Quiz 5

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School

Monarch Institute *

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321

Subject

Accounting

Date

May 22, 2024

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docx

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Uploaded by IrinaLomas

Question 1 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following flows shows the correct order of accounting transactions through the accounting records? Select one: a. Source documents, Journal, Ledgers, Trial Balance, Financial Reports Correct Correct b. Source documents, Trial Balance, Journal, Ledgers, Financial Reports c. Source documents, Ledgers, Journal, Financial Reports, Trial Balance d. Source documents, Journal, Trial Balance, Financial Reports, Ledgers Question 2 Correct Mark 1.00 out of 1.00 Flag question Question text If a business has the following account balances Cash $1,000, Motor Vehicle $25,000, Plant $3,000, Bank Loan $20,000, Inventories $10,000, Accounts Receivable (Debtors) $5,000 and Accounts Payable (Creditors) $4,000, what is the value of Owner's Equity? Select one: a. $15,000 b. $88,000 c. $20,000 Correct Correct d. $28,000 Question 3 Correct Mark 1.00 out of 1.00 Flag question Question text A business owner commenced a business with cash of $30,000. The owner then purchased inventories on credit for $15,000 plus inventories for cash $5,000. A bank loan of $4,000 was obtained to purchase a new computer $4,000. What is the Owner's Equity after these transactions? Select one: a. $25,000 b. $50,000 c. $30,000 Correct Correct d. $45,000 Question 4 Correct Mark 1.00 out of 1.00 Flag question Question text What is the extended accounting equation? Select one: a. Assets + Revenue = Liabilities + Owner's Equity - Expenses

b. Assets = Liabilities + Owner's Equity + Revenue - Expenses Correct Correct c. Assets + Revenue - Expenses = Liabilities + Owner's Equity d. Assets = Liabilities - Owner's Equity + Revenue - Expenses Question 5 Correct Mark 1.00 out of 1.00 Flag question Question text What is the equation for Net Profit? Select one: a. Profit = Cash Receipts - Cash Payments b. Profit = Assets - Liabilities c. Profit = Revenue + Expenses d. Profit = Revenue - Expenses Correct Correct Question 6 Correct Mark 1.00 out of 1.00 Flag question Question text What is the effect of the payment of wages on the extended accounting equation? Select one: a. Assets decrease; Expense increase Correct Correct b. Assets increase; Liabilities decrease c. Assets decrease; Revenue increases d. Assets increase; Expenses increase Question 7 Correct Mark 1.00 out of 1.00 Flag question Question text If a business provides a service for cash, what is the effect on the extended accounting equation? Select one: a. Increase Assets and decrease Revenue b. Increase Assets and increase Revenue Correct Correct c. Increase Liabilities and increase Revenue d. Increase Assets and increase Liabilities Question 8 Correct Mark 1.00 out of 1.00 Flag question Question text An alternate name for a ledger is: Select one: a. an account Correct

Correct b. a journal c. a statement d. a Trial Balance Question 9 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following describes the principles of double entry accounting? Select one: a. Debits always increase the balance of an account b. Credits are written on the left side of the ledger account c. Debits are written on the right side of the ledger account d. For every debit there must be a corresponding credit Correct Correct Question 10 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following is true about debits? Select one: a. They increase assets and decrease expenses b. They decrease both assets and expenses c. They increase assets and decrease liabilities Correct Correct d. They increase both assets and liabilities Question 11 Correct Mark 1.00 out of 1.00 Flag question Question text A revenue account: Select one: a. is decreased by credits b. is increased by credits Correct Correct c. is increased by debits d. has a normal balance of a debit Question 12 Correct Mark 1.00 out of 1.00 Flag question Question text The accounting term "posting" refers to: Select one: a. preparing the Financial Statements

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b. preparing a Trial Balance c. mailing the accounting records to the accountant d. transferring information from the journals to the ledger accounts Correct Correct Question 13 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following is the accounting equation? Select one: a. Assets = Liabilities - Owner's Equity b. Assets = Liabilities + Owner's Equity Correct Correct c. Assets + Liabilities = Owner's Equity d. Assets + Owner's Equity = Liabilities Question 14 Correct Mark 1.00 out of 1.00 Flag question Question text Which financial statement is based on the accounting equation? Select one: a. Cash Flow Statement b. Income Statement c. Balance Sheet Correct Correct d. Bank Statement Question 15 Correct Mark 1.00 out of 1.00 Flag question Question text At the commencement of a business, the owner contributes $20,000 cash and a computer worth $2,000. Which of the following is the accounting equation after this transaction has occurred? Select one: a. Assets $22,000 = Liabilities $0 - Owner's Equity $22,000 b. Assets $20,000 = Liabilities $2,000 + Owner's Equity $18,000 c. Assets $22,000 = Liabilities $0 + Owner's Equity $22,000 Correct Correct d. Assets $20,000 + Liabilities $2,000 = Owner's Equity $22,000 Question 16 Correct Mark 1.00 out of 1.00 Flag question Question text A business borrows $50,000 from the bank. How does this affect the accounting equation? Select one:

a. Liabilities (Bank Loan) increases $50,000; Owner's equity (Capital) decreases $50,000 b. Assets (Bank) decreases $50,000; Liabilities (Bank Loan) increases $50,000 c. it does not affect the accounting equation d. Assets (Bank) increases $50,000; Liabilities (Bank Loan) increases $50,000 Correct Correct Question 17 Correct Mark 1.00 out of 1.00 Flag question Question text A business purchases plant and equipment on credit. What is the effect on the accounting equation? Select one: a. Expenses increase; Assets increase b. Expenses increase; Liabilities increase c. Assets increase; Liabilities increase Correct Correct d. Assets increase; Owner's equity increases Question 18 Correct Mark 1.00 out of 1.00 Flag question Question text When the owner contributes more money to the business what is the effect on the accounting equation? Select one: a. Assets decrease, Owner's Equity increases b. Assets increase, Owner' Equity decreases c. Assets increase, Owner's Equity increases Correct Correct d. Assets increase, Revenue increases Question 19 Correct Mark 1.00 out of 1.00 Flag question Question text The full (extended) accounting equation is: Select one: a. A+E-L = OE-R b. A+E = L+OE+R Correct c. A-E = L+OE+R d. A = L+OE Question 20 Correct Mark 1.00 out of 1.00 Flag question Question text Thinking about the accounting equation and without considering other changes, the effect on assets arising from an increase in liabilities will have the following effect:

Select one: a. It will have no effect on any other account categories b. It will increase assets Correct c. It will decrease assets d. It will increase owner’s equity Question 21 Correct Mark 1.00 out of 1.00 Flag question Question text For a service revenue cash sale of $2,000 + $200 GST, the journal entry would be: Select one: a. DR Cash at Bank $2200 CR Sales Revenue $2000 CR GST Collected $200 Correct b. None of the items c. DR Accounts Receivable $2200 CR Sales revenue $2000 CR GST Collected $200 d. DR Sales Revenue $2000 DR GST Collected $200 CR Cash at Bank $2200 Question 22 Correct Mark 1.00 out of 1.00 Flag question Question text Posting to the General Ledger occurs: Select one: a. Never because the accounts are automatically updated b. Once the final accounts have been closed c. After the journal entries have been prepared Correct d. Before the journal entries have been prepared Question 23 Correct Mark 1.00 out of 1.00 Flag question Question text The golden rule of double-entry bookkeeping is: Select one: a. A+L = OE b. OE c. The total value of the debits for the transactions must equal the total value of the credits for the transactions Correct d. There must only be one debit and one credit transaction in a journal Question 24 Correct Mark 1.00 out of 1.00 Flag question Question text After entering any transaction into the accounting system, the accounting equation will hold true in all circumstances (assuming the transaction is entered correctly). Select one: True Correct False

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