The purchase of office equipment on credit has what effect on the accounting equation?
a. Assets decrease and owners’ equity decreases
b. Assets increase and liabilities increase
c. Assets decrease and liabilities decrease
d. Liabilities increase and owners’ equity decreases
Question 2
The Kelly Company purchased a building for $75,000 in cash. What is the effect on current assets?
a. Decrease in current assets
b. No effect on current assets
c. Unable to determine
d. Increase in current assets
Question 3
The correct term for the process of transferring amounts from a book of original entry to specific assets, liabilities, revenues, expenses, and owners’ equity items is
a. Journalizing
b. Posting
c. Double-entry system
d. Debit
e. Credit
Question 4
The system of accounting in which there are at least two accounts affected in every transaction so that the accounting equation stays in balance is a(an).
a. Posting
b. Debit
c. Journalizing
d. Double-entry system
e. Credit
Question 5
A file or book which contains a record for all accounts used by a company, including the account balance, is called a
a. general ledger
b. chart of accounts
c. trial balance
d. general journal
Question 6
Debit entries are used to
a. increase liability accounts
b. increase revenue accounts
c. increase asset accounts
d. decrease expense accounts
Question 7
All of the following accounts have normal credit balances except
a. Common Stock (Capital Stock)
b. Investments
c. Service Revenue
d. Accounts Payable
Question 8
Which pair of accounts has the same set of rules for debit and credit entries?
a. Common Stock (Capital Stock) and Accounts Payable
b. Cash and Notes Payable
c. Salaries Expense and Retained Earnings
d. Sales Revenue and Accounts Receivable
Question 9 1 points Save
Minmier Rentals, Inc.
Use the five transactions for Minmier Rentals described below to answer the questions that follow.
Transactions
Oct 1 Minmier purchases two new saws on credit at $375 each. The saws are added to Minmier’s rental inventory. Payment is due in 30 days.
8 Minmier accepts advance deposits for tool rentals of $75.
15 Minmier receives a bill from Local Electric Company for $150. Payment is due in 30 days.
20 Customers are charged $750 by Minmier for tool rentals. Payment is due from the customers in 30 days.
31 Minmier receives $500 in payments from the customers that were billed for rentals on October 20.
Refer to Minmier Rentals, Inc. The journal entry to record the Oct. 20 transaction is
a. Tool Rental Revenue 750
Cash 750
b. Tool Rental Revenue 750
Accounts Payable 750
c. Accounts Receivable 750
Tool Rental Revenue 750
d. Cash 750
Accounts Receivable 750
Question 10 1 points Save
Minmier Rentals, Inc.
Use the five transactions for Minmier Rentals described below to answer the questions that follow.
Transactions
Oct 1 Minmier purchases two new saws on credit at $375 each. The saws are added to Minmier’s rental inventory. Payment is due in 30 days.
8 Minmier accepts advance deposits for tool rentals of $75.
15 Minmier receives a bill from Local Electric Company for $150. Payment is due in 30 days.
20 Customers are charged $750 by Minmier for tool rentals. Payment is due from the customers in 30 days.
31 Minmier receives $500 in payments from the customers that were billed for rentals on October 20.
Refer to Minmier Rentals, Inc. The journal entry to record the October 31 transaction is
a. Cash 500
Accounts Receivable 500
b. Accounts Receivable 500
Tool Rental Revenue 500
c. Tool Rental Revenue 500
Cash 500
d. Accounts Payable 500
Cash 500
Question 11
If the sum of the debits and credits in a trial balance is not equal, then
a. there is no concern because the two amounts are not meant to be equal.
b. it is safe to proceed with the preparation of financial statements.
c. most likely an error was made in posting journal entries to the general ledger or in preparing the trial balance.
d. the chart of accounts also does not balance.