College Accounting A Practical Approach Canadian 12th Edition Slater Test Bank 1

COLLEGE ACCOUNTING A
PRACTICAL APPROACH CANADIAN

12TH EDITION SLATER
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College Accounting, Cdn. Ed., 12e (Slater)

Chapter 3 Beginning the Accounting Cycle: Journalizing, Posting, and the
Trial Balance
3.1 Journalizing: analyzing and recording business transactions into a journal.
1) The process that begins with recording business transactions and includes the completion of the
financial statements is the
A) calendar year.
B) natural business years.
C) fiscal year.
D) accounting cycle.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
2) the most logical reason to use a journal instead of T-accounts is

A) It makes finding errors easier.
B) It keeps all transactions categorized by type.
C) Only one book is needed for all of a firm's bookkeeping needs.
D) A journal consists of removable pages.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
3) The twelve-month period a business chooses for its accounting period is a(n)
A) calendar year.
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B) accounting period.
C) fiscal year.
Answer: C
Diff: 1 Type: MC
Objective: 3-1
4) The time period for which a statement of owner's equity is prepared is a(n)
A) calendar year.
B) accounting period.
C) fiscal period.
Answer: B
Diff: 2 Type: MC
Objective: 3-1
2
5) Financial statements that are prepared for a period shorter than a year are called
A) accounting period statements.
B) fiscal year statements.
C) interim statements.
D) journal statements.
Answer: C
Diff: 2 Type: MC
Objective: 3-1
6) The first step of the accounting cycle is

A) recording journal entries.
B) posting to the ledger.
C) preparing a trial balance.
D) analyzing business transactions.
Answer: D
Diff: 1 Type: MC
Objective: 3-1
7) A journal entry affecting three or more accounts is called a

A) multi-level entry.
B) multi-step entry.
C) compound entry.
D) simple entry.
Answer: C
Diff: 1 Type: MC
Objective: 3-1
8) Business transactions are first recorded in the

A) ledger.
B) journal.
C) T account.
D) balance sheet.
Answer: B
Diff: 1 Type: MC
Objective: 3-1
9) "PR" in the general journal and general ledger stands for

A) peer reviewer.
B) posting reference.
C) prior receipt.
D) None of the above are correct.
Answer: B
Diff: 2 Type: MC
Objective: 3-1
3
10) Revenue is traditionally recognized in the accounting records when
A) cash is received.
B) services are invoiced to the customer.
C) it is incurred.
D) None of the answers are correct.
Answer: B
Diff: 2 Type: MC
Objective: 3-1
11) The general journal

A) is the book of original entry.
B) is the book of final entry.
C) contains account balances.
D) is completed after the general ledger.
Answer: A
Diff: 1 Type: MC
Objective: 3-1
12) The general ledger

A) is the book of original entry.
B) is the book of final entry.
C) lists transactions in chronological order.
D) contains T accounts.
Answer: B
Diff: 2 Type: MC
Objective: 3-1
13) The process of initially recording business transactions in a journal is called

A) sliding.
B) posting.
C) journalizing.
D) transposing.
Answer: C
Diff: 3 Type: MC
Objective: 3-1
14) When recording a transaction in a journal, the account listed first is generally the
A) debit.
B) credit.
C) increase.
D) decrease.
Answer: A
Diff: 1 Type: MC
Objective: 3-1
4
15) How are credit descriptions distinguished from debit descriptions in the general journal?
A) A line separation
B) A different color
C) Indenting
D) There is no distinction.
Answer: C
Diff: 2 Type: MC
Objective: 3-1
16) How are explanations distinguished in the journal?

A) They are underlined.
B) They are in bold print.
C) They are indented below the credit entries.
D) They are written at the margin, in line with the debit entries.
Answer: C
Diff: 2 Type: MC
Objective: 3-1
17) The journal entry debiting Cash and crediting Capital would be a result of a(n)
A) withdrawal.
B) expense.
C) investment.
D) revenue.
Answer: C
Diff: 2 Type: MC
Objective: 3-1
18) If you debit Prepaid Insurance, you most likely will

A) credit Fees Earned.
B) debit Cash.
C) credit Insurance Expense.
D) credit Cash.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
19) The entry to record the payment of office salaries would be

A) Debit Cash; Credit Accounts Receivable.
B) Debit Cash; Credit Salaries Expense.
C) Debit Salaries Expense; Credit Accounts Payable.
D) Debit Salaries Expense; Credit Cash.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
5
20) Which of the following entries would record the payment of a utility bill?
A) Utilities Expense, debit; Cash, credit
B) Cash, debit; Utilities Expense, credit
C) Utilities Expense, debit; Accounts Payable, credit
D) Accounts Payable, debit; Utilities Expense, credit
Answer: A
Diff: 2 Type: MC
Objective: 3-1
21) Which of the following entries records the owner taking cash for personal use?
A) Wage Expense, debit; Cash, credit
B) Capital, debit; Cash, credit
C) No entry is necessary since the owner owns the cash and the entire business.
D) Withdrawals, debit; Cash, credit
Answer: D
Diff: 2 Type: MC
Objective: 3-1
22) When a computer is used for accounting, the journal may be stored in any of the following locations,
EXCEPT
A) the cloud.
B) on a hard drive.
C) in a file folder.
D) on a USB drive.
Answer: C
Diff: 1 Type: MC
Objective: 3-1
23) During the month of January, Katelyn invested $10,000 in starting her legal practice. The proper
journal entry would be
A) Cash, debit $10,000; Katelyn's Capital, credit $10,000.
B) Katelyn's Capital, debit $10,000; Cash, credit $10,000.
C) Cash, debit $10,000; Revenue, credit $10,000.
D) Katelyn's Withdrawals, debit $10,000; Cash, credit $10,000.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
6
24) Which of the following entries records the acquisition of office supplies for cash?
A) Office Supplies 4,000
Cash 4,000
B) Office Supplies 4,000
Accounts Payable 4,000
C) Equipment 4,000
D) Equipment 4,000
Accounts Receivable 4,000
Answer: A
Diff: 2 Type: MC
Objective: 3-1
25) During the month of October, Ford advertised on the Internet. Ford received the bill for $600 in
October, but waited until November to pay the advertising expense. The journal entry to record the
payment in November is
A) Accounts Payable debit; Cash credit.
B) Advertising Expense debit; Accounts Payable credit.
C) Advertising Expense debit; Cash credit.
D) The journal entry is not made in November.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
26) On July 1, Hill's Construction paid six months' insurance in advance. The journal entry to record this
transaction is
A) Debit Prepaid Insurance; Credit Cash.
B) Debit Insurance Expense; Credit Cash.
C) Debit Cash; Credit Prepaid Insurance.
D) Debit Cash; Credit Insurance Expense.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
27) Riley's Book Review billed customers $350. The journal entry to record this transaction is
A) Accounts Receivable debit $350; Editing Fees credit $350.
B) Editing Fees debit $350; Riley, Capital credit $350.
C) Accounts Payable debit $350; Editing Fees credit $350.
D) Editing Fees debit $350; Withdrawals credit $350.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
7
28) Antonio's catered a reception. The total price was $850. Their customer paid half of the fee in cash and
agreed to pay the remainder later. The journal entry to record this transaction is
A) Cash 425
Accounts Receivable 425
Catering Service Fees 850
B) Cash 850
C) Cash 850
D) Accounts Receivable 850
Cash 425
Answer: A
Diff: 3 Type: MC
Objective: 3-1
29) Renzi's Volleyball Gym purchased equipment for $1,400. It made a down payment of $800 with the
remainder on account. The journal entry to record this transaction is
A) Cash 800
B) Accounts Payable 600
Cash 800
Equipment 1,400
C) Supplies 1,400
Cash 800
Accounts Payable 600
D) Equipment 1,400
Cash 800
Answer: D
Diff: 3 Type: MC
Objective: 3-1
30) The entry to record delivering a financial lecture and immediately collecting payment from the
sponsor would be
A) Cash 750
Lecture Fees 750
B) Cash 750
C) Lecture Fees 750
Cash 750
D) Lecture Fees 750
Answer: A
Diff: 2 Type: MC
Objective: 3-1
8
31) BNL completed a performance and collected revenue of $10,000 not previously billed or recorded. The
journal entry to record the collection would be
A) Accounts Receivable 10,000
Performance Fees 10,000
B) Cash 10,000
Performance Fees 10,000
C) Accounts Receivable 10,000
Cash 10,000
D) Performance Fees 10,000
Cash 10,000
Answer: B
Diff: 2 Type: MC
Objective: 3-1
32) The general journal does not have a column titled

A) Date.
B) Account Titles & Descriptions.
C) Dr. and Cr.
D) Balance.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
33) A calendar year is

A) any 12-month period that a business chooses for its accounting year.
B) the 12-month period beginning with January.
C) the period for when a interim financial statement would be completed.
D) All of these answers are correct.
Answer: B
Diff: 1 Type: MC
Objective: 3-1
34) Interim statements are prepared to

A) notify management of the company's current financial position.
B) notify investors of the company's current financial position.
C) allow management to make changes to the business before processing year-end financial statements.
D) All of the above are correct.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
9
35) A transaction completed by Norton Company caused a $4,000 increase in both the total assets and the
total liabilities. This transaction could have been
A) purchase of office equipment for $12,000, paying $8,000 cash, with the rest on account.
B) investment by the owner of an additional $4,000.
C) purchase of office equipment, paying $4,000 cash, and $8,000 on account.
D) None of these answers are correct.
Answer: A
Diff: 3 Type: MC
Objective: 3-1
36) Conner Sales' total assets and total liabilities increased $500. The transaction could have been
A) purchase of supplies for cash, $500.
B) purchase of supplies for $600 with a down payment of $100 and the remainder on account.
C) paid the rent for the month, $600.
D) None of these answers are correct.
Answer: B
Diff: 2 Type: MC
Objective: 3-1
37) Which of the following accounts would be debited in a proper journal entry?
A) Accounts Payable when it is increased
B) Accounts Receivable when it is increased
C) Cash when it is decreased
D) Capital when it is increased
Answer: B
Diff: 2 Type: MC
Objective: 3-1
38) The trial balance lists the accounts

A) alphabetically.
B) in the same order as in the ledger.
C) all debits first and then credits.
D) all credits first and then debits.
Answer: B
Diff: 2 Type: MC
Objective: 3-1
39) As Withdrawals increase,

A) Owner's Equity decreases.
B) Owner's Equity increases.
C) Cash increases.
D) expense increases.
Answer: A
Diff: 3 Type: MC
Objective: 3-1
10
40) If the Owner's Equity account increases during the year, most likely
A) The company was awarded a large and profitable contract.
B) Expenses were unusually low for the year.
C) Revenue was higher than average for the year.
D) The owner made additional investment during the year.
Answer: D
Diff: 3 Type: MC
Objective: 3-1
41) If Accounts Payable has been debited, it is most likely that

A) the company made a payment to a creditor.
B) a customer made a payment.
C) the company made a purchase on account.
D) None of these are possible.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
42) If Accounts Payable has been credited, it is most likely that

A) a collection from a customer was made.
B) a service was provided to a cash customer.
C) the company made a purchase on account.
Answer: C
Diff: 2 Type: MC
Objective: 3-1
43) The journal entry to record an investment by the owner would most commonly include
A) a debit to Cash and a credit to Fees Earned.
B) a debit to Capital and a credit to Cash.
C) a debit to Fees Earned and a credit to Capital.
D) a debit to Cash and a credit to Capital.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
44) The journal entry to record a withdrawal by the owner would most commonly include
A) a debit to Wage Expense and a credit to Cash.
C) a debit to Withdrawals and a credit to Cash.
D) a debit to Cash and a credit to Wage Expense.
Answer: C
Diff: 2 Type: MC
Objective: 3-1
11
45) The journal entry to record an exchange of assets would include
A) a debit to Cash and a credit to Fees Earned.
B) a debit to Supplies and a credit to Accounts Payable.
C) a debit to Cash and a credit to Accounts Receivable.
D) a debit to Fees Earned and a credit to Accounts Receivable.
Answer: C
Diff: 2 Type: MC
Objective: 3-1
46) The general journal entry to record the purchase of an asset on account would include
A) a debit to Accounts Receivable and a credit to Fees Earned.
B) a debit to Equipment and a credit to Accounts Payable.
C) a debit to Accounts Payable and a credit to Equipment.
D) a debit to Supplies and a credit to Cash.
Answer: B
Diff: 1 Type: MC
Objective: 3-1
47) The general journal entry to record a payment to a creditor would most commonly include
A) a debit to Accounts Payable and a credit to Cash.
C) a debit to Supplies and a credit to Cash.
D) a debit to Cash and a credit to Accounts Payable.
Answer: A
Diff: 1 Type: MC
Objective: 3-1
48) The general journal entry to record the earning of revenue would most commonly include
A) a debit to Accounts Receivable and a credit to Capital.
B) a debit to Cash and a credit to Capital.
C) a debit to Fees Earned and a credit to Cash.
D) a debit to Accounts Receivable and a credit to Fees Earned.
Answer: D
Diff: 1 Type: MC
Objective: 3-1
49) Which of the following statements is FALSE regarding a proper journal entry?
A) Debits are always listed first in the entry.
B) Credits are always indented.
C) Skip a line between transactions.
D) Always list the assets first.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
12
50) To find an explanation for a transaction, look in the
A) ledger.
B) balance sheet.
C) journal.
D) trial balance.
Answer: C
Diff: 1 Type: MC
Objective: 3-1
51) If Cash has been debited, it is likely that

A) the owner made an investment.
B) a charge customer made a payment.
C) the business borrowed cash from the bank.
D) All of these are possible.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
52) If Prepaid Rent has been debited, it is likely that

A) the rent was paid for three months in advance.
B) a bill for the past month's rent was received.
C) this month's rent was paid.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
53) If Rent Expense has been debited, it is likely that

A) the rent was paid for three months in advance.
B) a copy of the lease was received.
C) this month's rent was paid.
Answer: C
Diff: 1 Type: MC
Objective: 3-1
54) If Capital has been credited, it is likely that

A) services were provided to a cash customer.
B) services were provided to a charge customer.
C) the owner made an investment.
D) All of these are possible
Answer: C
Diff: 3 Type: MC
Objective: 3-1
13
55) If Fees Earned has been credited, it is most likely that
A) services were provided.
B) the owner made an investment.
C) a correcting entry for the overstatement of revenue was recorded.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
56) If Accounts Payable has been debited, it is most likely that

A) a payment was made on account.
B) a purchase was made on account.
C) a charge customer made a payment.
Answer: A
Diff: 1 Type: MC
Objective: 3-1
57) If Accounts Payable has been credited, it is most likely that

A) a payment was made on account.
B) a purchase was made on account.
C) a correcting entry was made for the overstatement of the purchase of equipment on account.
Answer: B
Diff: 1 Type: MC
Objective: 3-1
58) The simplest form of a journal is a(n)

A) special journal.
B) interim journal.
C) accounting journal.
D) general journal.
Answer: D
Diff: 1 Type: MC
Objective: 3-1
59) When the telephone bill is paid,

A) Telephone Expense is debited and Cash is credited.
B) Telephone Expense is credited and Cash is debited.
C) Telephone Expense is debited and Accounts Payable is credited.
D) Accounts Payable is credited and Telephone Expense is debited.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
14
60) During the month of June, Charles Green invested $5,000 in starting his company, Green Lawn
Service. The proper journal entry would be
A) Cash 5,000
Charles Green, Capital 5,000
B) Charles Green, Capital 5,000
Cash 5,000
C) Cash 5,000
Lawn Service Fees 5,000
D) Charles Green, Capital 5,000
Cash 5,000
Answer: A
Diff: 2 Type: MC
Objective: 3-1
61) During the month of August, Our Town Hardware Store advertised an end-of-the-year sale in the
local newspaper. Our Town Hardware Store received the bill for $60 in August, but waited until
September to pay the advertising expense. The journal entry to record the bill in August is
A) Advertising Expense 60
B) Advertising Expense 60
Accounts Payable 60
C) Accounts Payable 60
Advertising Expense 60
D) No entry is made in August.
Answer: B
Diff: 3 Type: MC
Objective: 3-1
62) D. Sharp, CGA, collected fees of $650 not previously billed or recorded. The journal entry to record
the collection would include
A) debit Cash, $650; credit Accounting Fees, $650.
B) debit Accounts Receivable, $650; credit Accounting Fees, $650.
C) debit Accounting Fees, $650; credit Accounting Fees, $650.
D) debit Cash, $650, credit Accounts Receivable, $650.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
63) Transactions are entered in a journal by

A) company name in alphabetical order.
B) order of importance of company to our business.
C) the order they appear on the accountant's desk.
D) chronological order.
Answer: D
Diff: 2 Type: MC
Objective: 3-1
15
64) The first entry for Pat's Car Wash included debits to Cash, Office Equipment, and Building; as well as
a credit to Pat Wagner, Capital. This entry would be called a
A) compound entry.
B) complicated entry.
C) multiple entry.
D) final entry.
Answer: A
Diff: 2 Type: MC
Objective: 3-1
65) Rent paid in advance is called a(n)

A) expense.
B) revenue.
C) asset.
D) liability.
Answer: C
Diff: 2 Type: MC
Objective: 3-1
66) The time period for which an income statement is prepared is called the accounting period.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-1
67) A fiscal year is always January 1 through December 31.

Answer: FALSE
Diff: 1 Type: TF
Objective: 3-1
68) Transactions are listed in chronological order in the journal.

Answer: TRUE
Diff: 2 Type: TF
Objective: 3-1
69) Rent paid in advance is a liability.

Answer: FALSE
Diff: 2 Type: TF
Objective: 3-1
70) Interim statements are statements that are usually prepared for a portion of the business' fiscal year.
Answer: TRUE
Diff: 2 Type: TF
Objective: 3-1
71) A ledger is called the book of final entry.

Answer: TRUE
Diff: 2 Type: TF
Objective: 3-1
16
72) A business's fiscal year that ends at the same time as a slow seasonal period begins is the natural
business year.
Answer: TRUE
Diff: 2 Type: TF
Objective: 3-1
73) The credit part of the transaction is recorded first in the journal entry.
Answer: FALSE
Diff: 1 Type: TF
Objective: 3-1
74) The debit is indented in a journal entry.

Answer: FALSE
Diff: 1 Type: TF
Objective: 3-1
75) A compound journal entry affects more than two accounts in the transaction.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-1
76) A company would review the ledger if an account balance was needed.
Answer: TRUE
Diff: 2 Type: TF
Objective: 3-1
77) Interim reports are usually prepared once a year.

Answer: FALSE
Diff: 1 Type: TF
Objective: 3-1
78) A calendar year is any twelve-month period.

Answer: FALSE
Diff: 1 Type: TF
Objective: 3-1
79) The chart of accounts contains the same information as the journal.
Answer: FALSE
Diff: 1 Type: TF
Objective: 3-1
80) A journal is considered to be a book of final entry.

Answer: FALSE
Diff: 2 Type: TF
Objective: 3-1
81) A chart of accounts is a list of the accounts and their balances.

Answer: FALSE
Diff: 1 Type: TF
Objective: 3-1
17
82) Liabilities increase on the credit side of the account and decrease on the debit side.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-1
83) To record rent paid in advance, Prepaid Rent would be debited.

Answer: TRUE
Diff: 2 Type: TF
Objective: 3-1
84) The first step of completing the journal is to fill in the post reference column.
Answer: FALSE
Diff: 2 Type: TF
Objective: 3-1
85) Revenue is recorded when earned.

Answer: TRUE
Diff: 2 Type: TF
Objective: 3-1
86) Posting is the first step in recording transactions.

Answer: FALSE
Diff: 2 Type: TF
Objective: 3-1
87) A fiscal year runs for any 12 consecutive months.

Answer: TRUE
Diff: 2 Type: TF
Objective: 3-1
88) The accountant should check the chart of accounts to see what account titles should be used when
journalizing.
Answer: TRUE
Diff: 3 Type: TF
Objective: 3-1
89) The PR column of the journal should be completed when entering the journal entry.
Answer: FALSE
Diff: 2 Type: TF
Objective: 3-1
18
90) Prepare in proper form journal entries for the following transactions. Omit explanations.
October
2 Owner made a cash investment into the company $6,000
8 Bought supplies on account $100.
10 Paid salaries, $700
15 Paid for supplies purchased on October 8
21 Received company telephone bill, to be paid later, $50
Answer:
October Cash
2 Capital 6,000 6,000
Supplies
Accounts
8 Payable 100 100
Salaries Expense
10 Cash 700 700
Accounts Payable
15 Cash 100 100
Telephone Expense
Accounts
21 Payable 50 50
Diff: 2 Type: ES
Objective: 3-1
19
91) Journalize, in proper form, the following transactions that occurred during September. Omit
explanations.
September
5 Michele invested $23,000 cash and $10,000 of equipment into her new business
10 Paid three months' rent in advance, $2,400
23 Withdrew $400 from the business
24 Billed client for services rendered, $17,000
Answer:
Cash
September Equipment 23,000
5 Michele, Capital 10,000 33,000
Prepaid Rent
10 Cash 2,400 2,400
Michele, Withdrawals
23 Cash 400 400
Accounts Receivable
24 Fees Earned 17,000 17,000
Diff: 2 Type: ES
Objective: 3-1
92) Cooper Company began business in June. Prepare the following transactions for June. Omit
explanations.
June
2 Cooper invested $3,000 cash and $1,000 equipment into her new business
12 Billed customer for services performed, $500
16 Purchased equipment on account, $200
20 Received one-half amount due from June 12
25 Cooper withdrew cash for personal use, $100.
Answer:
Cash
June Equipment 3,000
2 Cooper, Capital 1,000 4,000
12 Service Fees 500
Equipment
16 Accounts Payable 200 200
Cash
20 Accounts Receivable 250 250
Cooper, Withdrawals
25 Cash 100 100
Diff: 2 Type: ES
Objective: 3-1
20
93) Record the following selected transactions for January in a two-column journal, identifying each entry
by letter:
(a) Earned $8,000 fees on account.
(b) Purchased equipment for $45,000, paying $20,000 in cash and the remainder on credit.
(c) Paid $3,000 for rent for January.
(d) Purchased $2,500 of supplies on account.
(e) A. Allen $2,000 investment in the company.
(f) Received $7,000 in cash for fees earned previously.
(g) Paid $1,200 to creditors on account.
(h) Paid wages of $6,250.
(i) Received $7,150 from customers on account.
(j) A. Allen withdrawal of $1,750.
Answer:
Item Transaction PR Debit Credit
(a) Accounts Receivable 8,000
Fees Earned 8,000
(b) Equipment 45,000

Cash 20,000
(c) Rent Expense 3,000

Cash 3,000
(d) Supplies 2,500

(e) Cash 2,000

Allen, Capital 2,000
(f) Cash 7,000

Fees Earned 7,000
(g) Accounts Payable 1,200

Cash 1,200
(h) Wages Expense 6,250

Cash 6,250
(i) Cash 7,150

(j) Allen, Withdrawal 1,750

Cash 1,750
Diff: 3 Type: ES
Objective: 3-1
21
94) Post the following transaction to the ledger of Wiley Services. The partial chart of accounts for
Thompson's Company is
111 Cash
121 Accounts Receivable
211 Accounts Payable
411 Service Fees
GENERAL JOURNAL Page 1

Date Acct. Titles and Description PR Debit Credit
May 1 Accounts Receivable 14,000
Service Fees 14,000
Billed customer
May 5 Accounts Payable 3,000

Cash 3,000
Paid amount due
Cash Account 111

Date Explanation PR Debit Credit Dr/Cr Balance
Accounts Receivable Account 121

Accounts Payable Account 211

Service Fees Account 411

22
Answer: Cash Account 111
May 5 GJ1 3,000 Cr 3,000
Accounts Receivable Account 121

May 1 GJ1 14,000 Dr 14,000

May 5 GJ1 3,000 Dr 3,000
Service Fees Account 411

May 1 GJ1 14,000 CR 14,000
Diff: 3 Type: ES
Objective: 3-1
95) Define and discuss a calendar year, accounting period, and fiscal year.
Answer: A calendar year runs from January 1 to December 31. An accounting period is the period of time
for which an income statement is prepared. It could be a day, a month, a quarter of the year, or a year. A
fiscal year is any 12-month period a business chooses for its accounting year. It could run, for example,
from February 1 to January 31 or from October 1 to September 30.
Diff: 3 Type: ES
Objective: 3-1
96) Provide an explanation for the following journal entries:

(a) Prepaid Rent debited, Cash credited
(b) Office supplies debited, Accounts Payable credited
(c) Cash debited, Capital credited
(d) Withdrawals debited, Cash credited
(e) Accounts Payable debited, Cash credited
Answer:
(a) Paid rent in advance
(b) Bought supplies on account
(c) Owner investment in the company
(d) Owner withdrawal
(e) Made payment on account
Diff: 2 Type: ES
Objective: 3-1
23
97) Complete the following entries by using a "debit" or "credit".
Received payment from a customer. Cash would have a: ________
Owner makes an investment of equipment. Capital would have a: ________
Paid rent in advance. Prepaid Rent would have a: ________
Billed a customer for services rendered. Revenue would have a: ________
Paid an advertising bill received last month. Cash would have a: ________
Owner withdrew cash. Withdrawals would have a: ________
Answer:
Debit
Credit
Debit
Credit
Credit
Debit
Diff: 2 Type: ES
Objective: 3-1
98) What are interim financial statements?

Answer: Interim financial statements are prepared for a month, quarter or some other portion of the
fiscal year. They provide information about the company's financial status to its management, investors,
etc at a given point in time. Interim statements allow management to review the results and make
changes prior to the fiscal year-end.
Diff: 2 Type: ES
Objective: 3-1
24
99) Complete the following questions based on the journal entry below:
GENERAL JOURNAL Page 1

May 1 Cash 110 14,000
Capital 300 14,000
Date of Journal entry: ________
Name of account debited ________
Name of account credited: ________
Provide an explanation for this entry: ________
Page of Journal: ________
Account number for Cash: ________
Account number for Capital: ________
Answer:
May 1
Cash
Capital
Owner's cash investment
Page 1
110
300
Diff: 2 Type: ES
Objective: 3-1
100) Describe the difference in information contained in the general journal vs. the general ledger.
Answer: The general journal provides a listing of day-to-day transactions listed in chronological order. It
displays the date, titles of the account(s) that are debited, titles of account(s) that are credited, the
respective amounts of those debits and credits and the explanation of the transaction. It also includes the
post reference column so that you can verify that the transaction was posted to the ledger.
The general ledger is a complete "book" of all accounts used by the company. The ledger account keeps a
running balance of the specific account based on the transactions posted. It displays the date of
transactions and amount of transaction. It also includes the post reference column which shows the
journal and page number where the entry is journalized.
Diff: 3 Type: ES
Objective: 3-1
25
101) Prepare journal entries for the following transactions that occurred during May. Omit explanations.
May 2 Purchased supplies on account, $600.
10 Paid May salaries, $500.
15 Paid for supplies purchased on May 2.
21 Received telephone bill, to be paid later, $50.
Answer:
May 2 Supplies 600
10 Salaries Expense 500
Cash 500
15 Accounts Payable 600
Cash 600
21 Telephone Expense 50
Accounts Payable 50
Diff: 1 Type: ES
Objective: 3-1
102) Journalize the following transactions that occurred during September. Omit explanations.
Sep. 5 S. Richman invested $4,000 cash and $100 of equipment into his new business.
10 Paid three months' rent in advance, $1,500.
23 Purchased equipment on account, $2,000.
24 Billed client for services rendered, $1,000.
Answer:
Sep. 5 Cash 4,000
Equipment 100
S. Richman, Capital 4,100
10 Prepaid Rent 1,500
Cash 1,500
23 Equipment 2,000
24 Accts. Receivable 1,000
Fees Earned 1,000
Diff: 1 Type: ES
Objective: 3-1
103) Discuss the concept of cross-referencing. Include in your discussion the benefits provided by cross-
referencing.
Answer: Cross-referencing is the recording in the post reference column of the journal the account
number of the ledger account that was updated from the journal entry. Cross-referencing can tell which
transactions have or have not been posted and also to which accounts they were posted. In the ledger the
posting reference leads us back to the journal page number of the original transaction, so that we may see
why the debit or credit was recorded and all other accounts affected.
Diff: 2 Type: ES
Objective: 3-1
26
3.2 Posting: transferring information from a journal to a ledger.
1) The purpose of posting is to

A) list the transactions in chronological order in the journal.
B) provide an explanation of the transaction.
C) update the account balances in the ledger.
D) correct a previous entry.
Answer: C
Diff: 2 Type: MC
Objective: 3-2
2) The accounting cycle element that would benefit the most from using a computer is
A) journalizing.
B) posting.
C) summarizing.
D) correcting errors.
Answer: B
Diff: 2 Type: MC
Objective: 3-2
3) Posting is performed by transferring information from the journal to the

A) ledger.
B) trial balance.
C) balance sheet.
D) income statement.
Answer: A
Diff: 1 Type: MC
Objective: 3-2
4) The posting reference column in the ledger is

A) used to record the journal and page number the transactions originated.
B) used to record the ledger number.
C) used to record the date.
D) not used.
Answer: A
Diff: 2 Type: MC
Objective: 3-2
5) A credit to a liability account was posted to an owner's equity account. This would cause
A) assets to be overstated.
B) liabilities to be understated.
C) owner's equity to be understated.
D) net income to be overstated.
Answer: B
Diff: 3 Type: MC
Objective: 3-2
27
6) A credit to an asset account was posted to a revenue account. This would cause
A) assets to be understated.
C) capital to be understated.
D) revenue to be overstated
Answer: D
Diff: 3 Type: MC
Objective: 3-2
7) A credit to an asset account was posted to an expense account. This would cause
D) expenses to be overstated.
Answer: A
Diff: 3 Type: MC
Objective: 3-2
8) A debit to an expense account was posted to an asset account. This would cause
D) expenses to be understated.
Answer: D
Diff: 3 Type: MC
Objective: 3-2
9) A debit to the Capital account was posted to an expense account. This would cause
C) capital to be overstated.
D) expense to be understated.
Answer: C
Diff: 3 Type: MC
Objective: 3-2
10) A credit to an asset account was posted to a liability account. This would cause
B) liabilities to be overstated.
D) revenue to be overstated.
Answer: B
Diff: 3 Type: MC
Objective: 3-2
28
11) A debit to the Capital account was posted to a revenue account. This would cause
D) revenue to be understated.
Answer: D
Diff: 3 Type: MC
Objective: 3-2
12) A debit to a revenue account was posted to an expense account. This would cause
A) expenses to be overstated.
B) revenue to be understated.
C) expenses to be understated.
D) capital to be overstated.
Answer: A
Diff: 3 Type: MC
Objective: 3-2
13) A debit to a liability account was posted to an expense account. This would cause
C) owner's equity to be overstated.
D) expenses to be overstated.
Answer: D
Diff: 3 Type: MC
Objective: 3-2
14) A debit to a liability account was posted to a revenue account. This would cause
D) revenue to be overstated.
Answer: B
Diff: 3 Type: MC
Objective: 3-2
15) The posting reference column on the general journal

A) shows which transactions have been posted to the ledger.
B) displays to which accounts the transactions have been posted.
C) allows us to cross reference to the general ledger.
Answer: D
Diff: 2 Type: MC
Objective: 3-2
29
16) The posting reference column in the journal is used for
A) recording the source documents identification number.
B) recording the account number to which the entry was posted.
C) recording the time when the entry was posted.
D) recording the initials of the person who did the posting.
Answer: B
Diff: 1 Type: MC
Objective: 3-2
17) The proper sequence used in recording a business transaction is

A) analyze, post, journalize, record the account balance, and complete the reference column in the
journal.
B) analyze, journalize, post, record the account balance, and complete the reference column in the journal.
C) analyze, journalize, post, complete the reference column in the journal, and record the account balance.
D) journalize, analyze, post, record the account balance, and complete the reference column in the
journal.
Answer: B
Diff: 2 Type: MC
Objective: 3-2
18) Transferring information from the journal to the ledger is called

A) journalizing.
B) ledgering.
C) footing.
D) posting.
Answer: D
Diff: 1 Type: MC
Objective: 3-2
19) Posting is the transfer of information from

A) the general ledger to the journal.
B) the chart of accounts to the journal.
C) the chart of accounts to the ledger.
D) the journal to the general ledger.
Answer: D
Diff: 2 Type: MC
Objective: 3-2
20) The final step of posting is

A) calculating the balance of the account.
B) listing the date in the journal.
C) recording the account number in the PR column of the journal.
D) recording the account number in the PR column of the ledger.
Answer: C
Diff: 3 Type: MC
Objective: 3-2
30
21) Posting is the process of transferring information from the journal to the trial balance.
Answer: FALSE
Diff: 1 Type: TF
Objective: 3-2
22) Posting is the process of entering amounts in the ledger.

Answer: TRUE
Diff: 1 Type: TF
Objective: 3-2
23) Posting is the step in the accounting cycle where errors are most likely to happen.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-2
24) The process of transferring the data from the journal to the ledger accounts is called posting.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-2
25) A running balance is maintained in the ledger after each transaction is posted.
Answer: TRUE
Diff: 2 Type: TF
Objective: 3-2
26) The same information is contained in the journal and the ledger but in a different form.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-2
27) Posting is the transferring of information from the ledger to the chart of accounts.
Answer: FALSE
Diff: 2 Type: TF
Objective: 3-2
31
28) Post the following transactions to the ledger of Jason Company. The partial chart of accounts of Jason
Company is as follows:
111 Cash
121 Equipment
311 Jason, Capital
GENERAL JOURNAL PAGE 1

April 1 Cash 14,000
Jason, Capital 14,000
Cash investment
April 5 Equipment 3,000

Cash 1,000
Purchased equipment
Cash Account 111

Equipment Account 121


Jason, Capital Account 311

32
April 1 GJ1 14,000 Dr 14,000
5 GJ1 1,000 Dr 13,000

April 5 GJ1 3,000 Dr 3,000

April 5 GJ1 2,000 Cr 2,000
Jason, Capital Account 311

April 1 GJ1 14,000 Cr 14,000
Diff: 3 Type: ES
Objective: 3-2
33
29) Post the following transactions to the ledger of Marian Company. The partial chart of accounts of
Marian Company is as follows:
111 Cash
121 Equipment
311 Marian Epp, Capital
GENERAL JOURNAL PAGE 1

April 1 Cash 25,000
Marian Epp, Capital 25,000
Cash investment
April 5 Equipment 5,000

Cash 2,000
Purchased equipment
Cash Account 111



Marian Epp, Capital Account 311

34
April 1 GJ1 25,000 Dr 25,000
5 GJ1 2,000 Dr 23,000

April 5 GJ1 5,000 Dr 5,000

April 5 GJ1 3,000 Cr 3,000
Marian Epp, Capital Account 311

April 1 GJ1 25,000 Cr 25,000
Diff: 3 Type: ES
Objective: 3-2
30) Karen Brown, a student in your class, is not sure the effect of the following unrelated situations would
have on the accuracy of the financial statements. Identify the account(s) that are affected and if the trial
balance would balance.
(a) Equipment was purchased for $1,500 cash. The debit was recorded properly, but the credit was
omitted.
(b) A debit to cash for $69 was posted as $96; the credit was posted correctly.
(c) A purchase of supplies on account for $300 was posted as a debit to equipment and a credit to cash.
Answer:
(a) Cash is overstated by $1,500; the debit side is $1,500 greater than the credit side on the trial balance.
The trial balance would not balance.
(b) Cash is overstated by $27; the debit side is $27 greater than the credit side on the trial balance.
(c) Equipment is overstated and Supplies is understated by $300; Accounts Payable is understated and
Cash is understated by $300. Trial balance is in balance.
Diff: 3 Type: ES
Objective: 3-2
35
3.3 Preparing a trial balance.
1) The informal listing of the ledger accounts and their balances in the ledger to aid in proving the
equality of debits and credits is the
A) journal.
B) ledger.
C) income statement.
D) trial balance.
Answer: D
Diff: 1 Type: MC
Objective: 3-3
2) If the debit and credit totals of a trial balance are not equal, it could be due to the following type of
error.
A) Failure to record a transaction
B) Recording the same erroneous amount for both the debit and the credit sides of a transaction
C) Incorrectly calculating the debit side of the trial balance
D) Recording the same transaction more than once
Answer: C
Diff: 2 Type: MC
Objective: 3-3
3) If the business records a number as 176 and it should be 167, this error would be called
A) rearrangement.
B) transposition.
C) slide.
D) None of the above
Answer: B
Diff: 1 Type: MC
Objective: 3-3
4) If a trial balance is not equal, you should first

A) re-compute the ledger balances.
B) trace all postings.
C) re-add the trial balance and calculate the difference.
D) look for missing transactions.
Answer: C
Diff: 2 Type: MC
Objective: 3-3
5) The proper format for a journal entry includes all of the following EXCEPT
A) the total amounts of debits must equal the total amount of credits.
B) skip a line between transactions.
C) the credit portion of the transaction is always first.
D) listed in chronological order.
Answer: C
Diff: 2 Type: MC
Objective: 3-3
36
6) Which of the following errors would cause the trial balance to be out of balance?
A) The payment of utilities expense was recorded as a debit to Rent Expense for $87 and a credit to Cash
for $87.
B) The payment of an account payable for $100 was recorded as a debit to Cash, $100, and a credit to
Accounts Payable, $100.
C) The collection of an account was not recorded.
D) The payment of an account payable for $400 was recorded as a debit to Accounts Payable for $400 and
a credit to Cash for $4,000.
Answer: D
Diff: 3 Type: MC
Objective: 3-3
7) Which of the following transactions would cause the trial balance to be out of balance?
A) A debit to Cash and a debit to Equipment for the same amount
B) A credit to Cash and a debit to Supplies for the same amount
C) A debit to Accounts Receivable and a credit to Accounting Fees for the same amount
D) All of these answers are correct.
Answer: A
Diff: 3 Type: MC
Objective: 3-3
8) An overpayment was discovered in computing and paying the wages of a Plum Hollow Country Club
employee. When the employee returns the amount of the overpayment, Plum Hollow should make which
of the following entries?
A) Cash, debit; Wages Expense, credit
B) Wages Payable, debit; Wages Expense, credit
C) Wages Expense, debit; Cash, credit
D) Wages Expense, debit; Wages Payable, credit
Answer: A
Diff: 2 Type: MC
Objective: 3-3
9) Which of the following accounts would be credited in a proper journal entry?

A) Cash when it is increased
B) Service Fees when it is increased
C) Capital when it is decreased
D) Accounts Payable when it is decreased
Answer: B
Diff: 2 Type: MC
Objective: 3-3
10) An $800 cheque written for supplies was journalized as $80. The entry to correct this error is
A) debit Supplies, $720; credit Cash, $720.
B) debit Cash, $720; credit Supplies, $720.
C) debit Supplies, $80; credit Cash, $80.
D) debit Cash, $80; credit Cash, $80.
Answer: A
Diff: 3 Type: MC
Objective: 3-3
37
11) Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means
A) all of the information from the journal was correctly transferred to the ledger.
B) all accounts have their correct balances in the ledger.
C) only the ledger is accurate; the journal may be incorrect.
D) only that the debit dollar amounts equal the credit dollar amounts.
Answer: D
Diff: 2 Type: MC
Objective: 3-3
12) In preparing the trial balance of the K&L's Bridal Service, the Withdrawal account (which had a
normal balance in the general ledger) was listed as a credit for $300. What will be the difference between
the debit and credit sides of the trial balance?
A) $150
B) $200
C) $300
D) $600
Answer: D
Diff: 2 Type: MC
Objective: 3-3
13) The trial balance

A) includes all accounts with a balance in the ledger.
B) includes assets, liabilities, capital, withdrawals, revenues and expenses.
C) ensures that debits equal credits.
Answer: D
Diff: 1 Type: MC
Objective: 3-3
14) To correct an error made in the journal (prior to posting in the ledger),
A) erase the error and write the correct entry.
B) line out the incorrect portion of the entry and write in the correction.
C) ignore the error, it will correct itself in the next accounting period.
D) write a new journal entry correcting the original entry.
Answer: B
Diff: 2 Type: MC
Objective: 3-3
15) In preparing the trial balance of the Frank's Gardening Service, the Revenue account (which had a
normal balance in the general ledger) was mistakenly listed as a debit for $6,000. What will be the
difference between the debit and credit sides of the trial balance?
A) $3,000
B) $2,000
C) $12,000
D) $6,000
Answer: C
Diff: 2 Type: MC
Objective: 3-3
38
16) When the trial balance includes a debit column total of $14,350 and a credit column total of $15,350, it
is probable that
A) a transposition error occurred.
B) a $500 debit was recorded twice.
C) a $500 credit was recorded twice.
D) a $500 debit was recorded as a credit.
Answer: D
Diff: 3 Type: MC
Objective: 3-3
17) Leona James, a student in your class, is not sure the effect of the following unrelated situations would
have on the accuracy of the financial statements. Identify the account(s) that are affected and if the trial
balance would balance.
omitted.
(b) A debit to cash for $37 was posted as $73; the credit was posted correctly.
(c) A purchase of supplies on account for $200 was posted as a debit to equipment and a credit to cash.
Answer: (a) Cash is overstated by $2,500; the debit side is $2,500 greater than the credit side on the trial
balance. The trial balance would not balance.
(b) Cash is overstated by $36; the debit side is $36 greater than the credit side on the trial balance.
(c) Equipment is overstated and Supplies is understated by $200; Accounts Payable is understated and
Cash is understated by $200. Trial balance is in balance.
Diff: 3 Type: ES
Objective: 3-3
18) A trial balance difference divisible by 9 could indicate

A) a slide or transposition.
B) a slide only.
C) a transposition only.
D) a journal entry error.
Answer: A
Diff: 3 Type: MC
Objective: 3-3
19) If an error in a journal entry is detected after posting, you should

A) erase the incorrect entry.
B) initial where the error was made.
C) make a correcting entry.
D) do nothing in hopes it will go away.
Answer: C
Diff: 2 Type: MC
Objective: 3-3
39
20) Shawn journalized and posted an entry for $2,000 debit to Cash; and $2,000 credit to Service Fees. The
correct amount on the billing was $200. The entry to correct this error is
A) debit Cash, $1,800; credit Service Fees, $1,800.
B) debit Service Fees, $1,800; credit Cash, $1,800.
C) debit Service Fees, $2,800; credit Cash, $2,000.
D) debit Service Fees, $200; credit Cash, $200.
Answer: B
Diff: 3 Type: MC
Objective: 3-3
21) A trial balance difference where the difference amounted to $400 could indicate
A) a slide or transposition.
B) a slide only.
C) a transposition only.
D) a $200 debit posted as a credit.
Answer: D
Diff: 3 Type: MC
Objective: 3-3
22) An example of a transposition is

A) debit to Accounts Receivable for $2,000 instead of $200.
B) debit to Rent Expense instead of a debit to Prepaid Rent for $200.
C) debit to Telephone Expense for $250 instead of $520.
D) debit to Equipment for $1,200 instead of $1,000.
Answer: C
Diff: 2 Type: MC
Objective: 3-3
23) The balances for the individual accounts used to complete the Trial Balance are taken from the
A) journal.
B) general ledger.
C) chart of accounts.
D) invoices.
Answer: B
Diff: 2 Type: MC
Objective: 3-3
24) If the trial balance does not balance, which of the following is NOT a method used to detect the error.
Checking to see if the difference is
A) 10, 100, etc.
B) equal to the amount of one of the journal entries.
C) equal to the amount of one of the journal entries when the difference is divided by two.
D) divisible by 7.
Answer: D
Diff: 2 Type: MC
Objective: 3-3
40
25) When the trial balance includes a debit column total of $18,352 and a credit column total of $18,552, it
is probable that
A) a transposition error occurred.
B) a $100 debit was recorded twice.
C) a $100 credit was recorded twice.
D) a $100 debit was recorded as a credit.
Answer: D
Diff: 2 Type: MC
Objective: 3-3
26) A trial balance is a list of the accounts and account numbers.

Answer: FALSE
Diff: 2 Type: TF
Objective: 3-3
27) The trial balance proves the equality of debits and credits.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-3
28) A slide is evenly divisible by the number 9.

Answer: TRUE
Diff: 1 Type: TF
Objective: 3-3
29) The trial balance listing is in the same order as the chart of accounts.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-3
30) Journalizing a transaction with both the debit and the credit for $75 instead of $57 will cause the trial
balance to be out of balance.
Answer: FALSE
Diff: 2 Type: TF
Objective: 3-3
31) If the trial balance is in balance, it proves that all transactions were properly recorded.
Answer: FALSE
Diff: 3 Type: TF
Objective: 3-3
32) Correctly posting a transaction twice will cause the trial balance totals to be unequal.
Answer: FALSE
Diff: 3 Type: TF
Objective: 3-3
33) A slide is an error that results when zeros have been added or deleted when writing an amount.
Example: 20,000 is written as 2,000.
Answer: TRUE
Diff: 2 Type: TF
Objective: 3-3
41
34) The order of the flow of accounting data is to (1) prepare a trial balance, (2) record in a journal, (3)
post in a ledger.
Answer: FALSE
Diff: 2 Type: TF
Objective: 3-3
35) The dollar amount of the debits must be equal to the dollar amount of the credits for each transaction.
Answer: TRUE
Diff: 1 Type: TF
Objective: 3-3
36) When the total debits equal the total credits on the trial balance, this is proof that all transactions have
been recorded properly.
Answer: FALSE
Diff: 3 Type: TF
Objective: 3-3
37) An addition error could cause the total debit and total credit columns on the trial balance to show a
difference of 100.
Answer: TRUE
Diff: 2 Type: TF
Objective: 3-3
38) A Trial Balance would detect the following errors: An entry made twice or not posted.
Answer: FALSE
Diff: 2 Type: TF
Objective: 3-3
42
39) All nine transactions for Ross Realty for June 2017, the first month of operation, are recorded in the
following T accounts:
Prepare a trial balance, listing the accounts and their balance in proper order.
Answer: Ross Realty
Trial Balance
June 30, 2017
Debit Credit
Cash 22,600
Equipment 22,500
Supplies 7,500
Ross, Capital 30,000
Ross, Withdrawals 2,000
Fees Earned 9,000
Operating Expense 4,500
Totals 59,500 59,500
Diff: 3 Type: ES
Objective: 3-3
43
40) All ten transactions for Chalmers Consulting for August 2017, the first month of operation, are
recorded in the following T accounts:
Prepare a trial balance, listing the accounts and their balance in proper order.
Answer: Chalmers Consulting
Trial Balance
August 31, 2017
Debit Credit
Cash 15,100
Equipment 18,500
Supplies 4,500
Chalmers, Capital 20,000
Chalmers, Withdrawals 3,000
Fees Earned 11,800
Operating Expense 2,500
Totals 45,300 45,300
Diff: 3 Type: ES
Objective: 3-3
44
41) The following trial balance has been improperly completed. All the accounts have normal balances.
Prepare a corrected trial balance in good form.
Danielson Online Company

Trial Balance
March 31, 2017
Salaries Expense 200

Rent Expense 250
Equipment 2,250
Danielson, Capital 1,800
Danielson, Withdrawals 900
Service Fees 2,050
Cash 2,210
Totals 6,140 5,560
Answer: Danielson Online Company

Trial Balance
March 31, 2017
Cash 2,210
Equipment 2,250
Danielson, Capital 1,800
Danielson, Withdrawals 900
Service Fees 2,050
Rent Expense 250
Totals 5,850 5,850

Diff: 3 Type: ES
Objective: 3-3
45
42) Julie, a new employee, is not sure of the effect the following unrelated situations would have on the
accuracy of the financial statements. Identify the account(s) that are affected and if the trial balance would
balance.
omitted.
(b) A debit to Cash for $250 was posted as $2,500; the credit was posted correctly.
(c) A purchase of supplies on account for $75 was posted as a debit to Supplies and a credit to Cash.
Answer:
(a) Cash is overstated by $1,000; the debit side is $1,000 greater than the credit side on the trial balance.
(b) Cash is overstated by $2,250; the debit side is $2,250 greater than the credit side on the trial balance.
(c) Accounts Payable and Cash are both understated by $75. The trial balance would balance.
Diff: 3 Type: ES
Objective: 3-3
46
43) You have been hired to correct the following trial balance that was improperly recorded. All the
accounts have normal balances. Prepare a corrected trial balance in good form.
Kassie Korn Company

Trial Balance
April 30, 2016
Debit Credit
Cash 1,200
Equipment 2,000
B. Kassie, Capital 3,000
B. Kassie, Withdrawals 100
Service Fees 1,000
Rent Expense 200
Totals 5,700 3,700
Answer: Kassie Korn Company
Trial Balance
April 30, 2016
Debit Credit
Cash 1,200
Equipment 2,000
B. Kassie, Capital 3,000
B. Kassie, Withdrawals 100
Service Fees 1,000
Rent Expense 200
Totals 4,700 4,700
Diff: 2 Type: ES
Objective: 3-3
47
44) The following trial balance has been improperly recorded. All the accounts have normal balances.
Prepare a corrected trial balance in good form.
Home Town Cleaning Company

Trial Balance
March 31, 2017
Debit Credit
Cash 500
Rent Expense 200
Equipment 2,000
K. Carlson, Capital 2,300
K. Carlson, Withdrawals 100
Service Fees 1,000
Accounts Payable _____ 700
Totals 5,900 2,100
Answer:
Home Town Cleaning Company
Trial Balance
March 31, 2017
Debit Credit
Cash 500
Equipment 2,000
K. Carlson, Capital 2,300
K. Carlson, Withdrawals 100
Service Fees 1,000
Rent Expense 200
Totals 4,000 4,000
Diff: 1 Type: ES
Objective: 3-3
45) Jim is having some problems posting to the general ledger. He is not sure if the running balance
should be a debit or a credit. Can you give him some advice?
Answer: If the balance of the ledger account (Dr or Cr) is the same as the amount to be posted then the
two amounts should be added to come up with a new balance and this new balance will have the same
Dr of Cr as the original balance. However, if the balance and the amount to be posted are not both debit
or both credit, then you must take the difference between the two and the Dr or Cr balance will be
determined by whatever the balance is of the larger of the original balance and the amount posted.
Diff: 3 Type: ES
Objective: 3-3
48

College Accounting A Practical Approach Canadian 12th Edition Slater Test Bank 1

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College Accounting A Practical Approach Canadian 12th Edition Slater Test Bank 1

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COLLEGE ACCOUNTING A

PRACTICAL APPROACH CANADIAN

Test Bank: https://testbankpack.com/p/test-bank-for-college-

College Accounting, Cdn. Ed., 12e (Slater)

3.1 Journalizing: analyzing and recording business transactions into a journal.

2) the most logical reason to use a journal instead of T-accounts is

6) The first step of the accounting cycle is

7) A journal entry affecting three or more accounts is called a

8) Business transactions are first recorded in the

9) "PR" in the general journal and general ledger stands for

11) The general journal

12) The general ledger

13) The process of initially recording business transactions in a journal is called

16) How are explanations distinguished in the journal?

18) If you debit Prepaid Insurance, you most likely will

19) The entry to record the payment of office salaries would be

32) The general journal does not have a column titled

33) A calendar year is

34) Interim statements are prepared to

38) The trial balance lists the accounts

39) As Withdrawals increase,

41) If Accounts Payable has been debited, it is most likely that

42) If Accounts Payable has been credited, it is most likely that

51) If Cash has been debited, it is likely that

52) If Prepaid Rent has been debited, it is likely that

53) If Rent Expense has been debited, it is likely that

54) If Capital has been credited, it is likely that

56) If Accounts Payable has been debited, it is most likely that

57) If Accounts Payable has been credited, it is most likely that

58) The simplest form of a journal is a(n)

59) When the telephone bill is paid,

63) Transactions are entered in a journal by

65) Rent paid in advance is called a(n)

67) A fiscal year is always January 1 through December 31.

68) Transactions are listed in chronological order in the journal.

69) Rent paid in advance is a liability.

71) A ledger is called the book of final entry.

74) The debit is indented in a journal entry.

77) Interim reports are usually prepared once a year.

78) A calendar year is any twelve-month period.

80) A journal is considered to be a book of final entry.

81) A chart of accounts is a list of the accounts and their balances.

83) To record rent paid in advance, Prepaid Rent would be debited.

85) Revenue is recorded when earned.

86) Posting is the first step in recording transactions.

87) A fiscal year runs for any 12 consecutive months.

(b) Equipment 45,000

(c) Rent Expense 3,000

(d) Supplies 2,500

(e) Cash 2,000

(f) Cash 7,000

(g) Accounts Payable 1,200

(h) Wages Expense 6,250

(i) Cash 7,150

(j) Allen, Withdrawal 1,750

GENERAL JOURNAL Page 1

May 5 Accounts Payable 3,000

Cash Account 111

Accounts Receivable Account 121

Accounts Payable Account 211

Service Fees Account 411

Accounts Receivable Account 121

Accounts Payable Account 211