Download A..…F….

Principles of Accounting
Asst.Prof.Dr. Panchat Akarak
[email protected]
School of Accounting
Chaingrai Rajabhat University
Accounting I
1
Exercises
Vocabulary
Matching
True-False questions
Multiple choice questions
Vocabulary
• Put (/) in the appropriate column.
Items
1. Cash
2. Equipment
3. Building
4. Loan
5. Accounts Payable
6. Note Receivable
7. Drawing
8. Supplies
9. Capital
Assets Liabilities Equity
/
/
/
/
/
/
/
/
/
Vocabulary
• Put (/) in the appropriate column.
Items
1. Interest expenses
2. Depreciation expenses
3. Rent expenses
4. Loan fees
5. Bank charges
6. Salaries
7. Interest revenues
8. Service revenues
9. Utilities expenses
Revenues
/
/
/
Expenses
/
/
/
/
/
/
/
Matching
• Referring to the terms listed in the left and
right column, place the appropriate letter next
to the corresponding description.
a.
b.
c.
d.
e.
f.
g.
Journalizing
Cross-indexing
Simple journal entry
Charge
Posting
Compound journal entry
Trial balance
h. Double entry
i. Journal
j. Real accounts
k. Nominal accounts
l. Debit side
m. Credit side
n. Expenses
Matching
…f… 1. Entry involving more than one debit and/or
credit.
…e… 2. Recording in the ledger the information
contained in the journal.
…h… 3. This procedure is related to the duality concept
indicating that every transaction has a twoside effect.
…d… 4. Synonym for debit.
…g… 5. Provides a proof of the arithmetic accuracy of
the recording process by listing the ledger accounts
and their debit or credit balances.
Matching
…c… 6. Entry involving only one debit and one
credit.
…i… 7. Is a chronological record of all business
transactions and may also be called the book
of original entry.
…b…8. Placing of the ledger account numbers in the
positing reference column of the journal and
placing the journal page number in the
posting reference column of the ledger account.
Matching
…a… 9.
Entering of a transaction in the book of
original entry.
…m…
10. The right side of an account.
…n… 11. Cost of the use of services or things for
the purpose of generating revenue.
…k… 12. Revenue and expense accounts that
appear on the income statement.
Solutions-Matching
1
2
3
4
5
6
F
E
D
H
G
C
7
8
9
10
11
12
I
B
A
M
N
K
True-False Questions
• Indicate whether the following
statements are true or false by
inserting in the blank space provided
a capital “T” for True or “F” for false.
1. Cash and land normally have a
debit balance. A……T…..
2. A general journal entry having two
debits and a credit is a simple entry.
A……F…..may be compound entry
True-False Questions
3. Account numbers are entered in
the posting reference column of
the two column general journal at
the time the transactions are
recorded in the journal.
A…F…….. There are posted to
the ledger
True-False Questions
4. The trial balance would locate
the following error: Land was
purchased for cash but instead of
crediting cash, the credit was made
to accounts Receivable.
A……F…..
True-False Questions
5. A debit to the owner’s drawing
account would indicate an increase
in expenses. A……F…..
6. Transactions are recorded in the
journal in chronological order.
A……T…..
True-False Questions
7. Assets are recorded at cost for
accounting purposes because cost
is objective and value is subjective.
A…T……..
8. One of the purposes of the
ledger is to record the complete
effect of a transaction in one place.
A…F……..
True-False Questions
9. A purchase of land or equipment for
cash would cause total assets to
increase by the cost of the land or
equipment.
A…F……..
10. The fact that an expense in recognized
on the income statement indicates that
an equivalent outlay of cash has been
made in the same period.
A……F…..
True-False Questions
• 11. A liability account normally has a
debit balance.
A…F……..
• 12. The primary function of the general
ledger is to store transactions by account
classification and to provide a balance for
each account.
A…T……..
True-False Questions
• 13. Expense accounts usually have debit
balances and show the cost associated with
producing revenue during an accounting
period.
A…T……..
• 14. Liabilities represent claims against the
company’s assets and may be in the form of
accounts payable or notes payable.
A…T……..
True-False Questions
• 15. All of the accounts of a specific
business enterprise are referred to as a
ledger.
A…T……..
• 16. A trial balance proves that no errors
were made in recording transactions,
posting, and in preparing the trial
balance.
A……F…..
True-False Questions
• 17. A journal aids in the division of labor by
allowing one person to journalize entries
while another individual may post these
entries.
A…T……..
• 18. Every transaction always affects two or
more accounts in a double-entry accounting
system.
A……T…..
True-False Questions
• 19. if only two liability accounts are affected
by a transaction, the balance of one account
must be increased and the balance of the
other decreased in recording this transaction.
A……T…..
• 20. A journal provides a complete collection
of all of the accounts of an entity.
A……F……
True-False Questions
• 21. Revenue is the difference between the
selling price of a service and the cost of
providing such service.
A……F…..
• 22. The double-entry system of accounting
requires that the debits and credits of each
entry are equal. Therefore, since a particular
entry has equal debits and credits, this entry
must be correct.
A..…F….
True-False Questions
• 23. Journalizing a transaction requires
more knowledge than posting a
transaction.
A……T…..
• 24. The purchase of an asset for
immediate consumption that will not be
paid for until next mount would cause
liabilities to increase and owner’s equity
to decrease.
A…..T…..
True-False Questions
• 25. A cash expenditure for insurance and
utilities would cause assets to be
increased but owner’s equity to
decreased.
A……F…..
Solutions-True-False Questions
1
2
3
4
5
6
7
8
9
10
T
F
F
F
F
T
T
F
F
F
11
12
13
14
15
16
17
18
19
20
F
T
T
T
T
F
T
T
T
F
21
22
23
24
25
F
F
T
T
F
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 1. Which of the following would not fall under
the definition of an asset?
a. Land
b. Debtors
c. Machinery
d. Owner’s equity
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 2. Which one of the following items would fall
under the definition of a liability ?
a. Cash
b. Debtors
c. Owner’s equity
d. Tax owed
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 3. Which of the following statements are false?
a. A liability is a debt for your business.
b. Debtors are a debt for your business.
c. The accounting equation shows how much
of your assets belong to the owner, and
how much ‘belong’ to people outside the
business.
d. If you cannot work out a value for an item that
will bring you future benefits then you cannot
keep this as an asset in your records.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 4. A business has the following items in it:
-Land
$1,000,000
-Cash
$10,000
-Machinery $20,000
-Debt
$0
-Owner’s equity?
What is the value of the Owner’s equity?
a.
$1,000,000
b.
$1,020,000
c.
$1,010,000
d.
S1,030,000
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 5. A business has the following items in it:
Land
$1,000,000
-Cash
-Machinery $20,000
-Loan
-Owner’s equity?
What is the value of the Owner’s equity?
a.
$ 500,000
b.
$1,000,000
c.
$ 530,000
d.
S1,030,000
$10,000
$500,000
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 6. A business has the follow items in it:
-Owner’s equity $600,000
-Total Liabilities $1,400,000
-Assets ?
What is the value of the assets in this business?
a. $ 600,000
b. $ 800,000
c. $1,400,000
d. $2,000,000
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 7. A business has the following items in it:?
-Land
$1,500,000
-Machinery
$80,000
-Owner’s equity $900,000
-Cash
-Loan
-Creditors
What is the value of the Creditors?
a.
b.
c.
d.
$ 200,000
$ 700,000
$ 800,000
S1,100,000
$20,000
$500,000
?
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 8. A business has the following items in it:
-Land
?
-Vehicles
$600,000
-Owner’s equity $1,000,000
-Debtors
$30,000
What is the value of the Land?
a.
b.
c.
d.
$ 1,000,000
$ 1,550,000
$ 890,000
S 750,000
-Cash
-Loan
-Creditors
$30,000
$500,000
$50,000
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 9. Which of the following statements are true?
a. A business whose liabilities are greater than
its assets has a had financial position.
b. A business whose liabilities are greater than
its owner’s equity has a bad financial position.
c. A business whose assets are greater than its
owner’s equity has a bad financial position.
d. a and b
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
• 10. Mr. Art commenced business with cash.
The Journal entry is:
a. Dr. Capital Cr. Cash
b. Dr. Cash
Cr. Mr. Art
c. Dr. Cash
Cr. Capital Mr.Art
d. Dr. Capital Cr. Mr.Art
SOLUTIONS
• Multiple Choice Questions
1
6
d
d
2
3
4
5
d
b
d
c
7
8
9
10
a
c
c
c
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
1. The determination of periodic net income involves
(1) the revenue recognized during the period and
(2) the expenses to be allocated to the period.
This is frequently referred to as:
a. Matching of revenues and expenses.
b. Cost accounting.
c. Balancing the accounts.
e. None of these.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
2. If $500 cash and a $2,000 note are given in
exchange for a delivery truck for use in a business.
a. The owner’s equity is increased.
b. Total assets are decreased.
c. Total liabilities are decreased.
d. None of the above is true.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
3. Purchased office equipment and office supplies on
credit from Doug Equipment Company.
What is the entry?’
a. Debit office equipment, debit office supplies on
Hand; credit accounts payable
b. Debit equipment; credit office supplies expense.
c. Debit office equipment and office supplies on Hand;
credit cash
d. Debit office Equipment; credit Doug Equipment Company
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
4. Returned for credit a portion of the office supplies
purchased in question 3 above. What entry is
required?
a. Debit office Supplies on Hand; and Office Equipment
b. Debit Cash; Credit Office Supplies on Hand
and Office Equipment
c. Debit Accounts Payable; credit Office Supplies on Hand
d. Debit Office Equipment; credit Doug Equipment Company
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
5. Which of the following is not a business asset?
a. Plant equipment
b. Accounts receivable
c. Owner’s capital
d. Cash in bank
e. All of the above are business assets.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
6. Expenses for an accounting period are:
a. The costs of goods and/ or services consumed in
the earning of the revenue of the period.
b. Assets whose usefulness expired this period in the
earning of revenues.
c. Only the amounts actually pain for services used
up during the period.
d. A and B, but not C.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
7. Completed legal work for public Service Company
on credit. What entry should be made?
a. Debit Revenue from Legal Fees; credit Cash
b. Debit Cash; credit Ben Ball, Capital
c. Debit Cash; Credit Public Service Company
d. Debit Accounts Receivable; Credit Revenues from
legal Fees
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
8. Which of the following statements about the
accounting equation is Not true? A transaction
involving only two items may:
a. Add to two items on the same side of the equation.
b. Subtract from both side of the equation.
c. Transfer an amount between the items on one side
of the equation and have no effect on the other
side of the equation.
e. Add to both sides of the equation.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
9. A $150 debit of Office Equipment was entered in
the account as a $150 credit. This caused the trial
balance to be out of balance by:
a. $150
b. $300
c. $75
d. $450
e. None of these.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
10. Owner’s equity is the term applies to which of
the following?
a. Amount of cash the owner invested in the company
10 years ago
b. Residual claim against the assets of the business after the
total liabilities are deducted
c. Is also referred to as capital, proprietorship. And net worth
d. Residual cash of the business after the total liabilities
are deducted
e. B and C are correct.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
11. The accounting concept of “asset” has may
attributes. Which of the following are attributes
of an asset?
a. It is something that is scarce.
b. It has value in exchange for future use.
c. It is owned and/or under the control of
the business.
d. A and B, but not C.
e. A, B, and C are all correct.
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
12. Received $550 for services performed in the
current period. What is the entry?
a. Cash
550
Revenue
550
b. Cash
550
Accounts Payable
550
c. Revenue
550
Accounts Receivable
550
d. Accounts Receivable 550
Cash
550
e. None of the above
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
13. Debit entries:
a. Decrease assets and expenses and increase liabilities, revenue,
and owner’s equity.
b. Decrease assets and revenue and increase expenses, liabilities,
and owner’s equity
c. Increase assets and expenses and decrease liabilities, revenue,
and owner’s equity
d. Increase assets and owner’s equity and decrease expenses, revenue
and owner’s equity
e. Increase assets and decrease expenses, liabilities, revenue,
and owner’s equity
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
14. Purchased equipment for $1,000 cash; the journal
entry to record this is:
a. Equipment
1,000
Accounts payable
1,000
b. Cash
1,000
Equipment
1,000
c. Supplies
1,000
Cash
1,000
d. Equipment
1,000
Cash
1,000
Multiple Choice Questions
For each of the following questions, indicate the single,
best answer by circling the appropriate letter.
15. Ben Smith wrote a check on his law practice bank
account in payment of the rent on his personal apartment.
What entry should be made?
a. Debit Cash; credit rent Expense
b. Debit Ben Smith, Drawing; credit Cash
c. Debit Rent Expense; credit Ben Smith, Drawing
d. Debit Tent Expense; credit Cash
SOLUTIONS
• Multiple Choice Questions
1
2
3
4
5
6
7
8
A
D
A
C
C
D
D
A
9
10
11
12
13
14
15
B
E
E
A
C
E
B