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1 Copyright © 2014 Pearson Education, Inc.Horngren's Financial & Managerial Accounting, The Financial Chapters, 4e (Nobles) Chapter 2 Recording Business Transactions
Learning Objective 2-1
1) A chart of accounts is a detailed record of the changes in a particular asset, liability, or stockholders' equity.
Answer: FALSE
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
2) A chart of accounts is a list of all of a company's accounts with their account numbers.
Answer: TRUE
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
3) Liabilities are economic resources that are expected to benefit the business in the future.
Answer: FALSE
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
4) A payment of an expense in advance is called a prepaid expense.
Answer: TRUE
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
5) An accounts receivable requires the business to pay cash in future.
Answer: FALSE
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
6) A payable involves a future receipt of cash.
Answer: FALSE
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
Horngrens Financial and Managerial Accounting The Financial Chapters 4th Edition Nobles Test Bank Visit TestBankDeal.com to get complete for all chapters
2 Copyright © 2014 Pearson Education, Inc.7) Unearned revenue is a liability account.
Answer: TRUE
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
8) The account title used for recording the payment of rent in advance for an office building is ________.
- prepaid rent
- rent payable
- rent revenue
- rent expense
Answer: A
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
9) ________ represents a debt owed for renting a building currently.
- Prepaid rent
- Rent payable
- Rent revenue
- Rent expense
Answer: B
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
10) Nuptial Inc. paid the rent for the current month in cash. Which of the following account titles will be debited?
- Prepaid rent
- Rent payable
- Rent revenue
- Rent expense
Answer: D
Diff: 1
LO: 2-1
AACSB: Application
AICPA Functional: Measurement
11) Which of the following is a liability account?
- Accounts Receivable
- Cash
- Building
- Notes Payable
Answer: D
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
3 Copyright © 2014 Pearson Education, Inc.12) Which of the following is an asset account?
- Wages Payable
- Notes Payable
- Unearned Revenue
- Accounts Receivable
Answer: D
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
13) A customer's promise to pay in the future for services or goods sold is called a(n) ________.
- Accounts Receivable
- Accounts Payable
- Unearned Revenue
- Notes Payable
Answer: A
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
14) Which of the following is a collection of all the accounts, the changes in those accounts, and their balances?
- a source document
- a journal
- a ledger
- a trial balance
Answer: C
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
15) Which of the following is an asset account?
- Salaries Expense
- Accounts Payable
- Service Revenue
- Prepaid Expense
Answer: D
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
4 Copyright © 2014 Pearson Education, Inc.16) Which of the following is a liability account?
- Accounts Payable
- Prepaid Expense
- Salaries Expense
- Service Revenue
Answer: A
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
17) Amounts earned from delivering goods or services to customers are called ________.
- notes receivable
- unearned revenues
- equity
- revenues
Answer: D
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
18) Which of the following details is provided in a typical chart of accounts?
- account balance
- account number
- dates of transactions
- transaction amounts
Answer: B
Diff: 1
LO: 2-1
AACSB: Concept
AICPA Functional: Measurement
19) A liability created when a business collects cash from customers in advance of providing services or delivering goods is called a(n) ________.
- notes receivable
- unearned revenues
- equity
- revenues
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