Name: Class: Date: STUDYGUIDE1(2022) Indicate the answer choice that best completes the statement or answers the question. 1. The process of recording a transaction in the journal is called a. ledgerizing b. journalizing c. posting d. summarizing

ANSWER : A

2. The balance in the supplies account before adjustment at the end of the year is $6,250. The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

a. debit Supplies, $1,500; credit Supplies Expense, $1,500 b. debit Supplies Expense, $4,750; credit Supplies, $4,750 c. debit Supplies Expense, $1,500; credit Supplies, $1,500 d. debit Supplies, $4,750; credit Supplies Expense, $4,750

ANSWER : D

3. March 6 Cash 2,500 Unearned Fees 2,500 ????????????. What is the best explanation for this journal entry? a. Received cash for services performed. b. Received cash for services to be performed in the future. c. Paid cash in advance for services to be performed. d. Performed services for which cash is owed.

ANSWER : B

4. Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? a. Utilities Expense b. Fees Earned c. Prepaid Insurance d. Insurance Expense

5. Which of the following accounts should be closed to Income Summary at the end of the fiscal year? a. Service Revenue b. Equipment c. Prepaid Insurance d. Unearned Rent 6. Which of the following statements is not true about liabilities? a. Cash received before a service is performed creates a liability. b. Liabilities do not include the employee portion of FICA. c. Account titles of liabilities often include the term payable. d. Liabilities include accumulated depreciation. 7. Which of the following is true about T accounts? Copyright Cengage Learning. Powered by Cognero.Page 1

Name: Class: Date: STUDYGUIDE1(2022) a. The left side of a T account is called the debit side. b. The left side of a T account is called the credit side. c. The right side of a T account is called the debit side. d. Transactions are first recorded in T accounts and then posted to the journal. 8. Owners equity is a. added to assets and the two are equal to liabilities b. added to liabilities and the two are equal to assets c. subtracted from liabilities and the net amount is equal to assets d. equal to the total of assets and liabilities 9. Which one of the statements below is not a purpose for the journal? a. to show increases and decreases in accounts b. to show a chronological order by date c. to show a complete transaction in one place d. to help locate errors 10. The balance of an account is determined by a. adding all of the debits to all of the credits b. always subtracting the debits from the credits c. always subtracting the credits from the debits d. adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum 11. The chart of accounts is designed to a. alphabetize the accounts to make reading easier for financial statement users b. organize accounts in order of dollar amount to simplify the accounting information for users c. summarize the transactions and determine ending account balances d. meet the information needs of a company's managers and other users of its financial statements 12. Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as a(n) a. asset b. liability c. contra asset d. capital 13. Which of the following is true regarding normal balances of accounts? a. All accounts have a normal debit balance. b. The normal balance if all acounts will have either a positive or negative balance. c. Accounts that have a normal debit balance will only have debit entries, never credit entries. d. The normal balance is on the increase side of the account. 14. Notes receivable due in 390 days appear on the Copyright Cengage Learning. Powered by Cognero.Page 2

Name: Class: Date: STUDYGUIDE1(2022) a. balance sheet in the current assets section b. balance sheet in the noncurrent assets section c. balance sheet in the current liabilities section d. income statement as an expense 15. In which of the following types of accounts are increases recorded by credits? a. revenues and liabilities b. drawing and assets c. liabilities and drawing d. expenses and liabilities 16. The chart of accounts for the Miguel Company includes the following: Account NameAccount Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Miguel, Capital 31 Miguel, Drawing 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 Page 3 of the journal contains the following transaction: Cash 640 Fees Earned 640 What posting references will be found in the journal entry? a. 41, 3 b. 3, 11 c. 11, 41 d. 11, 3 17. Which of the following entries records the collection of cash from cash customers? a. Fees Earned, debit; Cash, credit b. Fees Earned, debit; Accounts Receivable, credit c. Cash, debit; Fees Earned, credit d. Accounts Receivable, debit; Fees Earned, credit 18. Which of the following is an example of accrued revenue? a. snow removal services that have been paid for three months in advance b. snow removal services that have been provided but have not been billed or paid c. an agreement that has been signed for snow removal services for the next three months Copyright Cengage Learning. Powered by Cognero.Page 3

Name: Class: Date: STUDYGUIDE1(2022) d. snow removal services that has been provided and paid on the same day 19. The accounting concepts upon which deferrals and accruals are based is a. matching b. cost c. price-level adjustment d. conservatism 20. After net income is entered on the end-of-period spreadsheet, the Balance Sheet Debit and Credit columns must a. be the same amount as the total amount of the Income Statement Debit and Credit columns b. equal each other c. be the same amount as the total amount in the Adjusted Trial Balance Debit and Credit columns d. not be equal to each other and need not be the same total amounts as any other pair of columns on the end-of- period spreadsheet 21. The following adjusting journal entry does not include an explanation. Select the best explanation for the entry. Unearned Revenue 7,500 Fees Earned 7,500 ???????????????? a. Record payment of fees earned. b. Record fees earned at the end of the month. c. Record fees that have not been earned at the end of the month. d. Record payment of fees to be earned. 22. Which of the following groups of accounts increase with a credit? a. capital, revenues, expenses b. assets, capital, revenues c. liabilities, capital, revenues d. none of these 23. A debit signifies a decrease in a. assets b. expenses c. drawing d. revenues 24. The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances. Accounts payable $1,500 Fees earned $3,600 Accounts receivable 1,800 Insurance expense 1,300 Prepaid insurance 2,000 Land 3,000 Cash 3,200 Wages expense 1,400 Drawing 1,200 Capital 8,800 Copyright Cengage Learning. Powered by Cognero.Page 4

Name: Class: Date: STUDYGUIDE1(2022) Total assets are a. $10,000 b. $8,000 c. $9,700 d. $9,800 25. An overpayment error was discovered in computing and paying the wages of a Jamison Tree Trimming employee. When Jamison receives cash from the employee for the amount of the overpayment, which of the following entries will Jamison make? a. Cash, debit; Wages Expense, credit b. Wages Payable, debit; Wages Expense, credit c. Wages Expense, debit, Cash, credit d. Cash, debit; Wages Payable, credit