Accounting Chapter 2 Study Guide MC

  1. An account is an individual accouting record of increases and decreases in specific ____
    asets, liability and stocholder's equity items.
  2. Credits:
    A Increase both assets and liabilites
    B decrease both assets and liabilities
    C increases assets and decrease liabilites
    D decrease assets and increase liabilites
    D decrease assets and increase liabilites
  3. An account which is increased by a credit is:
    A an asset account
    B a liability account
    C a dividends account
    D an expense account
    an asset account dividends account and an expense account are all acounds that have normal devit balances thus, they are increased by debits so solution is is B liabilities account
  4. Which of the folowing rules is incorrect?
    A Credit decrease the dividends account
    B Debits increase the retained earnings account
    C Credits increase revenue accounts
    D Devits decrease liability accounts
    B Debits decrese the retained earnigns account because the retained earnings account has a credit balance as its normal balance. Choices a, c and d are all correct rules concerning increasing or decreasing accounts
  5. An account which is increased by a debit is a:
    Dividends account
  6. An account which is increased by a credit is a:
    Revenue account
  7. What is the correct sequence of the steps in the recoridng process?
    Analyzing, journalizing, posting
  8. The column in the general journal which is not used during journalizing is the:
    A Date column
    B account title column
    C reference column
    D debit amount column
    reference column, the referecnce column is used later when the jurnal entries are posted to the ledger
  9. Which of the following is a false statement?
    A The account Revenue from Fees is increased with a credit
    B A compound entry is when two or more accoutns are required in one journal entry.
    C Retained Earnings is increased by a credit entry.
    D All transactiosn are initially recorded in a jounal.
    b, "a compound entry is whentwo or more accounts are required in one journal entry" because a compound entry is when three or more accoutns are required in one journal entry.
  10. What is not considered a significant contribution of the journal to the recording process?
    The Journal provies a means of accumulating in one place all the information about changes in account balances
  11. McClory Company purchases equipment for $900 and supplies for $300 from Rudnicky Co. for 1,200 cash. The entry for this transaction will incude a:
    Devit to equipment $900 and devit to supplies $300 for McClory
  12. Reiner Company purchases $300 of equipment from Laventhal Company on credit. Reiner will enter the transaction in the journal with a:
    Credit to accounts payable and a devit to equipment
  13. Szykowny Co. Buys a machine from Schott Company paying half in chash and putting the balance on account. The journal entry for this transaction by Szykowny will in clude a:
    credit toa ccoutns payable and a credit to cash
  14. Hrubec Company pays
    4900 cash for a one-year insurance policy on July 1 2--5. The policy will expire on June 30, 2009. The entry on July 1 2008 is:
    devit prepaired insureance $900; Credit cash $900
  15. Kevin Walsh, Inc. Pays $300 cash dividend. The entry for this transaction will inculde a debit of $300 to:
    A Dividends
    B Dividend Income
    C Dividends Expense
    D Salaries Expense
  16. Vicky Wagner Dance Studio bills a client for dancing lessons earned during the past week. The journal entry will include a credit to:

    A Retained Earnings
    B unearned Dance Fees
    C Dance Fees Earned
    D Accounts Receivable
    Dance fees earned
  17. Golden Pork Company recieves $400 from a customer on October 15 in payment f balance due for services billed on October 1. The entry by Golden Pork Company will include a credit of $400 to?

    A Notes Recievable
    B Service Revenue
    C Accounts Receivable
    D Unearned Service Revenue
    Accounts Recievable
  18. On Octover 3, Mike Baker, Co. recived a cash payment for services previosly billed to a client. The company paid its telephone bill and it also bought equipment on credit. For the three transaction at least one of the entries will include a:
    A Credit to REtained Earnings
    B Credit to Notes Payable
    C Devit to Accounts Recievable
    D Credit to Accounts Payable
    credit to Accounts Payable
  19. The chart of accounts is a:
    listing of the accounts and the account numbers which identify their location in the ledger
  20. A trial balance will not balance if:
    a journal is only partially posted
Card Set
Accounting Chapter 2 Study Guide MC
Multiple Choice for Accounting Chapter 2