1. An account is defined as a: a. Detailed record of increases or decreases in a specific asset, liability, or equity item b. Financial statement record that maintains customer information for a business entity c. Double-entry accounting system d. Transaction that is recorded to report financial statements to users 2. Asset accounts are properties or economic resources held by a business with three key attributes: a. The transaction to acquire the asset will be settled within 30 days, the company has a pre-established delivery date, and a future benefit exists for the company b. A present obligation of a past event, requires future settlement, and the company maintains legal title to the asset c. The transaction to acquire the asset has occurred, the company has legal title to the asset, and a future benefit exists for the company as it is used in operations d. Represents investments made by the owner, requires future settlement, and the company maintains legal title to the asset 3. The balance of the following T-account is: Cash 6,500 2,200 1,000 600 3. The balance of the following T-account is: Cash 6,500 2,200 1,000 600 a. 2,700 debit balance b. 2,700 credit balance c. 3,800 credit balance d. 2,900 debit balance 4. Double-entry accounting means: a. All accounting records need to be recorded twice to ensure appropriate backup of data b. All accounting transactions need to be entered twice in the system to ensure accuracy of data c. Every time a transaction is recorded, the total amount debited must equal the total amount credited d. The increases in an account must always equal the decreases in the same account 5. An important rule in a double-entry accounting system includes: a. Increases in equity accounts always result in a decrease to a liability account b. Equity accounts and liability accounts are always credited, assets are always debited c. Liabilities are always decreased through a debit to equity d. Increases in assets are debited to asset accounts, decreases in assets are credited to asset accounts 6. Profit is adjusted to owner's capital accounts only after: a. The fiscal year-end financial statements have been audited b. The financial statements have been prepared and the closing process has begun c. The closing process has been completed and the balance sheet has been prepared d. The total revenue for the accounting period exceeds the total cost of goods sold 7. The primary purpose of recording journal entries is: a. To list all accounts in a general ledger b. To see the increases and decreases in a specific account c. To determine the overall financial performance of the company by having detailed financial records and enable the production of financial reports d. To identify the source of recorded transactions 8. The term debit means: a. Increase b. An entry that increases asset, expense, and owner's equity accounts c. A transaction that is recorded in a journal d. An entry to transfer a journal entry to ledger accounts 9. On March 10, One Eleven Music Studio purchases a new student drum kit for $1,500 and receives an invoice from Pearl to be paid within 30 days. The following entry is booked: a. Debit Equipment 1,500 and credit Accounts Payable 1,500 b. Debit Supplies 1,500 and credit Accounts Payable 1,500 c. Debit Asset 1,500 and credit Cash 1,500 d. Credit Accounts Payable $1,500 and credit Supplies 1,500 10. On March 1, One Eleven Music Studio collects $125 from each of its 40 students taking drum lessons to pay for lessons for the month of March. Record the required journal entry to book the transaction: a. No entry is required until the end of the month b. Debit Cash $5,000 and credit Revenue $5,000 c. Debit Revenue $5,000 and credit Cash $5,000 d. Debit Cash $5,000 and credit Unearned Revenue $5,000