Financial Accounting Quiz

Name: __________________________ Date: _____________

1.|An account is a part of the financial information system and is described by all except which one of the following?|
A)|An account has a debit and credit side.|
B)|An account is a source document.|
C)|An account consists of three parts.|
D)|An account has a title.|

2.|Which statement about an account is true?|
A)|In its simplest form, an account consists of two parts.|
B)|An account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items.|
C)|There are separate account for specific assets and liabilities but only one account for stockholders' equity items.|
D)|The left side of an account is the credit or decrease side.|

3.|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.|

4.|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.|

5.|A company
Identify each transaction by number. You may omit explanations of the transactions.1. Stockholders invest $25,000 in cash in starting a real estate office operating as a corporation.2. Purchased $500 of supplies on credit.3. Purchased equipment for $15,000, paying $3,500 in cash and signed a 30-day, $11,500, note payable.4. Real estate commissions billed to clients amount to $4,000.5. Paid $700 in cash for the current month's rent.6. Paid $250 cash on account for office supplies purchased in transaction 2.7. Received a bill for $800 for advertising for the current month.8. Paid $2,500 cash for office salaries.9. Paid $1,200 cash dividends to stockholders.10. Received a check for $2,000 from a client in payment on account for commissions billed in transaction