dr. Cost of goods sold: 2,500$ and Cr. Cash: 2,500$

• Dr. Cost of goods sold: 2,500$ and Cr. Payable account: 2,500$

• Dr. Advertisement expense: 2,500$ and Cr. Payable account: 2,500$

• Dr. Advertisement expense: 2,500$ and Cr. Cash: 2,500$

Jenna Aracel - owner of Karla Tanner Co. withdrew $9,480 cash from the company for personal use.

• Dr. Cash: 9,480$ and Cr. Owner withdrawals: 9,480$

• Dr. Owner withdrawals: 9,480$ and Cr. Cash: 9,480$

• Dr. Owner investment: 9,480 $ and Cr. Cash: 9,480$

• Dr. Cash: 9,480$ and Cr. Equity: 9,480$

Which of the following is not an asset?

• Cash

• Land

• Receivable Account

• Payable Account