ACCT 212 Week 2 Quiz

1. (TCO 2) The debt created by a business when it makes a purchase on account is a(n) (Points : 3) revenue. prepaid expense. account receivable. account payable. Question 2. 2. (TCO 2) Which of the following transactions will increase Stockholders' Equity? (Points : 3) The company pays a dividend to its shareholders. The company issues common stock to new shareholders. The president of the company buys a new personal automobile. The company makes a payment on account. Question 3. 3. (TCO 2) A company performs services for a client on account. When the company receives the cash from the customer 1 month later (Points : 3) a revenue account is increased. a liability account is decreased. an asset account is increased. an expense account is decreased. Question 4. 4. (TCO 2) The left side of a T-account is always the (Points : 3) increase side. decrease side. debit side. credit side. Question 5. 5. (TCO 2) An account is increased by a debit and has a debit balance. This account is (Points : 3) an expense account. a liability account. an asset account. both an expense account and an asset account. Question 6. 6. (TCO 2) The process of copying the information from the journal to the ledger is called (Points : 3) posting. summarizing. journalizing. preparing the financial statements. Question 7. 7. (TCO 3) A doctor performed surgery in March and did not receive cash from the patient until July. Under accrual accounting the doctor recognizes revenue (Points : 3) in March. in July. in either March or July. at a time that cannot be determined from the facts. Question 8. 8. (TCO 3) The revenue principle requires that a business record revenue when the business (Points : 3) receives an order from a customer. prepares the invoice for the customer. delivers goods or services to a customer. receives payment from a customer. Question 9. 9. (TCO 3) The balance sheet reports (Points : 3) assets, liabilities and stockholders' equity. the changes in retained earnings. assets, liabilities, revenues and expenses. revenues and expenses. Question 10. 10. (TCO 3) To close the books of a company, you should (Points : 3) debit each revenue account, credit each expense account, and debit the dividends account. credit each revenue account, debit each expense account, and debit the dividends account. debit each revenue account, credit each expense account, and credit the dividends account. debit each revenue account, debit each expense account, and credit the dividends account.