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1 Copyright © 2016 Pearson Education, Inc.College Accounting, 13e (Slater)
Chapter 2 Debits and Credits: Analyzing and Recording Business Transactions
2.1 Learning Objective 2-1
1) Accounts Payable had a normal starting balance of $500. There were debit postings of $200 and credit
postings of $100 during the month. The ending balance is:
- $400 credit.
- $800 debit.
- $400 debit.
- $800 credit.
Answer: A
Diff: 2
LO: 2-1
AACSB: Analytical Thinking
Learning Outcome: Analyze and record transactions and their effects on the financial statements
2) The beginning balance in the Computers account was $3,000. The company purchased an additional
$1000 worth of computers. The ending balance in the account is:
- debit of $2,000.
- credit of $3,000.
- debit of $4,000.
- credit of $2,000.
Answer: C
Diff: 1
LO: 2-1
AACSB: Analytical Thinking
Learning Outcome: Analyze and record transactions and their effects on the financial statements
3) An accounting device used to record increases and decreases in individual assets, liabilities, capital,
revenue, expenses, and withdrawals is a(n):
- chart of accounts.
- account.
- trial balance.
- footing.
Answer: B
Diff: 2
LO: 2-1
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
College Accounting A Practical Approach 13th Edition Jeffrey Slater Test Bank Visit TestBankDeal.com to get complete for all chapters
2 Copyright © 2016 Pearson Education, Inc.4) A formal account that has columns for date, explanation, posting reference, debit, and credit is called
the:
- T account.
- standard account form.
- ledger.
- chart of accounts.
Answer: B
Diff: 2
LO: 2-1
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
5) A ledger:
- includes all company accounts and their balances.
- can replace the financial statements.
- is the same as a chart of accounts.
- is known as a worksheet.
Answer: A
Diff: 1
LO: 2-1
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
6) The left side of any account is the:
- debit side.
- credit side.
- ending balance.
- beginning balance.
Answer: A
Diff: 1
LO: 2-1
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
7) The right side of any account is the:
- debit side.
- credit side.
- ending balance.
- beginning balance.
Answer: B
Diff: 1
LO: 2-1
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
3 Copyright © 2016 Pearson Education, Inc.
8) An account is said to have a debit balance if:
- the footing of the debits exceeds the footing of the credits.
- there are more entries on the debit side than on the credit side.
- its normal balance is debit without regard to the amounts or number of entries on the debit side.
- the last entry of the accounting period was posted on the debit side.
Answer: A
Diff: 2
LO: 2-1
AACSB: Analytical Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
9) The ledger is:
- a group of accounts that records data from business transactions.
- a tool used to insure that all accounts have normal balances.
- a chronological record of the day's transactions.
- a tool used to ensure that debits equal credits.
Answer: A
Diff: 1
LO: 2-1
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
10) The credit side is always the left side of the account.
Answer: FALSE
Diff: 1
LO: 2-1
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
11) A T account is used for demonstration purposes.
Answer: TRUE
Diff: 2
LO: 2-1
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
12) Explain the difference between expenses and withdrawals.Answer: A withdrawal is used for recording the owner's withdrawal of company assets for personal use, and not related to the business. Expenses are costs the company incurs in carrying on operations in its effort to create revenue.
Diff: 2
LO: 2-1
AACSB: Written and Oral Communication
Learning Outcome: Define accounting terms, accounting concepts and principles
4 Copyright © 2016 Pearson Education, Inc.
2.2 Learning Objective 2-2
1) A compound entry is:
- a transaction involving more than one debit and/or credit.
- used to prepare the trial balance.
- included on the balance sheet.
- found on the income statement.
Answer: A
Diff: 1
LO: 2-2
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
2) The side that increases the account balance, by the rules of debit and credit, is said to be the:
- debit side.
- credit side.
- normal balance.
- None of these answers is correct.
Answer: C
Diff: 1
LO: 2-2
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
3) The Accounts Payable account is:
- a capital, and it has a normal debit balance.
- an expense, and it has a normal credit balance.
- a liability, and it has a normal debit balance.
- a liability, and it has a normal credit balance.
Answer: D
Diff: 1
LO: 2-2
AACSB: Reflective Thinking
Learning Outcome: Define accounting terms, accounting concepts and principles
4) An account that would be increased by a credit is:
- Cash.
- Prepaid Expense.
- Utilities Expense.
- Accounts Payable.
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