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CBAD 201 Final Exam NEWEST VERSION WITH
COMPLETE QUESTIONS AND CORRECT DETAILED
SOLUTIONS LATEST UPDATED VERSION JUST RELEASED
Question: A company performed services for a customer for cash. This transaction increased
assets and:
a. increased revenues
b. increased expenses
c. increased liabilities
d. decreased stockholders' equity - CORRECT ANSWER✔✔a. increased revenues
Question: The debt created by a business when it makes a purchase of inventory on account is
a:
a. account receivable
b. note payable
c. revenue
d. account payable - CORRECT ANSWER✔✔d. account payable
Question: A company had credit sales of $30,000 and cash sales of $23,000 during the month
of May. Also during May, the company paid wages of $21,000 and utilities of $11,000. It also
received payments from customers on account totaling $4200. What was the company's net
income for the month?
a. $21,000
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b. $53,000
c. $85,000
d. $23,000 - CORRECT ANSWER✔✔a. $21,000
Question: A company performed tax services for a client on account. The amount billed to the
client was $6000. How does this transaction affect the accounting equation?
a. Add $6000 to Cash and add $6000 to Retained Earnings.
b. Add $6000 to Accounts Receivable and add $6000 to Retained Earnings.
c. Add $6000 to Cash and add $6000 to Service Revenue.
d. Add $6000 to Accounts Payable and add $6000 to Service Revenue. - CORRECT ANSWER✔✔b.
Add $6000 to Accounts Receivable and add $6000 to Retained Earnings.
Question: Which accounts are increased by debits?
a. Cash and Accounts Payable
b. Accounts Payable and Service Revenue
c. Salaries Expense and Common Stock
d. Accounts Receivable and Utilities Expense - CORRECT ANSWER✔✔d. Accounts Receivable and
Utilities Expense
Question: If a journal entry includes a debit to Accounts Payable and a credit to Cash:
a. Cash is increased.
b. Accounts Payable is increased.
c. Cash will have a credit balance.
d. Accounts Payable is decreased. - CORRECT ANSWER✔✔d. Accounts Payable is decreased.
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Question: A journal entry that debits Cash and credits Accounts Receivable indicates that:
a. revenue increased
b. payment was received on account
c. payment was made on account
d. revenue decreased - CORRECT ANSWER✔✔b. payment was received on account
Question: On May 10, a business collected $2200 on account. What journal entry is needed on
that date?
a. Debit Cash for $2200 and credit Accounts Receivable for $2200
b. Debit Accounts Receivable for $2200 and credit Revenue for $2200
c. Debit Cash for $2200 and credit Revenue for $2200
d. Debit Accounts Payable for $2200 and credit Revenue for $2200 - CORRECT ANSWER✔✔a.
Debit Cash for $2200 and credit Accounts Receivable for $2200
Question: On May 1, a business provided legal services to a client and billed the client $4000.
The client promised to pay the business in one month. Which journal entry should the business
record on May 1?
a. Debit Cash for $4000 and credit Retained Earnings for $4000
b. Debit Cash for $4000 and credit Service Revenue for $4000
c. Debit Accounts Receivable for $4000 and credit Service Revenue for $4000
d. Debit Accounts Payable for $4000 and credit Service Revenue for $4000 - CORRECT
ANSWER✔✔c. Debit Accounts Receivable for $4000 and credit Service Revenue for $4000
Question: The dollar amounts listed on the trial balance are obtained from the:
a. this period's balance sheet and income statement
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b. beginning balances in the ledger accounts
c. last period's balance sheet and income statement
d. ending balances in the ledger accounts - CORRECT ANSWER✔✔d. ending balances in the
ledger accounts
Question: The normal balance of an expense account is a ________ because expenses
decrease ________.
a. debit; assets
b. debit; expenses
c. debit; retained earnings
d. credit; retained earnings - CORRECT ANSWER✔✔c. debit; retained earnings
Question: An expense occurred in 2018, and it is not paid until 2019. Using cash-basis
accounting, the expense should appear on:
a. the 2019 income statement
b. the 2018 income statement
c. both the 2018 and 2019 income statements
d. whichever income statement the business prefers - CORRECT ANSWER✔✔a. the 2019 income
statement
Question: Under accrual accounting, the event that triggers revenue recognition for the sale of
goods is the:
a. date the customer pays for the goods
b. date a contract is signed
c. delivery of goods to customer
d. date the customer orders the goods - CORRECT ANSWER✔✔c. delivery of goods to customer
CBAD 201 Final Exam NEWEST VERSION WITH
COMPLETE QUESTIONS AND CORRECT DETAILED
SOLUTIONS LATEST UPDATED VERSION JUST RELEASED
Question: A company performed services for a customer for cash. This transaction increased
assets and:
a. increased revenues
b. increased expenses
c. increased liabilities
d. decreased stockholders' equity - CORRECT ANSWER✔✔a. increased revenues
Question: The debt created by a business when it makes a purchase of inventory on account is
a:
a. account receivable
b. note payable
c. revenue
d. account payable - CORRECT ANSWER✔✔d. account payable
Question: A company had credit sales of $30,000 and cash sales of $23,000 during the month
of May. Also during May, the company paid wages of $21,000 and utilities of $11,000. It also
received payments from customers on account totaling $4200. What was the company's net
income for the month?
a. $21,000
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b. $53,000
c. $85,000
d. $23,000 - CORRECT ANSWER✔✔a. $21,000
Question: A company performed tax services for a client on account. The amount billed to the
client was $6000. How does this transaction affect the accounting equation?
a. Add $6000 to Cash and add $6000 to Retained Earnings.
b. Add $6000 to Accounts Receivable and add $6000 to Retained Earnings.
c. Add $6000 to Cash and add $6000 to Service Revenue.
d. Add $6000 to Accounts Payable and add $6000 to Service Revenue. - CORRECT ANSWER✔✔b.
Add $6000 to Accounts Receivable and add $6000 to Retained Earnings.
Question: Which accounts are increased by debits?
a. Cash and Accounts Payable
b. Accounts Payable and Service Revenue
c. Salaries Expense and Common Stock
d. Accounts Receivable and Utilities Expense - CORRECT ANSWER✔✔d. Accounts Receivable and
Utilities Expense
Question: If a journal entry includes a debit to Accounts Payable and a credit to Cash:
a. Cash is increased.
b. Accounts Payable is increased.
c. Cash will have a credit balance.
d. Accounts Payable is decreased. - CORRECT ANSWER✔✔d. Accounts Payable is decreased.
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Question: A journal entry that debits Cash and credits Accounts Receivable indicates that:
a. revenue increased
b. payment was received on account
c. payment was made on account
d. revenue decreased - CORRECT ANSWER✔✔b. payment was received on account
Question: On May 10, a business collected $2200 on account. What journal entry is needed on
that date?
a. Debit Cash for $2200 and credit Accounts Receivable for $2200
b. Debit Accounts Receivable for $2200 and credit Revenue for $2200
c. Debit Cash for $2200 and credit Revenue for $2200
d. Debit Accounts Payable for $2200 and credit Revenue for $2200 - CORRECT ANSWER✔✔a.
Debit Cash for $2200 and credit Accounts Receivable for $2200
Question: On May 1, a business provided legal services to a client and billed the client $4000.
The client promised to pay the business in one month. Which journal entry should the business
record on May 1?
a. Debit Cash for $4000 and credit Retained Earnings for $4000
b. Debit Cash for $4000 and credit Service Revenue for $4000
c. Debit Accounts Receivable for $4000 and credit Service Revenue for $4000
d. Debit Accounts Payable for $4000 and credit Service Revenue for $4000 - CORRECT
ANSWER✔✔c. Debit Accounts Receivable for $4000 and credit Service Revenue for $4000
Question: The dollar amounts listed on the trial balance are obtained from the:
a. this period's balance sheet and income statement
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b. beginning balances in the ledger accounts
c. last period's balance sheet and income statement
d. ending balances in the ledger accounts - CORRECT ANSWER✔✔d. ending balances in the
ledger accounts
Question: The normal balance of an expense account is a ________ because expenses
decrease ________.
a. debit; assets
b. debit; expenses
c. debit; retained earnings
d. credit; retained earnings - CORRECT ANSWER✔✔c. debit; retained earnings
Question: An expense occurred in 2018, and it is not paid until 2019. Using cash-basis
accounting, the expense should appear on:
a. the 2019 income statement
b. the 2018 income statement
c. both the 2018 and 2019 income statements
d. whichever income statement the business prefers - CORRECT ANSWER✔✔a. the 2019 income
statement
Question: Under accrual accounting, the event that triggers revenue recognition for the sale of
goods is the:
a. date the customer pays for the goods
b. date a contract is signed
c. delivery of goods to customer
d. date the customer orders the goods - CORRECT ANSWER✔✔c. delivery of goods to customer
