New version page

UT Knoxville ACCT 301 - Practice Exam 1

Documents in this Course
Load more

This preview shows page 1-2-3 out of 10 pages.

View Full Document
View Full Document

End of preview. Want to read all 10 pages?

Upload your study docs or become a GradeBuddy member to access this document.

View Full Document
Unformatted text preview:

1. A revenue account is credited this period when a. services are provided to a customer this period b. services are provided to the company this period c. services are paid for this period and provided next period d. income is earned last periodA. A revenue account is credited when it is increased. Revenues are recorded with an increase when the revenue is earned this period; a good or service has been provided this period. (b.) is an expense. 2. An expense account is debited this period when a. services are provided to a customer this period b. services are provided to the company this period c. services will be paid for this period and provided next period d. services will be provided to the company next periodB. Expense accounts are debited when they increase. A service provided to the company this period is an increase in to the expense this period. 3. What is recorded when wages are paid to employees who worked this period? a. a debit to an asset and a credit to a liability b. a credit to a revenue and a debit to an asset c. a debit to an expense and a credit to an asset d. a debit to a liability and a credit to a revenueC. Wages paid to employees who worked this period is an increase to an expense and a decrease to cash. Increasing an expense is a debit and decreasing cash, an asset, is a credit. 4. Dividends earned and not yet received are recorded with a. a debit to an asset and a credit to a liability b. a credit to a revenue and a debit to an asset c. a debit to an expense and a credit to an asset d. a debit to a liability and a credit to cashB. Earned means it is a revenue. Revenues increase with a credit. Not yet received is a receivable which is an asset. Assets increase with a debit. 5. Using up prepaid rent is recorded with a. a credit to a liability b. a debit to an expense c. a credit to an expense d. a debit to an assetB. Using up the asset prepaid rent is an expense. An increase to an expense is recorded with a debit. Using an asset is also a decrease to the asset which is recorded with a credit. This is not oneof the choices. 6. Cash paid for salaries owed to employees for working last month isrecorded with a. a debit to a liability b. a credit to an expense c. a credit to a revenue d. a debit to an expenseA. Paying for an amount owed is a decrease to cash and a decrease to the liability.Assets are decreased with a credit and liabilities are decreased with a debit. The expense was recorded last period with a debit when the service was provided. 7. Depreciation expense is recorded in the same transaction as a. a credit to equipment b. a credit to accumulated depreciation c. a credit to accrued expenses d. a credit to prepaid expensesB. Accumulated depreciation is the account that is always credited when recording depreciation expense. This account is the total of all prior years’ depreciation expense. Accumulated depreciation is a contra asset account which means it is opposite of an asset. Assets increase with a debit, so accumulated depreciation is increased with a credit (opposite). 8. An increase to an expense will be recorded in the same transaction with a. a credit to a liability b. a debit to a liability c. a credit to a revenue d. a credit to owner’s equity A. The expense must be paid for now or paid for later. The expense is a debit, so the other account must be a credit. Payment now decreases the asset cash. Decreasing an asset is done with a credit which is not one of the choices. Paying later increases a liability which is done with a credit (b). A revenue and expense is not recorded together in the same journal entry. 9. The company issued stock to investors. Which of the following is done to record this transaction? a. credit owner’s equity and debit retained earnings b. debit an asset and credit an asset c. credit an assets and debit a liability d. debit an asset and credit owner’s equityD. Issuing stock to investors increases cash, recorded with a debit, and increases common stock, recorded with a credit. 10. The company purchases a truck and pays cash. Which of the following is done to record this transaction? a. debit cash and credit truck b. debit truck and credit accounts payable c. debit truck and credit cash d. debit truck expense and credit cashC. Truck increases and cash decreases. Both are assets. The truck increases with a debit and the cash decreases with a credit. 11. Journal entries are used for the purpose of a. recording transactions only b. recording and summarizing transactions c. determining if the accounting equation balances d. listing all the account names usedA. Journal entries are made to record transactions. T accounts summarize transactions to get account balances that are reported on the financial statements. Recording debits and credits properly will balance the accounting equation (c.) A trial balance lists all account names used. 12. Which of the following transactions requires a credit to a liability account? a. purchase an asset and pay cash b. purchase an asset and agree to pay later c. issue common stock d. repay a liabilityB. A credit to a liability account is an increase. An increase to a liability occurs when the company borrows to purchase an asset and pays later. Repaying a liability is a debit to the liability (d.) (a. & c.) do not impact a liability. 13. The account name debited when the company pays a supplier is a. accounts receivable b. accounts payable c. supplies d. cashB. Owing a supplier is called accounts payable. Cash is credited when payment is made. Accountspayable is debited.14. The account name debited when the company collects from a customer is a. cash b. accounts payable c. accounts receivable d. none of the aboveA. Amounts owed from the customer


View Full Document
Loading Unlocking...
Login

Join to view Practice Exam 1 and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Practice Exam 1 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?