1. Evans Company completes a service engagement and bills a customer $50,000 on June 19, 2010. Included in the journal entry to record this transaction will be a:
a. debit to cash, $50,000.
b. credit to cash, $50,000.
c. credit to accounts receivable, $50,000.
d. credit to service revenue, $50,000.
2. A trial balance is a:
a. list of all the accounts with a six-digit account number used by a business.
b. place to record increases and decreases to a particular financial statement item’s balance.
c. chronological list of all recorded transactions.
d. list of all the accounts used by the business along with each account’s debit or credit balance at a point in time.
3. Bob Frederick, the owner of a delivery business, wants to know the balance of cash, accounts receivable, and sales on April 15 of the current period. Bob should look at what part of his accounting system?
a. The journal
b. The ledger
c. The balance sheet
d. The subsidiary journal
4. What is accomplished by preparing an unadjusted trial balance?
a. A firm can make sure the debits equal the credits in the accounting system.
b. A firm can make sure there are no errors in the accounting system.
c. A firm can identify accruals and deferrals.
d. All of the above
5. The data needed to prepare a trial balance comes from the
c. balance sheet.
d. post-closing income statement.
6. If the income statement includes revenues earned even if the cash has not been collected from customers yet, it means that the
a. closing entries have not been completed yet.
b. journal has errors in it.
c. accrual basis of accounting is being used.
d. adjusting entries have not been done yet.
7. Myers Company pays its employees every Friday for a five-day workweek (Monday through Friday). The employees earn $3,000 per day of work. If the company pays the employees $15,000 on Friday, October 2, 2009, the entry into the journal would include
a. a debit to wages expense for $15,000.
b. a debit to cash for $15,000.
c. a credit to wages payable for $15,000.
d. a debit to cash for $3,000.
8. Jules, Inc., had a June 1, 2010, balance of office supplies of $100. During June, the company purchased $900 more of the office supplies in exchange for cash. On June 30, 2010, the supplies were counted and it was determined that $200 worth of office supplies were left unused. The adjusting journal entry should include a
a. debit to supplies expense of $800.
b. debit to office supplies of $900.
c. credit to cash for $200.
d. credit to supplies expense of $800.
9. Why should closing entries be completed at the end of each period?
a. Certain accounts are not needed in the future.
b. It allows the trial balance and financial statements to be prepared.
c. All accounts must begin the next period at zero.
d. Temporary accounts need to start the next period with a zero balance.
10. Which of the following accounts should NOT be closed?
a. Accounts receivable
b. Interest revenue
c. Sales revenue
d. Wages expense