Accounting Practice Question
Practice Problems Module 3
Module 3
Practice Problems & Solutions
Introduction to Financial Accounting in the 21st Century © Gaber, Hayes & Porporato 2011
1
Practice Problems Module 3
PROBLEM 1 – MULTIPLE CHOICE QUESTIONS
1. In recording transactions, (a) The word debit means to increase and the word credit means to decrease. (b) Assets, expenses, and owners' drawing accounts are debited for increases. (c) Liabilities, revenue, and owners' drawing accounts are debited for increases. (d) Assets, expenses, and owners' capital accounts are debited for increases. (e) None of the above
2. Which of the following combinations of trial balance totals does not indicate a transposition error? (a) $65,470 debit and $64,570 credit (b) $32,540 debit and $35,420 credit (c) $25,670 debit and $26,670 credit (d) $14,517 debit and $15,471 credit
3. Sara had a beginning credit balance of $21,000 in her capital account. At the close of the period, Sara's drawing account had a debit balance of $2,200. On the end-of-period balance sheet, Sara's capital balance is $32,000. If Sara contributed an additional $2,000 to the firm during the period, what is the period's net income? (a) $12,400 (b) $11,200 (c) $9,000 (d) $10,800
4. Which of the following is not true of a general ledger trial balance? A. If it balances, it proves that the total debits equal total credits. B. It facilitates the preparation of financial statements. C. If it balances, it proves that no errors have been made in recording transactions. D. It will not detect an error where the accounts debited and credited are reversed in recording a particular transaction.
Introduction to Financial Accounting in the 21st Century © Gaber, Hayes & Porporato 2011
2
Practice Problems Module 3
5. During May, Hal Company invoiced customers $5,000 for goods delivered
Module 3
Practice Problems & Solutions
Introduction to Financial Accounting in the 21st Century © Gaber, Hayes & Porporato 2011
1
Practice Problems Module 3
PROBLEM 1 – MULTIPLE CHOICE QUESTIONS
1. In recording transactions, (a) The word debit means to increase and the word credit means to decrease. (b) Assets, expenses, and owners' drawing accounts are debited for increases. (c) Liabilities, revenue, and owners' drawing accounts are debited for increases. (d) Assets, expenses, and owners' capital accounts are debited for increases. (e) None of the above
2. Which of the following combinations of trial balance totals does not indicate a transposition error? (a) $65,470 debit and $64,570 credit (b) $32,540 debit and $35,420 credit (c) $25,670 debit and $26,670 credit (d) $14,517 debit and $15,471 credit
3. Sara had a beginning credit balance of $21,000 in her capital account. At the close of the period, Sara's drawing account had a debit balance of $2,200. On the end-of-period balance sheet, Sara's capital balance is $32,000. If Sara contributed an additional $2,000 to the firm during the period, what is the period's net income? (a) $12,400 (b) $11,200 (c) $9,000 (d) $10,800
4. Which of the following is not true of a general ledger trial balance? A. If it balances, it proves that the total debits equal total credits. B. It facilitates the preparation of financial statements. C. If it balances, it proves that no errors have been made in recording transactions. D. It will not detect an error where the accounts debited and credited are reversed in recording a particular transaction.
Introduction to Financial Accounting in the 21st Century © Gaber, Hayes & Porporato 2011
2
Practice Problems Module 3
5. During May, Hal Company invoiced customers $5,000 for goods delivered