ACG EXAMS SCRIPT 2025/2026 QUESTIONS AND
SOLUTION RATED A+
=
✔✔A company received cash in exchange for issuing stock. This transaction: -
✔✔increased assets and increased equity
✔✔A company purchased office supplies on account. This transaction: - ✔✔increased
assets and increased liabilities
✔✔A company performed services for a customer on account. This transaction: -
✔✔increased assets and increased revenues
✔✔A company paid cash for employee wages. This transaction: - ✔✔decrease cash
and increase expenses
✔✔A company paid cash for an amount owed to a creditor. This transaction: -
✔✔decreased cash and decreased liabilities
✔✔The owner of a business paid cash from his personal checking account to purchase
an automobile for his personal use. This transaction: - ✔✔it is not a transaction
recognized by the business
✔✔Which type of account is increased when a company records a debt? - ✔✔liabilities
✔✔The payment of an amount owed to a creditor would: - ✔✔decrease liabilities
✔✔The payment of salaries to employees would: - ✔✔decrease stockholders' equity
✔✔When a company performs a service and immediately collects the cash from the
customer, which of the following would occur? - ✔✔net income would increase
✔✔Purchasing supplies and paying cash for them would: - ✔✔have no affect on total
assets
✔✔paying a utility bill would - ✔✔increase expenses
✔✔borrowing money from the bank by signing a note payable would: - ✔✔have no
affect on stockholders' equity
✔✔receiving a payment from a customer on account would - ✔✔have no affect on
stockholders' equity
, ✔✔The purchase of land for cash would: - ✔✔not affect the total of debits or credits on
the trial balance
✔✔An owner investment of a building, valued at $100,000 with an $80,000 outstanding
mortgage, into the business would: - ✔✔increase stockholders' equity by $20,000
✔✔performing services on account would - ✔✔increase net income and stockholders'
equity
✔✔Which of the following statements regarding accounts is false?
a. An asset is increased by a debit and decreased by a credit.
b. Dividends are increased by credits and decreased by debits.
c. A liability is decreased by a debit and increased by a credit.
d. Revenue is increased by a credit and an expense is increased by a debit. -
✔✔dividends are increased by and decreased by debits
✔✔Which accounts are increased by debits? - ✔✔assets and expenses
✔✔The debit side of the account always indicates - ✔✔amount received in the
transaction
✔✔A business purchases a truck by signing a note payable to the seller. Such a
transaction would include a: - ✔✔credit to note payable
✔✔The accounting transaction to record payment of an electric bill would include a: -
✔✔debit to utilities expense
✔✔The entry to record $750 received from a customer for services previously rendered
to that customer would be: - ✔✔debit cash $750
credit accounts receivable $750
✔✔The entry to record the purchase of supplies on account would include a debit to: -
✔✔supplies
✔✔The accounting transaction to record the payment of salaries to employees would
include a: - ✔✔debit to salaries expense
✔✔The journal entry to record performing a service on account would include a debit to:
- ✔✔accounts receivable
SOLUTION RATED A+
=
✔✔A company received cash in exchange for issuing stock. This transaction: -
✔✔increased assets and increased equity
✔✔A company purchased office supplies on account. This transaction: - ✔✔increased
assets and increased liabilities
✔✔A company performed services for a customer on account. This transaction: -
✔✔increased assets and increased revenues
✔✔A company paid cash for employee wages. This transaction: - ✔✔decrease cash
and increase expenses
✔✔A company paid cash for an amount owed to a creditor. This transaction: -
✔✔decreased cash and decreased liabilities
✔✔The owner of a business paid cash from his personal checking account to purchase
an automobile for his personal use. This transaction: - ✔✔it is not a transaction
recognized by the business
✔✔Which type of account is increased when a company records a debt? - ✔✔liabilities
✔✔The payment of an amount owed to a creditor would: - ✔✔decrease liabilities
✔✔The payment of salaries to employees would: - ✔✔decrease stockholders' equity
✔✔When a company performs a service and immediately collects the cash from the
customer, which of the following would occur? - ✔✔net income would increase
✔✔Purchasing supplies and paying cash for them would: - ✔✔have no affect on total
assets
✔✔paying a utility bill would - ✔✔increase expenses
✔✔borrowing money from the bank by signing a note payable would: - ✔✔have no
affect on stockholders' equity
✔✔receiving a payment from a customer on account would - ✔✔have no affect on
stockholders' equity
, ✔✔The purchase of land for cash would: - ✔✔not affect the total of debits or credits on
the trial balance
✔✔An owner investment of a building, valued at $100,000 with an $80,000 outstanding
mortgage, into the business would: - ✔✔increase stockholders' equity by $20,000
✔✔performing services on account would - ✔✔increase net income and stockholders'
equity
✔✔Which of the following statements regarding accounts is false?
a. An asset is increased by a debit and decreased by a credit.
b. Dividends are increased by credits and decreased by debits.
c. A liability is decreased by a debit and increased by a credit.
d. Revenue is increased by a credit and an expense is increased by a debit. -
✔✔dividends are increased by and decreased by debits
✔✔Which accounts are increased by debits? - ✔✔assets and expenses
✔✔The debit side of the account always indicates - ✔✔amount received in the
transaction
✔✔A business purchases a truck by signing a note payable to the seller. Such a
transaction would include a: - ✔✔credit to note payable
✔✔The accounting transaction to record payment of an electric bill would include a: -
✔✔debit to utilities expense
✔✔The entry to record $750 received from a customer for services previously rendered
to that customer would be: - ✔✔debit cash $750
credit accounts receivable $750
✔✔The entry to record the purchase of supplies on account would include a debit to: -
✔✔supplies
✔✔The accounting transaction to record the payment of salaries to employees would
include a: - ✔✔debit to salaries expense
✔✔The journal entry to record performing a service on account would include a debit to:
- ✔✔accounts receivable
