Question : 71.Ben Dryden, president of Jet Glass, Inc, noticed a $8,000 : 1237582

 

 

71.Ben Dryden, president of Jet Glass, Inc, noticed a $8,000 debit to Accounts Payable in the company’s general ledger. This debit could correspond to:   

A.A $8,000 sale to a customer.

 

B.A purchase of equipment costing $8,000 on credit.

 

C.A payment of $8,000 to a supplier to settle a balance due.

 

D.The failure to pay this month’s $8,000 utility bill on time.

 

 

 

 

72.Indirect Oil Co. reports these account balances at December 31, 2014  On January 2, 2015, Indirect Oil collected $25,000 of its accounts receivable and paid $20,000 of its accounts payable. On January 3, 2015, total liabilities are:   

A.$185,000.

 

B.$165,000.

 

C.$150,000.

 

D.$70,000.

$35,000 + $130,000 = $165,000

 

 

 

Wilson Trucking, Inc. reports these account balances at January 1, 2015 (shown in alphabetical order):  On January 5, Wilson Trucking collected $175,000 of its accounts receivable, paid $150,000 on its accounts payable, and paid $11,000 on its note payable.

 

73.Refer to the information above. On January 6, 2015, total liabilities are:   

A.$901,000.

 

B.$579,000.

 

C.$1,399,000.

 

D.$1,721,000.

$70,000 + $509,000 = $579,000

 

 

 

74.Refer to the information above. On January 6, 2015, total assets are:   

A.$1,350,000.

 

B.$1,399,000.

 

C.$1,560,000.

 

D.$1,574,000.

($200,000 – $175,000 = $25,000) + $480,000 + ($160,000 + 175,000 – $150,000 – $11,000 = $174,000) + $320,000 + $400,000 = $1,399,000

 

 

 

75.Which of the following accounts normally has a debit balance?   

A.Accounts payable.

 

B.Retained earnings.

 

C.Accounts receivable.

 

D.Service revenue.

 

 

 

 

76.The rules of debit and credit may be summarized as follows:   

A.Asset accounts are increased by debits, whereas, liabilities and owners’ equity are increased by credits.

 

B.The balance of a ledger account is increased by debit entries and is decreased by credit entries.

 

C.Accounts on the left side of the balance sheet are increased by credits, whereas accounts on the right side of the balance sheet are increased by debits.

 

D.The balance of a ledger account is increased by credit entries and is decreased by debit entries.

 

 

 

 

77.The essential point of a double-entry system of accounting is that every transaction:   

A.Affects accounts on both sides of the balance sheet.

 

B.Is recorded in both the journal and the ledger.

 

C.Increases one ledger account and decreases another.

 

D.Affects two or more ledger accounts and is recorded by an equal dollar amount of debits and credits.

 

 

 

 

78.Double-entry accounting is characterized by which of the following?   

A.Every transaction affects both an asset account and either a liability account or an owners’ equity account.

 

B.The number of general ledger accounts with debit balances is equal to the number with credit balances.

 

C.The total dollar amount of debit entries posted to the general ledger is equal to the dollar amount of the credit entries.

 

D.The number of debit entries posted to the general ledger equals the number of credit entries.

 

 

 

 

79.All of the following statements are true of double-entry accounting except:   

A.There is a need for both debit and credit entries for each and every transaction.

 

B.Double-entry accounting can only be used with computer-based accounting systems.

 

C.The total dollar amount of debit entries posted to the general ledger is equal to the dollar amount of the credit entries.

 

D.Double-entry accounting allows us to measure net income at the same time we record the effect of transactions on the balance sheet accounts.

 

 

 

 

80.The process of originally recording a business transaction in the accounting records is termed:   

A.Journalizing.

 

B.Footing.

 

C.Posting.

 

D.Balancing.