1.What is the normal balance of the sales returns account?

A.debit

B.credit

C.zero

D.none of these

2.Which of the following statements is correct?

A.Of the five major types of accounts, only two have normal debit balances.

B.All accounts are increased by a debit and decreased by a credit.

C.A contra asset account is increased through debit.

D.A debit and a debit result to a credit.

3.In accounting, recording a transaction in a debit-credit form is called

journalinging.

posting.

identifying and analyzing.

journalizing.

4.You are an accountant. You obtained the source documents for the business transactions your company has entered into during the day and started inspecting the documents. What step of the accounting cycle are you performing?

Reading

Identifying and analyzing

Journalizing

Posting

5.Your business sells goods to a credit customer. Which of the following accounts is increased?

Accounts receivable

Cost of sales

Sales

All of these

6.Real accounts are presented in what formal report?

. Single choice.

(1 Point)

Income statement

Balance sheet

Unadjusted trial balance

Worksheet

7.

The amounts shown on this trial balance represent the beginning balances of accounts in the next accounting period.

. Single choice.

(1 Point)

Unadjusted trial balance

Adjusted trial balance

Post-closing trial balance

Carry-over trial balance

8.

Entity A started operations on November 1, 20x1. The following were the transactions during the month:

Nov. 1, 20x1 The business owner provides 2,000,000 cash as investment to the business.

Nov. 5, 20x1 Entity A obtains a 500,000 loan and issues a promissory note.

Nov. 8, 20x1 Entity A acquires land costing 1,000,000 on cash basis.

Nov. 16, 20x1 Entity A renders services worth 1,200,000 on account.

Nov. 30, 20x1 Entity A pays salaries expense of 280,000.

How much is the total assets at the end of the period? (Hint: use the basic accounting equation)

. Single choice.

(1 Point)

4,320,000

3,840,000

3,420,000

2,980,000

9.

Entity A started operations on November 1, 20x1. The following were the transactions during the month:

Nov. 1, 20x1 The business owner provides 2,000,000 cash as investment to the business.

Nov. 5, 20x1 Entity A obtains a 500,000 loan and issues a promissory note.

Nov. 8, 20x1 Entity A acquires land costing 1,000,000 on cash basis.

Nov. 16, 20x1 Entity A renders services worth 1,200,000 on account.

Nov. 30, 20x1 Entity A pays salaries expense of 280,000.

How much is the total liabilities at the end of the period?

. Single choice.

(1 Point)

500,000

520,000

580,000

680,000

10.

Entity A started operations on November 1, 20x1. The following were the transactions during the month:

Nov. 1, 20x1 The business owner provides 2,000,000 cash as investment to the business.

Nov. 5, 20x1 Entity A obtains a 500,000 loan and issues a promissory note.

Nov. 8, 20x1 Entity A acquires land costing 1,000,000 on cash basis.

Nov. 16, 20x1 Entity A renders services worth 1,200,000 on account.

Nov. 30, 20x1 Entity A pays salaries expense of 280,000.

How much is the equity at the end of the period after taking into account income and expenses?

. Single choice.

(1 Point)

2,920,000

2,980,000

3,120,000

3,280,000

11.In a worksheet, which of the following is prepared after the unadjusted trial balance?

. Single choice.

(1 Point)

Adjusted trial balance columns

Income statement columns

Adjusting entries columns

Balance sheet columns

12.If total debits exceed total credits in the balance sheet columns of a worksheet, there is

. Single choice.

(1 Point)

profit.

loss.

owner's drawings.

an error.

13.Accounts are listed in the trial balance in this sequence.

. Single choice.

(1 Point)

Asset, Liabilities, Equity, Expense, and Income

Asset, Equity, Liabilities, Expense, and Income

Asset, Liabilities, Equity, Income, and Expense

Asset, Expense, Liabilities, Equity, and Income

14.

Adding amounts horizontally in a worksheet is called

. Single choice.

(1 Point)

footing.

cross-footing.

cross-legging.

horizontaling.

15.

In accounting parlance, an account that has no balance is called a

. Single choice.

(1 Point)

closed account.

dead account.

ghost account.

blocked account.

16.

This trial balance contains only real accounts.

. Single choice.

(1 Point)

Unadjusted trial balance

Adjusted trial balance

Post-closing trial balance

Permanent trial balance

17.

11. It is a journal entry that is the exact opposite of a previous adjusting entry.

. Single choice.

(1 Point)

inside-out entry

closing entry

gnitsujda entry

reversing entry

18.

13. It is an account used temporarily to store discrepancies in the accounts pending their analysis and permanent classification.

. Single choice.

(1 Point)

Suspense account

Horror account

Thriller account

Romantic comedy account

19.

The first step in the accounting cycle is

. Single choice.

(1 Point)

posting to the ledger.

journalizing.

preparing the adjusting entries.

analyzing events.

20.

Credit is on which side of an account?

. Single choice.

(1 Point)

Right

Left

Top

Bottom

21.

16. A debit may signify an increase in

. Single choice.

(1 Point)

liability account.

asset account.

revenue account.

liability and revenue account.

22.

Debit and debit result to

. Single choice.

(1 Point)

liability account.

asset account.

revenue account.

liability and revenue account.

23.

Owner's cash investment to the business.

. Single choice.

(1 Point)

DEBIT Cash CREDIT Owner's capital

DEBIT Cash CREDIT Owner's drawings

DEBIT Owner's capital CREDIT Cash

DEBIT Cash CREDIT Sales

24.

20. Acquisition of equipment on cash basis.

. Single choice.

(1 Point)

DEBIT Cash CREDIT Equipment

DEBIT Expense CREDIT Cash

DEBIT Equipment CREDIT Cash

DEBIT Equipment CREDIT Owner's capital

25.

Acquisition of inventory on cash basis

. Single choice.

(1 Point)

DEBIT Inventory CREDIT Accounts payable

DEBIT Expense CREDIT Cash

DEBIT Inventory CREDIT Cash

DEBIT Cost of sales CREDIT Cash

26.

Acquisition of inventory on credit.

. Single choice.

(1 Point)

DEBIT Inventory CREDIT Accounts payable

DEBIT Accounts payable CREDIT Inventory

DEBIT Accounts payable CREDIT Cash

DEBIT Cost of sales CREDIT Accounts payable

27.

Payment (settlement) of accounts payable

. Single choice.

(1 Point)

DEBIT Inventory CREDIT Accounts payable

DEBIT Cash CREDIT Accounts payable

DEBIT Accounts payable CREDITCash

DEBIT Cost of sales CREDIT Inventory

28.

Sale of inventory on cash basis

. Single choice.

(1 Point)

DEBIT Inventory CREDIT Sales

DEBIT Cash CREDIT Accounts receivable

DEBIT Cash CREDIT Sales

DEBIT Cost of sales CREDIT Cash

29.

25. Sale of inventory on credit

. Single choice.

(1 Point)

DEBIT Cost of sales CREDIT Sales

DEBIT Cash CREDIT Accounts receivable

DEBIT Cash CREDIT Sales

DEBIT Accounts receivable CREDIT Sales

30.

26. Collection of accounts receivable

. Single choice.

(1 Point)

DEBIT Cost of sales CREDIT Sales

DEBIT Cash CREDIT Accounts receivable

DEBIT Cash CREDIT Sales

DEBIT Accounts receivable CREDIT Sales

31.

Payment of advertising expense

. Single choice.

(1 Point)

DEBIT Advertising expense CREDIT Cash

DEBIT Cash CREDIT Advertising expense

DEBIT Cash CREDIT Advertisement payable

DEBIT Advertising expense CREDIT Accounts payable

32.

Owner's drawings (owner's withdrawal of cash from the business)

. Single choice.

(1 Point)

DEBIT Drawings expense CREDIT Cash

DEBIT Cash CREDIT Owner's drawings

DEBIT Owner's drawings CREDIT Cash

DEBIT Cash CREDIT Owner's capital

33.

Which of the following statements is correct?

. Single choice.

(1 Point)

The "Sales" account is used by both service and merchandising businesses in recording revenues from primary business activities.

"Accounts receivable" is used only by service businesses but not by merchandising businesses.

The "Inventory" account is most likely to be found in the financial statements of a merchandising or manufacturing business but not of those of a service business.

A manufacturing business cannot be organized as a sole proprietorship.

34.

Recording assets at their acquisition cost (entry value), rather than at their net selling price (exit value), is in line with the concept of

. Single choice.

(1 Point)

Single entity concept.

Historical cost concept.

Going concern concept.

Matching principle.

35.

The term "posting" as used in accounting means

. Single choice.

(1 Point)

recording an accountable event in debit-credit format.

transferring the debits and credits of journal entries from the journal to the affected accounts in the ledger.

checking the equality of the monetary totals of debits and credits of accounts in the ledger.

uploading photographs to the internet.

36.

At the beginning of the period, Addy had a cash balance of 20,000 and a notes payable of 15,000. During the period, Addy collected 11,000 accounts receivable, paid 8,000 notes payable, and issued additional notes payable of 5,000 in exchange for cash. How much are the ending balances of cash and notes payable, respectively?

. Single choice.

(1 Point)

Cash 17,000 Notes Payable 20,000

Cash 20,000 Notes Payable 12,000

Cash 28,000 Notes Payable 12,000

Cash 36,000 Notes Payable 20,000

37.

What is the normal balance of the purchase returns account?

. Single choice.

(1 Point)

debit

credit

zero

none of these

38.

Which of the following is equal to total goods available for sale?

. Single choice.

(1 Point)

Net purchases - Inventory, beg.

Cost of sales - Inventory, end.

Inventory, end. + Cost of sales

Net purchases + Inventory, end.

39.

A business has total assets, liabilities, and equity of 10,000, 7,000 and 3,000, respectively, at the beginning of the period. During the period, total liabilities decreased to 4,000 while profit was 5,000. How much is the ending total assets?

. Single choice.

(1 Point)

12,000

11,000

9,000

7,000

40.

38. Imagine you are a business manager. Your company has an opportunity to venture out into a new market with a new product. However, your current resources are limited. In order to take the opportunity, you need to discontinue the production of one of your existing products. Your company's accountant provided you with the following information to help you decide which product to discontinue.

Product A Product B Product C

Net sales (income) 5,000,000 3,500,000 2,100,000

Attributable costs (expenses) (4,800,000) (2,275,000) (630,000)

Which product will you most likely consider to stop producing?

. Single choice.

(1 Point)

Product A

Product B

Product C

All them

41.

Which of the following is not a special journal?

. Single choice.

(1 Point)

General Journal

Sales Journal

Purchase Journal

Cash Receipts Journal

42.

A business sells goods on cash basis. This transaction is most likely recorded in which of the following special journals?

. Single choice.

(1 Point)

Sales journal

Purchases journal

Cash receipts journal

Diary journal

43.

41. At the beginning of the period, Entity A's notes payable had a balance of 1,200. During the period, Entity A obtained an additional loan of 800 and made total

. Single choice.

(1 Point)

1,800

1,500

1,200

900

44.

42. This branch of accounting involves teaching accounting, taxation, and other business-related subjects.

. Single choice.

(1 Point)

Accounting education

Government Accounting

Accounting research

Tax accounting

45.

This account is used to record payments received from customers prior to the delivery of goods or rendering of services.

. Single choice.

(1 Point)

Accrued income

Unearned income

Prepaid asset

Accounts receivable

46.

44. A chart of accounts is

. Single choice.

(1 Point)

a listing of all accounts and their balances.

a subsidiary ledger.

a special journal.

a listing of all account titles.

47.

How is profit or loss calculated?

. Single choice.

(1 Point)

It is the difference between net assets at the beginning and end of the accounting period irrespective of transactions with owners.

It is the difference between net liabilities at the beginning and end of the accounting period.

It is the difference between assets and liabilities.

It is the difference between income and expenses.

48.

46. The beginning equity is 5,000. If total income for the period is 8,000 while total expenses are 6,000, how much is the ending balance of equity?

. Single choice.

(1 Point)

7,000

5,000

3,000

1,000

49.

The ending equity is 9,000. If total income for the period is 5,000 while total expenses are 8,000, how much is the beginning balance of equity?

. Single choice.

(1 Point)

12,000

9,000

6,000

0

50.

At the start of the period, a business has total assets of 500,000 and total liabilities of 300,000. During the period, the business earned total income of 1,000,000 and total expenses of 640,000. No additional investments or withdrawals were made by the owner. Total assets at the end of the period were 830,000. How much is the total liabilities at the end of the period?

. Single choice.

(1 Point)

280,000

270,000

260,000

240,000