The left side of an account is 

a. blank. b. a description of the account. c. the debit side. d. the balance of the account.

ANSWER : c

Which one of the following is not a part of an account (T account)? 

a. Credit side b. Trial balance c. Debit 

side d. Title

ANSWER : b

The right side of an account

 a. is the correct side. b. reflects all transactions for the accounting period. c. 

shows all the balances of the accounts in the system. d. is the credit side.

ANSWER : d

An account consists of 

a. a title, a debit balance, and a credit balance. b. a title, a left side, and a debit 

balance. c. a title, a debit side, and a credit side. d. a title, a right side, and a debit balance

ANSWER : c

A debit to an asset account indicates

 a(n) a. error. b. credit was made to a liability account. c. decrease in 

the asset. d. increase in the asset.

ANSWER : D

Debits a. increase both assets and liabilities. b. decrease both assets and liabilities. c. increase assets and 

decrease liabilities. d. decrease assets and increase liabilities

ANSWER : c

The normal balance of any account is the a. left side. b. right side. c. side which increases that account. d. 

side which decreases that account.

ANSWER : c

The double-entry system requires that each transaction must be recorded a. in at least two different 

accounts. b. in two sets of books. c. in a journal and in a ledger. d. first as a revenue and then as an 

expense.

ANSWER : A

A revenue account a. is increased by debits. b. is decreased by credits. c. has a normal balance of a debit. 

d. is increased by credits.

ANSWER : d

Which accounts normally have debit balances?

 a. Assets, expenses, and revenues b. Assets, expense, and 

retained earnings c. Assets, liabilities, and dividends d. Assets, expenses, and dividends

ANSWER : D

Which accounts normally have credit balances? 

a. Revenues, liabilities, and dividends b. Revenues, 

liabilities, and assets c. Revenues, liabilities, and retained earnings d. Revenues, liabilities, and expenses

ANSWER : c

The best interpretation of the word “credit” is the a. offset side of an account. b. increase side of an 

account. c. right side of an account. d. decrease side of an account.

ANSWER : c

In recording an accounting transaction in a double-entry system a. the number of debit accounts must 

equal the number of credit accounts. b. there must always be entries made on both sides of the 

accounting equation. c. the total dollar amount of the debits must equal the total dollar amount of the 

credits. d. there must only be two accounts affected by any transaction.

ANSWER : c

A debit is not the normal balance for which account listed below?

 a. Dividends b. Cash c. Accounts 

Receivable d. Service Revenue

ANSWER : d

An accountant has debited an asset account for $1,000 and credited a liability account for $500. What 

can be done to complete the recording of the transaction?

 a. Nothing further must be done. b. Debit a 

stockholders’ equity account for $500. c. Debit another asset account for $500. d. Credit a different asset 

account for $500.

ANSWER : c

An accountant has debited an asset account for $800 and credited a liability account for $700. Which of 

the following would be an incorrect way to complete the recording of the transaction?

 a. Credit an asset 

account for $100. b. Credit another liability account for $100. c. Credit a stockholders’ equity account for 

$100. d. Debit a stockholders’ equity account for $100.

ANSWER : d

An accountant has debited an asset account for $900 and credited a liability account for $600. What can  be done to complete the recording of the transaction? 

a Debit a stockholders’ equity account for $300. 

b. Debit another asset account for $300. c. Credit a different asset account for $300. d. Nothing further 

must be done.

ANSWER : c

Which of the following accounts is increased with a debit?

 a. Dividends b. Service Revenue c. Interest 

Payable

ANSWER : a

Which of the following accounts is increased with a credit?

 a. Supplies Expense b. Supplies c. Sales 

Revenue d. Dividends

ANSWER : c

An account will have a credit balance if the

 a. credits exceed the debits. b. first transaction entered was a 

credit. c. debits exceed the credits. d. last transaction entered was a credit.

ANSWER : a

For the basic accounting equation to stay in balance, each transaction recorded must 

a. affect two or less 

accounts. b. affect two or more accounts. c. always affect exactly two accounts. d. affect the same 

number of asset and liability accounts.

ANSWER : b

Which of the following statements is true? 

a. Debits increase assets and increase liabilities. b. Credits 

decrease assets and decrease liabilities. c. Credits decrease assets and increase liabilities. d. Debits 

increase liabilities and decrease assets.

ANSWER : c

Assets normally show a. credit balances. b. debit balances. c. debit and credit balances. d. debit or credit balances.

ANSWER : b

Which account below is not a subdivision of stockholders’ equity? 

a. Dividends b. Revenues c. Expenses 

d. Liabilities

ANSWER : d

A revenue account a. is increased with

 a debit. b. is decreased with a credit. c. is increased with a credit. 

d. has a normal balance of a debit.

ANSWER : c

In the first month of operations, the total of the debit entries to the Cash account amounted to $7,000 

and the total of the credit entries to the Cash account amounted to $4,000. The Cash account has a a. 

$4,000 credit balance. b. $7,000 debit balance. c. $3,000 debit balance. d. $3,000 credit balance.

ANSWER : c

In the first month of operations, the total of the debit entries to the Cash account amounted to $2,000 

and the total of the credit entries to the Cash account amounted to $1,500. The Cash account has a a. 

$1,500 credit balance. b. $500 debit balance. c. $2,000 debit balance. d. $500 credit balance.

ANSWER : b

In the first month of operations, the total of the debit entries to the Cash account amounted to $3,000 

and the total of the credit entries to the Cash account amounted to $1,800. The Cash account has a a. 

$1,800 credit balance. b. $3,000 debit balance. c. $1,200 debit balance. d. $1,800 credit balance.

ANSWER : c

On June 1, 2017, England Inc. reported a cash balance of $42,000. During June, England made deposits 

of $16,000 and made disbursements totaling $48,000. What is the cash balance at the end of June? 

a. $10,000 credit balance b. $58,000 debit balance c. $10,000 debit balance d. $6,000 credit balance

ANSWER : c

During February 2017, its first month of operations, the owner of Schwenn Enterprises invested cash of $100,000. Schwenn had cash sales of $20,000 and paid expenses of $35,000. Assuming no other 

transactions impacted the cash account, what is the balance in Cash at February 28?

 a. $15,000 credit b. $85,000 debit c. $120,000 debit d. $65,000 credit

ANSWER : b

At September 1, 2017, Kern Enterprises reported a cash balance of $140,000. During the month, Kern 

collected cash of $60,000 and made disbursements of $100,000. At September 30, 2017, the cash 

balance is

 a. $40,000 credit. b. $100,000 credit. c. $200,000 debit. d. $100,000 debit.

ANSWER : d

Which of the following accounts has a normal debit balance?

 a. Accounts Payable c. Retained Earnings b. Prepaid Rent d. Common Stock

ANSWER : b.

The general is also known as the _________

ANSWER : Book of original entry

Which of the following accounts has a normal debit balance?

 A) common stock B) account payable C) 

account receivable D) retained earnings E) unearned service revenue

ANSWER : C) account receivable

Every accounting transaction involves an increase in at least one account and a decrease in at least one 

other account 

True or false

ANSWER : FALSE

A company received cash in exchange for issuing stock. This transaction:

ANSWER : Increased assets and increased equity

The process of transferring information from the general Journal to the general ledger is known as?

ANSWER : Posting

Assets, liabilities, and expense accounts are all increase by debits True or false

ANSWER : FALSE

The entry to record the purchase of $500 of supplies for cash would be:

ANSWER : Supplies for debit $500 Cash for credit $500

A chart of accounts is:

ANSWER : A list of all the accounts of the organization and their related accounts numbers

The normal balance for the building account is a _________ because it is a __________ account.

ANSWER : Debit, asset

When a liability is paid, total assets and total liabilities decreased. True or false

ANSWER : TRUE

Service revenue has normal debit balance. True or false

ANSWER : FALSE

If accounts payable has debit postings of $17,000, credit posting of $14,000, and a normal ending 

balance of $6,000, what was. It’s beginning balance?

ANSWER : $9,000 credit

When a business records revenues before it has been earned it has violated the measurement issue of?

ANSWER : recognition

All of the following actions can help a business manage its cash flows except

A) Arrange for a line of credit at the bank, should the funds be needed

B) Pay for all expenditures immediately

C) Convince its creditors to allow payments over a period of time

D) Be efficient and making collections from its customers

ANSWER : B) Pay for all expenditures immediately

Which of the following accounts will eventually be followed with an inflow of cash?

A) Prepaid insurance

B) Unearned revenue

C) Dividends

D) Accounts receivable

E) Supplies expense

ANSWER : D) Accounts receivable