PRINCIPLES OF ACCOUNTING I
FUN QUIZ TWO: CHAPTER TWO
I. Multiple Choice. Select the best lettered answer for the number question or best lettered completion for the numbered partial statement. Record the letter next to the number.
1. __D___ 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.
2. ___A__ 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.
3. __A___ Which of the following statements is not true?
a. Expenses increase owner's equity.
b. Expenses have normal debit balances.
c. Expenses decrease owner's equity.
d. Expenses are a negative factor in the computation of net income.
4. __C___ On June 1, 2014, Portugal Inc. reported a cash balance of $12,000. During June, Portugal made deposits of $5,000 and made disbursements totalling $14,000. What is the cash balance at the end of June?
a. $3,000 debit balance
b. $17,000 debit balance
c. $3,000 credit balance
d. $2,000 credit balance
5. __A___ At October 1, 2014, Padilla Industries had an accounts payable balance of $40,000. During the month, the company made purchases on account of $33,000 and made payments on account of $48,000. At October 31, 2014, the accounts payable balance is
ACCT220 Fun Quiz Two: Chapter Two Continued: Page 2 of 3
6. __C___ The final step in the recording process is to transfer the journal information to the
a. trial balance.
b. financial statements.
d. file cabinets.
7. __C___ Camper Van Company purchased equipment for $2,600 cash. As a result of this event, a. owner’s equity decreased by $2,600.
b. total assets increased by $2,600.
c. total assets remained unchanged.