ACCT 2001 Chapter 3
On January 31, Cooper Consulting used $12,000 in cash to pay its employee salaries. When posting the journal
entries related to this transaction, Cooper's accounting staff debits both the Cash account and the Salaries Expense
account for $12,000. Which of the following statements best describes the results of this posting?
A :In Cooper's general ledger, the ending balance for the Cash account will be correct, while the ending balance for
the Salaries Expense account will be too high.
b. In Cooper's general ledger, the ending balance for the Cash account will be too high, while the ending balance for
the Salaries Expense account will be correct.
C :In Cooper's general ledger, the ending balance for the Cash account will be too low, while the ending balance for
the Salaries Expense account will be correct.
D :In Cooper's general ledger, the ending balance for the Cash account will be correct, while the ending balance for
the Salaries Expense account will be too low.
b. In Cooper's general ledger, the ending balance for the Cash account will be too high, while the ending balance for
the Salaries Expense account will be correct.
If the trial balance has total debits equal to total credits, then...
a. no irregularities occurred in the reporting process.
b. no errors occurred in the recording process.
c. all journal entries must have been posted.
d. it is possible the wrong accounts were used in the journal entry.
d. it is possible the wrong accounts were used in the journal entry.
Irregular entries represent...
a. an incorrect title in an entry.
b. transposition of numbers in an entry.
c. transactions that occur infrequently.
d. an unethical misstatement.
d. an unethical misstatement.
Over the course of January, Gruber Products makes cash payments of $450, $940, $280, and $600 and receives
cash payments of $520, $660, $690, and $540. If the Cash account started with a $0 balance, Gruber's Cash account
balance at the end of January would have a
A :debit balance of $210.
B :credit balance of $210.
C :credit balance of $140.
d. debit balance of $140.
d. debit balance of $140.
Suppose that a firm issues a $5,000 note payable in exchange for $5,000 of equipment. What effect would this have
on the Notes Payable account?
A :It would increase the account as a debit.
B :It would decrease the account as a credit.
C :It would decrease the account as a debit.
d. It would increase the account as a credit.
d. It would increase the account as a credit.
, In which of the following cases will a trial balance not balance?
A :when a correct journal entry is posted twice
B :when a $300 payment on accounts payable is debited to Accounts Payable for $30 and credited to Cash for $30
c. when a $50 cash dividend is debited to Dividends for $500 and credited to Cash for $50
D :when a transaction is not posted at all
c. when a $50 cash dividend is debited to Dividends for $500 and credited to Cash for $50
The dividends account ____________ by $6,000 when a company pays dividends of $6,000.
a. increases
b. decreases
a. increases
If a company performed services to customers and received cash, then...
a. Assets will increase
b. Liability will increase
c. Liability will decrease
d. Stockholders' equity will decrease
a. Assets will increase
During 2017, Hart Company buys $5,000 of equipment on account. The impact on the accounting equation is:
a. An increase to assets and decrease to liabilities.
b. An increase to assets and increase to liabilities.
c. A decrease to assets and increase to liabilities
d. An increase to assets and increase to equity.
b. An increase to assets and increase to liabilities.
Which of the following is a true statement?
a. Debits increase assets and revenues
b. Debits decrease assets and revenues
c. Credits decrease assets and increase revenues
d. Credits decrease assets and revenues
c. Credits decrease assets and increase revenues
Which accounts normally have credit balances?
a. Assets, Revenues, Expense
b. Revenues, Dividends, Liabilities
c. Revenues, Stockholders' Equity, Liabitlieis
d. Assets, Common Stock, Retained Earnings
c. Revenues, Stockholders' Equity, Liabitlieis
Which accounts normally have debit balances?
a. Liabilities
b. Common Stock
c. Revenue
d. Expense
d. Expense
Which of the following would be considered an economic event that requires an accounting transaction?
the hiring of a new employee
B :corporate decisions about new product lines
On January 31, Cooper Consulting used $12,000 in cash to pay its employee salaries. When posting the journal
entries related to this transaction, Cooper's accounting staff debits both the Cash account and the Salaries Expense
account for $12,000. Which of the following statements best describes the results of this posting?
A :In Cooper's general ledger, the ending balance for the Cash account will be correct, while the ending balance for
the Salaries Expense account will be too high.
b. In Cooper's general ledger, the ending balance for the Cash account will be too high, while the ending balance for
the Salaries Expense account will be correct.
C :In Cooper's general ledger, the ending balance for the Cash account will be too low, while the ending balance for
the Salaries Expense account will be correct.
D :In Cooper's general ledger, the ending balance for the Cash account will be correct, while the ending balance for
the Salaries Expense account will be too low.
b. In Cooper's general ledger, the ending balance for the Cash account will be too high, while the ending balance for
the Salaries Expense account will be correct.
If the trial balance has total debits equal to total credits, then...
a. no irregularities occurred in the reporting process.
b. no errors occurred in the recording process.
c. all journal entries must have been posted.
d. it is possible the wrong accounts were used in the journal entry.
d. it is possible the wrong accounts were used in the journal entry.
Irregular entries represent...
a. an incorrect title in an entry.
b. transposition of numbers in an entry.
c. transactions that occur infrequently.
d. an unethical misstatement.
d. an unethical misstatement.
Over the course of January, Gruber Products makes cash payments of $450, $940, $280, and $600 and receives
cash payments of $520, $660, $690, and $540. If the Cash account started with a $0 balance, Gruber's Cash account
balance at the end of January would have a
A :debit balance of $210.
B :credit balance of $210.
C :credit balance of $140.
d. debit balance of $140.
d. debit balance of $140.
Suppose that a firm issues a $5,000 note payable in exchange for $5,000 of equipment. What effect would this have
on the Notes Payable account?
A :It would increase the account as a debit.
B :It would decrease the account as a credit.
C :It would decrease the account as a debit.
d. It would increase the account as a credit.
d. It would increase the account as a credit.
, In which of the following cases will a trial balance not balance?
A :when a correct journal entry is posted twice
B :when a $300 payment on accounts payable is debited to Accounts Payable for $30 and credited to Cash for $30
c. when a $50 cash dividend is debited to Dividends for $500 and credited to Cash for $50
D :when a transaction is not posted at all
c. when a $50 cash dividend is debited to Dividends for $500 and credited to Cash for $50
The dividends account ____________ by $6,000 when a company pays dividends of $6,000.
a. increases
b. decreases
a. increases
If a company performed services to customers and received cash, then...
a. Assets will increase
b. Liability will increase
c. Liability will decrease
d. Stockholders' equity will decrease
a. Assets will increase
During 2017, Hart Company buys $5,000 of equipment on account. The impact on the accounting equation is:
a. An increase to assets and decrease to liabilities.
b. An increase to assets and increase to liabilities.
c. A decrease to assets and increase to liabilities
d. An increase to assets and increase to equity.
b. An increase to assets and increase to liabilities.
Which of the following is a true statement?
a. Debits increase assets and revenues
b. Debits decrease assets and revenues
c. Credits decrease assets and increase revenues
d. Credits decrease assets and revenues
c. Credits decrease assets and increase revenues
Which accounts normally have credit balances?
a. Assets, Revenues, Expense
b. Revenues, Dividends, Liabilities
c. Revenues, Stockholders' Equity, Liabitlieis
d. Assets, Common Stock, Retained Earnings
c. Revenues, Stockholders' Equity, Liabitlieis
Which accounts normally have debit balances?
a. Liabilities
b. Common Stock
c. Revenue
d. Expense
d. Expense
Which of the following would be considered an economic event that requires an accounting transaction?
the hiring of a new employee
B :corporate decisions about new product lines
