1. Type the correct answer in the box. Spell all words correctly.

Which type of account (real, personal, or nominal) includes the following expenses of a business?

Expenses like rent, transportation, and advertising are part of a business' ____________ account, because they are fictitious.

2. Select the correct answer.

What is the similarity between goodwill and factory equipment for a business?

A.

Neither has a physical presence.

B.

Both have a financial value.

C.

Both are tangible assets.

D.

Both need to be sold off within one year.

E.

Both are current assets.

3. Select the correct answer.

Harold is the chief financial officer of a software company. He takes a loan on behalf of the company for one million dollars. The company has to pay an annual interest of 2.5 percent on the loan. Under which accounting head will the company record the interest payable on the loan every year?

A.

long-term liabilities

B.

fixed assets

C.

current liabilities

D.

current assets

E.

income

4. Select the correct answer.

Libby is the sole proprietor of a travel agency. During the year, she withdrew $3,750 from her business for her personal use. How will the business account for this withdrawal?

A.

debit the distribution account

B.

credit the drawings account

C.

debit the capital account

D.

credit the capital account

E.

credit the profit account

5. Drag each label to the correct location on the table.

Match the transaction to the basis of accounting used by the business.

1) Paid $250 for prepaid telephone expenses over the next month. Business records it inthe next month.

2) Paid $250 for prepaid telephone expenses over the next month. Business records it in the current month.

3) Purchased an auto part worth $1,000 and paid $300. Business records $1,000 as the expense.

4) Purchased an auto part worth $1,000 and paid $300. Business records only $300 as the expense.

Accrual Basis of Accounting Cash Basis of Accounting

6. Select the correct answer from each drop-down menu.

What is the seventh step in the accounting cycle?

The fifth step in the accounting cycle is the preparation of trial balance. Further, the sixth step in an accounting cycle is ______________ 1. (Journaling) 2. (Posting) 3. ( Balancing) the adjustments made in the __________ 1. (ledger) 2. (worksheet) 3. (journal)

7. Type the correct answer in the box. Spell all words correctly.

What are the accounting heads that appear on the credit side of the T accounts?

Liability,______________, revenue, gains, and capital (equity) accounts have credit balances in the T account.

8. Select the correct answer.

An accountant passed the closing entries of the expenses and then closed all the expense accounts by crediting them. Which account should she debit to complete the dual aspect of the journal entry?

A.

income account

B.

income summary account

C.

revenue account

D.

purchase account

E.

equity account

9. Select the correct answer.

Joshua is the junior accountant of a construction company. He pays rent for its office building for the month of January. He credits the bank account and debits the rent account. What will be the change in the balance sheet on account of this transaction?

A.

total current liabilities increase

B.

total current assets decrease

C.

total fixed assets increase

D.

long term liabilities decrease

E.

total current liabilities decrease

10. Select the correct answer.

FTYZ Transport Inc. was supposed to pay wages amounting to $1,500 in March, which was the last month of its accounting period. However, Leeds Inc. failed to make the payment before the accounting period. What will be the adjusting journal entry passed by the accountant?

A.

Wages Account Debit Wages Payable Account Credit

B.

Wages Payable Account Debit Wages Account Credit

C.

Wages Account Debit Bank Account Credit

D.

Wages Payable Account Debit Bank Account Credit

E.

Wages Payable Account Debit Wages Account Debit

11. Select the correct answer from each drop-down menu.

What are the five main columns of a journal?

The five main columns of a journal are date, account,_______________ 1. (company's name) 2. (explanation) 3. (vendor's names) , PR, ______________ 1. (customer's names) 2. (debit) 3. (company's name), and credit.

12. Type the correct answer in the box. Spell all words correctly.

What are all expense accounts known as in accounting terminology?

All expense accounts are known as ____________ accounts, as they close at the end of the accounting period.

13. Select the correct answer.

A customer purchased some goods on credit from Stears Corp. The customer then returned $750 worth of goods to the company because he found them to be defective. What will the contra revenue journal entry by the accountant be?

A.

Customer Account (debit) 750; Sales Return Account (credit) 750

B.

Sales Return Account (debit) 750; Customer Account (credit) 750

C.

Sales Return Account (debit) 750; Sales Account (credit) 750

D.

Sales Account (debit) 750; Sales Return Account (credit) 750

E.

Sales Return Account (debit) 750; Cash Account (credit) 750

14. Select the correct answer.

Stear Corp. paid $35,000 as dividends to its shareholders for an accounting period. What is the entry in the journal of the company?

A.

Dividend Account (debit) 35,000; Cash Account (credit) 35,000

B.

Cash Account (debit) 35,000; Dividend Account (credit) 35,000

C.

Dividend Account (debit) 35,000; Shares Account (credit) 35,000

D.

Shares Account (debit) 35,000; Cash Account (credit) 35,000

E.

Shares Account (debit) 35,000; Dividend Account (credit) 35,000

15. Select the correct answer.

Why do journals have a Post Reference (PR) column?

A.

to cross reference between journal and trial balance

B.

to number in chronological order

C.

to cross referencing between journal and ledger

D.

to provide explanation for each transaction

E.

to refer to the date of each journal entry

16. Select the correct answer from each drop-down menu.

Which financial statements does a business prepare after making adjustments to the Trial Balance?

The business prepares financial statements like ___________ 1. (ledger) 2. (journal) 3. (income statement) and ___________ 1. (balance sheet) 2. (suspense account) 3. (cash book) after making necessary adjustments to the Trial Balance.

17. Type the correct answer in the box. Spell all words correctly.

Why is it necessary to prepare a Trial Balance?

A Trial Balance is prepared to check whether the debit balance __________ the credit balance, which is the primary goal of accounting.

18. Select the correct answer.

Kruger Heavy Machine Inc. has an opening cash balance of $2,000. During the year, it purchased raw materials worth $5,000, sold goods worth $10,000, and paid office rent of $4,000. What is the company's closing cash balance that it will carry forward into the next year?

A.

$9,000

B.

$3,000

C.

$7,000

D.

$6,000

19. Select the correct answer.

Elite Inc. has the following balances: Cash ($1,000), Equipment ($10,000), Salaries payable ($5,000), Building ($15,000), Land ($50,000), Equity ($50,000), and Loan payable ($10,000). An accountant prepares a Trial Balance, and it does not tally due to an unknown error. Which amount would the accountant record in a suspense account?

A.

$12,000

B.

$11,000

C.

$13,000

D.

$9,000

E.

$10,500

20. Drag each tile to the correct box.

Create the sequence showing the procedure followed by the record the company's transactions.

1) make an entry of the transaction in the journal

2) record the debit and credit balances of the ledger accounts in tabular form

3) calculate the total of the debit and credit columns

4) determine the closing balances of the ledger account

5) post the entries in the ledger