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Strayer University - ACC 556week 2 quiz. Graded A
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Strayer University - ACC 556week 2 quiz

1.

Expenses decrease retained earnings.

 

A.

True

 

B.

False


 

 

2.

The effect on the basic accounting equation of performing services for cash are to

 

A.

increase assets and decrease stockholders' equity.

 

B.

increase assets and increase stockholders' equity.

 

C.

increase assets and increase liabilities.

 

D.

increase liabilities and increase stockholders' equity.


 

 

3.

Genesis Company buys equipment for $900 machine on credit. This transaction will immediately affect the

 

A.

income statement only.

 

B.

balance sheet only.

 

C.

income statement and retained earnings statement only.

 

D.

income statement, retained earnings statement, and balance sheet.


 

 

4.

Which of the following events is not recorded in the accounting records?

 

A.

Equipment is purchased on account.

 

B.

An employee is terminated.

 

C.

A cash investment is made into the business.

 

D.

The owner withdraws cash for personal use.

 

.

 

5.

During 2014, Gibson Company assets decreased $50,000 and its liabilities decreased $90,000. Its stockholders' equity

 

A.

increased $40,000.

 

B.

decreased $140,000.

 

C.

decreased $40,000.

 

D.

increased $140,000.


 

 

6.

Retained earnings is decreased by

 

A.

revenues.

 

B.

assets.

 

C.

expenses.

 

D.

owner's investments.


 

 

7.

If an expense is paid with cash

 

A.

assets will decrease.

 

B.

retained earnings will increase.

 

C.

liabilities will increase.

 

D.

expenses will decrease.


 

 

8.

If cash is received in advance from a customer

 

A.

assets will decrease.

 

B.

retained earnings will increase.

 

C.

liabilities will increase.

 

D.

stockholders' equity will decrease.


 

 

9.

Receipt of an unearned revenue

 

A.

increases an asset; increases a liability.

 

B.

increases an asset; increases a revenue.

 

C.

decreases a liability; increases stockholders' equity.

 

D.

decreases a revenue; increase stockholders' equity.


 

 

10.

Payment of a dividend

A.

increases expenses; decreases cash.

 

B.

decreases cash; increases stockholders' equity.

 

C.

decreases cash; decreases retained earnings.

 

D.

increases retained earnings; increases expenses.


 

 

11.

If a company receives cash from a customer before performing services for the customer, then

 

A.

assets increase and liabilities decrease.

 

B.

assets increase and stockholders' equity increases.

 

C.

assets decrease and liabilities increase.

 

D.

assets increase and liabilities increase.


 

 

12.

If total liabilities increase by $5,000 then

 

A.

assets decrease by $5,000.

 

B.

stockholders' equity increase by $5,000.

 

C.

assets increase by $5,000, or stockholders' equity decrease by $5,000.

 

D.

assets and stockholders' equity each increase by $2,500.


 

 

13.

Every account has a left or credit side and a right or debit side.

A.

True

 

B.

False


 

 

14.

Every transaction affects at least two accounts.

A.

True

 

B.

False


 

 

15.

An account is a part of the financial information system and is described by all except which one of the following?

 

A.

An account has a debit and credit side.

 

B.

An account is a source document.

 

C.

An account consists of three parts.

 

D.

An account has a title.


 

 

16.

Which statement about an account is true?

 

A.

In its simplest form, an account consists of two parts.

 

B.

An account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items.

 

C.

There are separate accounts for specific assets and liabilities but only one account for stockholders' equity items.

 

D.

The right side of an account is the debit side.


 

 

17.

Assets are increased by credits.

A.

True

 

B.

False


 

 

18.

Debits

A.

increase both assets and liabilities.

 

B.

decrease both assets and liabilities.

 

C.

increase assets and decrease liabilities.

 

D.

decrease assets and increase liabilities.


 

 

19.

A revenue account

 

A.

is increased by debits.

 

B.

is decreased by credits.

 

C.

has a normal balance of a debit.

 

D.

is increased by credits.

 

.

 

20.

Which accounts normally have debit balances?

A.

Assets, expenses, and revenues

 

B.

Assets, expenses, and retained earnings

 

C.

Assets, liabilities, and dividends

 

D.

Assets, dividends, and expenses


 

 

21.

What effects occur when an account payable is paid with cash?

 

A.

Decreases stockholders' equity and decreases liabilities

 

B.

Increases assets and decreases liabilities

 

C.

Decreases assets and increases stockholders' equity

 

D.

Decreases assets and decreases liabilities


 

 

22.

Accounts with normal debit balances include

A.

assets and liabilities.

 

B.

liabilities and expenses.

 

C.

stockholders' equity and revenues.

 

D.

expenses and assets.


 

 

23.

Accounts with normal credit balances include

A.

assets and liabilities.

 

B.

revenues and expenses.

 

C.

liabilities and stockholders' equity.

 

D.

revenues and assets.


 

 

24.

An account has $300 on the debit side and $900 on the credit side. How much is the account balance?

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