ACC 221 Study Guide - Final Guide: General Ledger, Accounts Payable, Retained Earnings

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30 Oct 2014

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ACC 221 Full Course Notes

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[ x ] debits and credits in asset accounts: debit: increases the asset account, credit: decreases the asset account. [ x ] debits and credits in liability & Equity accounts: debit: decreases the liability and equity accounts, credit: increases the liability and equity accounts. Balance lists each account in the accounting system and the ending balance in each of the accounts. The debit and credit columns are added-up and if they do not balance then an error has been made. Ledger the collection of all the accounts in the accounting system. Journal: where you post entries, must be made in the general journal and then posted to the general ledger. [x ] posting: placing the entry made in the general journal to the general ledger. [ x ] issue common stock recording: debit: cash, credit: common stock. [x ] loan from bank recording: debit: cash, credit: note payable. [ x ] purchase equipment recording: debit: equipment, credit: cash.

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QUESTION 21 A journal entry for a $75 payment for Rent expensewas posted as a debit to Salary expense and a credit to Cash. Thiserror will cause which of the following conditions on the trialbalance? A. The sum of the credits will equal the sum of thedebits. B. The sum of the debits will exceed the sum of the creditsby $75. C. The sum of the credits will exceed the sum of the debitsby $150. D. The sum of the debits will exceed the sum of thecredits by $150.

QUESTION 22 The business receives cash from a customer that isowed to the company "on account," based on services rendered to thecustomer previously. How does the collection of the cash affect theaccounting equation? A. Assets increase; owner's equity increases.B. Assets increase; liabilities increase. C. Assets decrease;owner's equity decreases. D. One asset increases; one assetdecreases

QUESTION 23 A business completes service to a client and sendsout a sales invoice. The amount will be collected from the customerat a later time. Which of the following would be TRUE at the timewhen the invoice is sent out? A. Total assets will decrease. B. Netincome will increase. C. Owner's equity will decrease. D. Totalliabilities will increase.

QUESTION 24 Which of the following accounts increases with adebit? A. Cash B. Interest Payable C. Accounts Payable D. Smith,Capital

QUESTION 25 The Accounts Receivable account of Nuptials Inc. isshown below. Accounts Receivable Dr Cr 26,000 3,500 5,000 Calculatethe ending balance of the account. A. $33,500 debit B. $31,000,debit C. $3,500, credit D. $27,500, debit

QUESTION 26 The following transactions for the month of Marchhave been journalized and posted to the proper accounts. Mar. 1Martinez invested $9,000 cash in his new design services business.Mar. 2 Paid the first month's rent of $800. Mar. 3 Purchasedequipment by paying $3,000 cash and executing a note payable for$5,000. Mar. 4 Purchased office supplies for $750 cash. Mar. 5Billed a client for $10,000 of design services completed. Mar. 6Received $8,000 on account for the services previously recorded.What is the balance in Cash? A. $13,250 B. $12,450 C. $15,450 D.$14,000

QUESTION 27 Which of the following sequences states the order inwhich a trial balance lists accounts? A. Equity â Assets âLiabilities B. Liabilities â Assets â Equity C. Assets â Equity âLiabilities D. Assets â Liabilities â Equity

QUESTION 28 Which of the following statements is FALSE? A. Atrial balance shows total amounts for assets, liabilities, andequity. B. A trial balance is created before the balance sheet isprepared. C. A trial balance presents data in debit and creditformat, but a balance sheet does not. D. A trial balance showstotal debits and total credits.

QUESTION 29 A promise received from a business's customers topay for goods and services that they received from the business iscalled a(n): A. revenue. B. account receivable. C. account payable.D. expense.

QUESTION 30 You can evaluate the economic resources, debt, andoverall financial position of a company in which of the followingfinancial statements? A. Income statement B. Balance sheet C.Statement of owner's equity D. Statement of cash flows

QUESTION 31 A book holding all of the accounts is called the: A.income statement. B. journal. C. ledger. D. balance sheet.

QUESTION 32 Which of the following groups of accounts BOTHnormally have a debit balance? A. Assets and Liabilities B.Liabilities and Owner's equity C. Revenues and Expenses D. Assetsand Expenses

QUESTION 33 A business buys $500 of supplies on account. Whichaccount is debited? A. Supplies B. Cash C. Service revenue D.Accounts payable

6. Which of the following is not a true statement about theaccounting equation and its elements? (Points: 3)
The accounting equation is Assets = Liabilities - Owners'Equity.
Assets are the resources a business possesses.
Liabilities represent debts of a business.
Examples of assets are cash, land, buildings, and equipment.
Owners' equity are the rights of the owners.

7. How does the rendering of services on account affect theaccounting equation? (Points: 3)
assets increase; owner's equity increases
assets decrease; owner's equity decrease
assets increase; owner's equity decreases
liabilities increase; owner's equity decreases

8. A credit balance in which of the following accounts wouldindicate a likely error? (Points: 3)
Fees Earned
Salary Expense
Janet James, Capital
Accounts Payable

9. Which of the following entries records the payment of an accountpayable? (Points: 3)
debit Cash; credit Accounts Payable
debit Accounts Receivable; credit Cash
debit Cash; credit Supplies Expense
debit Accounts Payable; credit Cash

10. Randomly listed below are the steps for preparing a trialbalance: (1.) Verify that the total of the Debit column equals thetotal of the Credit column. (2.) List the accounts from the ledgerand enter their debit or credit balance in the Debit or Creditcolumn of the trial balance. (3.) List the name of the company, thetitle of the trial balance, and the date the trial balance isprepared. (4.) Total the Debit and Credit columns of the trialbalance. (Points: 3)
(3), (2), (4), (1)
(2), (3), (4), (1)
(3), (2), (1), (4)
(4), (3), (2), (1)

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ACC 221 Study Guide - Final Guide: General Ledger, Accounts Payable, Retained Earnings

ACC 221 Full Course Notes

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