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Chapter Quiz
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1
What is the proper order that describes the steps in the accounting process?
I. Prepare and analyze the trial balance
II. Record relevant transactions and events in a journal
III. Analyze each transaction and event from source documents
IV. Post journal information to ledger accounts
A)III, IV, I, and II.
B)I, II, III, and IV.
C)III, II, IV, and I.
D)III, II, I, and IV.
E)II, III, I, and IV.
2
A bill (or invoice) received from a vendor and supplier is an example of which of the following?
A)Financial statements
B)Accounts
C)Source documents
D)Journal entry
E)None of the above
3
Which of the following is not a liability account?
A)Unearned revenue
B)Accounts receivable
C)Salaries payable
D)Notes payable
E)Mortgage payable
4
Which of the following is a formal promise to pay a future amount and is classified depending on when it must be repaid?
A)Accounts payable
B)Accounts receivable
C)Note payable
D)Prepaid insurance
E)Both accounts payable and accounts receivable
5
Which of the following type(s) of accounts affect equity?
A)Common stock
B)Dividends
C)Retained earnings
D)A and B only
E)A, B, and C
6
Which of the following would be used in the entry to record a transaction in which the customer pays in advance for products or services before they are earned?
A)Dividends
B)Prepaid account
C)Unearned revenue
D)Accounts payable
E)None of the above
7
Which of the following is the term used to describe the list of accounts that a company uses which includes an identification number assigned to each account?
A)A ledger
B)A chart of accounts
C)A journal
D)A trial balance
E)A source document
8
On March 15, Armstrong Corporation performed consulting services on account for a customer. Armstrong collected $5,000 on account from that customer on April 22. Which of the following general journal entries would be used to record the transaction that took place on April 22?
A)Debit assets for $5,000, credit equity for $5,000.
B)Debit cash for $5,000, credit consulting service revenue for $5,000.
C)Debit cash for $5,000, credit accounts receivable for $5,000.
D)Debit accounts receivable for $5,000, credit consulting service revenue for $5,000.
E)Debit accounts receivable for $5,000, credit cash for $5,000.
9
Caroline Duffy contributed $10,000 in cash and equipment worth $3,000 to open a new business that she has incorporated. Which of the following general journal entries would be used to record this transaction?
A)Debit assets for $13,000, credit common stock for $13,000.
B)Debit cash for $10,000, credit common stock for $10,000.
C)Debit cash and equipment for $13,000, credit common stock for $13,000.
D)Debit cash for $10,000, debit equipment for $3,000, credit common stock for $13,000.
E)Debit cash for $10,000, debit equipment for $3,000, credit dividends for $13,000.
10
On January 31, Harrington Corporation, a consulting company, had accounts receivable in the amount of $10,000, During February, payments from customers on account totaled $5,000. At the end of February, accounts receivable was $12,000. What was the amount of consulting services provided to customers on credit during the month of February?
A)$2,000
B)$3,000
C)$7,000
D)$27,000
E)Cannot be determined
11
Assets total $100,000, liabilities total $10,000, and equity totals $90,000. What is the debt ratio?
A)0.10
B)0.20
C)0.50
D)0.75
E)0.90
12
The ordering of accounts in a trial balance is:
A)Alphabetical.
B)From the highest dollar to the lowest dollar value.
C)From the lowest dollar to the highest dollar value.
D)In chart of account order.
E)Random.
13
Beginning Retained Earnings totaled $12,000. During the period, stockholders invested $50,000. The ending Retained Earnings balance was $32,000. If dividends of $10,000 were paid during the period, what was the net income (or net loss) of the business?
A)Net income, $20,000
B)Net loss, $2,000
C)Net income, $2,000
D)Net income, $30,000
E)None of the above
14
Which of the following accounts would not appear on the income statement?
A)Professional fees earned
B)Unearned consulting revenue
C)Dividends
D)Office supplies expense
E)B and C
15
Which of the following statement is true concerning U.S. GAAP and IFRS balance sheets?
A)Both U.S. GAAP and IFRS require that current items present first in the balance sheet.
B)Only U.S. GAAP requires current items present first in the balance sheet.
C)Only IFRS requires current items present first in the balance sheet.
D)Only U.S. GAAP requires that current items present separately from noncurrent items in the balance sheet.
E)All of the above.





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