Question Details

ACCT 105 CHAPTER 2 THE RECORDING PROCESS 361-80 PART 5

61.	Assets normally show
a.	credit balances.
b.	debit balances.
c.	debit and credit balances.
d.	debit or credit balances.


	62.	An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?
a.	A debit balance in the dividends account
b.	A credit balance in an expense account
c.	A credit balance in a liabilities account
d.	A credit balance in a revenue account


	63.	If a company has overdrawn its bank balance, then
a.	its cash account will show a debit balance.
b.	its cash account will show a credit balance.
c.	the cash account debits will exceed the cash account credits.
d.	it cannot be detected by observing the balance of the cash account.


	64.	Which account below is not a subdivision of retained earnings?
a.	Dividends
b.	Revenues
c.	Expenses
d.	Common stock


	65.	When a company distributes dividends
a.	it doesn't have to be cash, it could be another asset.
b.	the dividends account will be increased with a credit.
c.	the retained earnings account will be directly increased with a debit.
d.	the dividends account will be decreased with a debit.


 
	66.	The Dividends 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 retained earnings.


	67.	Which of the following statements is incorrect?
a.	Expenses increase stockholders’ equity.
b.	Expenses have normal debit balances.
c.	Expenses decrease stockholders’ equity.
d.	Expenses are a negative factor in the computation of net income.


	68.	A credit to a liability account
a.	indicates an increase in the amount owed to creditors.
b.	indicates a decrease in the amount owed to creditors.
c.	is an error.
d.	must be accompanied by a debit to an asset account.


	69.	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.


	70.	TransAm Mail Service purchased equipment for $2,500. 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 retained earnings account for $2,100.
c.	credited another asset account for $400.
d.	credited a liability account for $2,100.


	71.	Radio Moscow Industries purchased supplies for $1,000. They paid $400 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $600. Which of the following would be the correct way to complete the recording of the transaction?
a.	Credit an asset account for $400.
b.	Credit another liability account for $400.
c.	Credit the retained earnings account for $400.
d.	Debit the retained earnings account for $400.

	72.	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.


	73.	On June 1, 2015, Portugal Inc. reported a cash balance of $12,000. During June, Portugal made deposits of $5,000 and made disbursements totalling $14,000. What is the cash balance at the end of June?
a.	$3,000 debit balance
b.	$17,000 debit balance
c.	$3,000 credit balance
d.	$2,000 credit balance


	74.	At January 1, 2015, Alligator Industries reported retained earnings of $150,000. During 2015, Alligator had a net loss of $30,000 and paid dividends of $15,000. At December 31, 2015, the amount of retained earnings is
a.	$105,000.
b.	$120,000.
c.	$135,000.
d.	$165,000.



	75.	Mt. Zion Inc. pays its employees twice a month, on the 7th and the 21st. On June 21, Mt. Zion Inc. paid employee salaries of $5,000. This transaction would
a.	increase stockholders’ equity by $5,000.
b.	decrease the balance in Salaries and Wages Expense by $5,000.
c.	decrease net income for the month by $5,000.
d.	be recorded by a $5,000 debit to Salaries and Wages Payable and a $4,000 credit to Salaries and Wages Expense.


	76.	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 stockholders 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.


 
	77	Chik Chik Company showed the following balances at the end of its first year:
Cash	$  6,000
Prepaid insurance	9,400
Accounts receivable	7,000
Accounts payable	5,600
Notes payable	8,400
Common stock	2,800
Dividends	1,400
Revenues	44,000
Expenses	35,000
What did Chik Chik Company show as total credits on its trial balance?
a.	$51,400
b.	$60,800
c.	$62,200
d.	$70,200


	78.	Electrelane Company showed the following balances at the end of its first year:
Cash	$  4,000
Prepaid insurance	7,000
Accounts receivable	5,000
Accounts payable	4,000
Notes payable	6,000
Common stock	2,000
Dividends	1,000
Revenues	32,000
Expenses	25,000

What did Electrelene Company show as total credits on its trial balance?
a.	$9,000
b.	$44,000
c.	$45,000
d.	$49,000


79.	During February 2015 its first month of operations, the stockholders of Ariel Pink Enterprises invested cash of $50,000. Ariel had cash revenues of $10,000 and paid expenses of $14,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?
a.	$4,000 credit
b.	$4,000 debit
c.	$46,000 debit
d.	$54,000 debit


 
	80.	At January 31, 2015, the balance in Aislers Inc.- supplies account was $750. During February, Aislers purchased supplies of $900 and used supplies of $1,125. At the end of February, the balance in the supplies account should be
a.	$525 debit.
b.	$975 debit.
c.	$525 credit.
d.	$775 debit.