Question

1

Which of the following entries records the withdrawal of cash for personal use by D. Bill, the owner of a business?

a.Debit Cash and credit Salary Expense

b.Debit Cash and credit D. Bill, Drawing

c.Debit D. Bill, Drawing and credit Cash

d.Debit Salary Expense and credit Cash

e.None of these choices are correct.

2

A purchase of supplies on account should be recorded as

a.a debit to Supplies and a credit to Cash.

b.a debit to Supplies and a credit to Accounts Payable.

c.a debit to Accounts Payable and a credit to Supplies.

d.a debit to Supplies Expense and a credit to Accounts Receivable.

e.None of these choices are correct.

3

The order the financial statements are prepared is as follows:

a.statement of owner's equity, income statement, balance sheet

b.balance sheet, income statement, statement of owner's equity

c.income statement, statement of owner's equity, balance sheet

d.income statement, balance sheet, statement of owner's equity

4

R. Davis Company has the following accounts and balances at the end of the year:

Cash, $1,200
Accounts Receivable, $280
Office Equipment, $3,000
Accounts Payable, $1,400
Income from Services, $3,500
Rent Expense, $670
Salaries Expense, $1,000

R. Davis, Capital at the beginning of the year was $2,050. Rob Davis also withdrew $800 from the company during the year. What is the amount of total assets reported on the balance sheet?

a.$3,080

b.$9,800

c.$4,480

d.$1,480

5

Jackson Company received cash on account from customers, $2,300. The accountant would record a

a.credit to income from services, $2,300.

b.debit to income from services, $2,300.

c.credit to accounts receivable, $2,300.

d.credit to cash, $2,300.

e.debit to accounts receivable, $2,300

6

Rent Expense is reported on which financial statement?

a.statement of owner's equity

b.balance sheet

c.income statement

d.None of these listed answers are correct.

7

A credit may result in

a.an increase in a revenue account.

b.an increase in a liability account.

c.an increase in the Capital account.

d.a decrease in an asset account.

e.All of these choices are correct.

8

Errors can occur for which of the following reason(s)?

a.Recording only half an entry

b.Recording two debits and no credits

c.Recording incorrect amounts

d.Arithmetic

e.All of these listed answers are correct.

Answer 1

1.Which of the following entries records the withdrawal of cash for personal use by D. Bill, the owner of a business?

c.Debit D. Bill, Drawing and credit Cash

Drawing account is debited, and since is going out of business, it is credited.

2A purchase of supplies on account should be recorded as

b.a debit to Supplies and a credit to Accounts Payable.

3The order the financial statements are prepared is as follows:

c.income statement, statement of owner's equity, balance sheet

Net Income (loss) is required for Statement of Owner’s equity, and Owner’s Equity balance is required in Balance Sheet.

4R. Davis Company has the following accounts and balances at the end of the year:

Cash, $1,200
Accounts Receivable, $280
Office Equipment, $3,000
Accounts Payable, $1,400
Income from Services, $3,500
Rent Expense, $670
Salaries Expense, $1,000

R. Davis, Capital at the beginning of the year was $2,050. Rob Davis also withdrew $800 from the company during the year. What is the amount of total assets reported on the balance sheet?

c.$4,480
ASSETS included are:
Cash, $1,200
Accounts Receivable, $280
Office Equipment, $3,000

5Jackson Company received cash on account from customers, $2,300. The accountant would record a

c.credit to accounts receivable, $2,300.
Because Accounts receivable balance is decreased when cash is received from them.

6Rent Expense is reported on which financial statement?

c.income statement
Because its an ‘expense’ account.

7A credit may result in

e.All of these choices are correct.
A ‘credit’ increases revenue, liability and equity accounts while decreases asset and expense account balance.

8Errors can occur for which of the following reason(s)?

e.All of these listed answers are correct.