1 The trial balance would automatically reveal the following error Land was purchased for cash but instead of crediting cash, the credit was made to Accounts Receivable A True B False 2 Expense accounts usually have debit balances and show the cost associated with producing revenue during an accounting period A True B False 3 Liabilities represent claims against the companys assets and may be in the form of accounts payable or notes payable A True B False 4 If $500 cash and a $2,000 note are given in exchange for a delivery truck for use in a business A The stockholders equity is increased B Total assets are decreased C Total liabilities are decreased D None of the above 5 A company returned for credit a portion of the office supplies purchased previously for future use on credit What entry is required A Debit Office Supplies on Hand credit Cash B Debit Cash credit Office Supplies on Hand and Office Equipment C Debit Accounts Payable credit Office Supplies on Hand D Debit Office Equipment credit Office Supplies Expense 6 A cash expenditure for insurance and utilities would cause assets to increase but stockholders equity to decrease A True B False 7 Account numbers are entered in the posting reference column of the two column general journal at the time the transactions are recorded in the ledger accounts A True B False 8 The type of analysis that shows the percentage that each item in a financial statement is of some significant total such as total assets or sales is called A Horizontal analysis B Vertical analysis C Balance sheet analysis D None of the above 9 Horizontal analysis shows the percentage that each item in a financial statement is of some significant total such as total assets or sales A True B False 10 A purchase of land or equipment for cash would cause total assets to increase by the cost of the land or equipment A True B False

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1. The trial balance would automatically reveal the following error: Land was purchased for cash but instead of crediting cash, the credit was made to

The trial balance would automatically reveal the following error: Land was purchased for cash but instead of crediting cash, the credit was made to Accounts Receivable.

A. True

B. False

Expense accounts usually have debit balances and show the cost associated with producing revenue during an accounting period.

A. True

B. False

Liabilities represent claims against the companys assets and may be in the form of accounts payable or notes payable.

A. True

B. False

4. If $500 cash and a $2,000 note are given in exchange for a delivery truck for use in a business:

A. The stockholders equity is increased.
B. Total assets are decreased.
C. Total liabilities are decreased.
D. None of the above.

5. A company returned for credit a portion of the office supplies purchased previously for future use on credit. What entry is required?

A. Debit Office Supplies on Hand; credit Cash.
B. Debit Cash; credit Office Supplies on Hand and Office Equipment.
C. Debit Accounts Payable; credit Office Supplies on Hand.
D. Debit Office Equipment; credit Office Supplies Expense.

A cash expenditure for insurance and utilities would cause assets to increase but stockholders equity to decrease.

A. True

B. False

Account numbers are entered in the posting reference column of the two-column general journal at the time the transactions are recorded in the ledger accounts.

A. True

B. False

8. The type of analysis that shows the percentage that each item in a financial statement is of some significant total such as total assets or sales is called: