Accounting Quiz

1-Which of the following correctly identifies normal balances of accounts? a. Assets Debit Liabilities Credit Owner's Equity Credit Revenues Debit Expenses Credit b. Assets Liabilities Owner's Equity Revenues Expenses Debit Credit Credit Credit Credit c. Assets Liabilities Owner's Equity Revenues Expenses Credit Debit Debit Credit Debit d. Assets Liabilities Owner's Equity Revenues Expenses Debit Credit Credit Credit Debit 2-A debit is not the normal balance for which account listed below? a. Drawings b. Service Revenue c. Accounts Receivable d. Cash 3-An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction? a. Credit an asset account for $800. b. Credit another liability account for $800. c. Debit an owner's equity account for $800. d. Credit an owner's equity account for $800. 4-An account will have a credit balance if the a. credits exceed the debits. b. first transaction entered was a credit. c. debits exceed the credits. d.last transaction entered was a credit 5-The drawings account a. appears on the income statement along with the expenses of the business. b. must show transactions every accounting period. c. is increased with debits and decreased with credits. d. is not a proper subdivision of owner's equity 6-Which of the following statements is not true? a. Expenses increase owner's equity. b. Expenses have normal debit balances. c. Expenses decrease owner's equity. d. Expenses are a negative factor in the computation of net income. 7-In the first month of operations, the total of the debit entries to the cash account amounted to $1,200 and the total of the credit entries to the cash account amounted to $800. The cash account has a(n) a. $800 credit balance. b. $1,200 debit balance. c. $400 debit balance. d.$400 credit balance. 8-TransAm Mail Service purchased equipment for $2,000. TransAm paid $400 in cash and signed a note for the balance. TransAm debited the Equipment account, credited Cash and a. nothing further must be done. b. debited the Capital account for $1,600. c. credited another asset account for $400. d. credited a liability account for $1,600. 9-On January 14, Edamame Industries purchased supplies of $700 on account. The entry to record the purchase will include a. a debit to Supplies and a credit to Accounts Payable. b. a debit to Supplies Expense and a credit to Accounts Receivable. c. a debit to Supplies and a credit to Cash. d. a debit to Accounts Receivable and a credit to Supplies. 10-At January 1, 2014, Alligator Industries reported owner’s equity of $150,000. During 2014, Alligator had a net loss of $30,000 and owner drawings of $15,000. At December 31, 2014, the amount of owner’s equity is a. $105,000. b. $120,000. c. $135,000. d .$165,000. 11-An account consists of a. one part. b. two parts. c. three parts. d. four parts. 12-Which one of the following is not a part of an account? a. Credit side b. Trial balance c. Debit side d. Title 13-Which account below is not a subdivision of owner's equity? a. Drawings b. Revenues c. Expenses d.Liabilities 14-In the first month of operations for Gallowsbird Industries, the total of the debit entries to the cash account amounted to $36,000 ($16,000 investment by the owner and revenues of $20,000). The total of the credit entries to the cash account amounted to $22,000 (purchase of equipment $8,000 and payment of expenses $14,000). At the end of the month, the cash account has a(n) a. $6,000 credit balance. b. $6,000 debit balance. c. $14,000 debit balance. d.$14,000 credit balance 15-Net income is gross profit less a. financing expenses. b. operating expenses. c. other expenses and losses. d. other expenses. 16-Two categories of expenses for merchandising companies are a. cost of goods sold and financing expenses. b. operating expenses and financing expenses. c. cost of goods sold and operating expenses. d.sales and cost of goods sold 17-Sales revenue less cost of goods sold is called a. gross profit. b. net profit. c. net income. d.marginal income 18-After gross profit is calculated, operating expenses are deducted to determine a. gross margin. b. net income. c. gross profit on sales. d. .net margin 19-Which of the following expressions is incorrect? a. Gross profit – operating expenses = net income b. Sales revenue – cost of goods sold – operating expenses = net income c. Net income + operating expenses = gross profit d. Operating expenses – cost of goods sold = gross profit 20-Which of the following is a true statement about inventory systems? a. Periodic inventory systems require more detailed inventory records. b. Perpetual inventory systems require more detailed inventory records. c. A periodic system requires cost of goods sold be determined after each sale. d.A perpetual system determines cost of goods sold only at the end of the accounting period