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Exam 2: Double-Entry Accounting

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Question 101

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The normal balance of revenue accounts is a credit.

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Question 102

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The totals at the bottom of the trial balance and the totals at the bottom of the balance sheet both show equality and balancing, and therefore should be equal.

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Question 103

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The process of transferring the debits and credits from the journal entries to the accounts is called

In a basic chart of accounts, each account number has two digits. The first digit indicates the major account group to which the account belongs. Which of the following correctly identifies the major account groups typically represented by the numbers 1 through 5?

Below is the unadjusted trial balance for Dawson Designs. REQUIRED: (1) Identify the errors in the trial balance. All accounts have normal balances. (2) Prepare a corrected trial balance.

Expenses result from selling services or products to customers.

Faso Fabricating, Inc. and Spinoza Fabrication Corp. are in the same industry and are located in the same region of the country. They have condensed income statements as shown. ​ (a) Prepare a horizontal analysis for the two companies. (b) Analyze the changes from Year 1 to Year 2 for both companies.

Accounts in the ledger are usually maintained in alphabetical order.

A chart of accounts is

Which of the following statements is not true about liabilities?

Increases and decreases in various types of accounts are listed below. In each case, indicate by "Dr." or "Cr." (a) whether the change in the account would be recorded as a debit or a credit and (b) whether the normal balance of the account is a debit or a credit.

The recording of cash payments from the cash account is done by entering the amount as a credit.

Journalizing is the process of entering amounts in the ledger.

State for each account whether it is likely to have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries when recording business transactions during the month. Also, indicate the normal balance of each account. 1.Fees Earned 4.Supplies 2.Utilities Expense 5.Cash 3.Accounts Payable 6.Accounts Receivable

Which of the following entries records the acquisition of office supplies on account?

Stockholders' equity is reduced by the amount in the dividends account.

A debit may signify a(n)

When a transposition error is made on the trial balance, the difference between the debit and credit totals on the trial balance will be

Listed below are accounts to use for transactions (a) through (d), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

Journalizing always eliminates fraudulent activity.