3.3   Learning Objective 3-3   1) The informal listing of the ledger accounts and their balances in the ledger to aid in providing the equality of debits and credits is the: A) journal. B) ledger. C) income statement. D) trial balance.   2) If the debit and credit totals of a trial balance are not equal, it could be due to the following type of error: A) Failure to record a transaction B) Recording the same erroneous amount for both the debit and the credit sides of a transaction C) Incorrectly calculating the debit side of the trial balance […]

  71) When an asset expires or is used up, it becomes an expense.   72) If an adjustment to Supplies is not made, the balance in the Supplies account will be too low. 73) Rent expired at the end of an accounting period requires an adjustment.   74) The original cost of equipment is reduced by the amount of Depreciation Expense.   75) The spreading or allocating of the cost of a long-term asset is called depreciation.   76) Accumulated Depreciation is a contra-asset account.   77) The worksheet contains a trial balance.   78) Depreciation Expense is debited […]

  46) When revenue is closed: A) Owner's Capital will be debited. B) Income Summary will be debited. C) Income Summary will be credited. D) None of these are correct.   47) When the expenses are closed: A) Owner's Capital will be debited. B) Income Summary will be debited. C) Income Summary will be credited. D) None of these are correct.   48) When the Withdrawals account is closed: A) Owner's Capital will be debited. B) Income Summary will be debited. C) Income Summary will be credited. D) None of these are correct. 49) The Income Summary account debited and […]

  26) M. Smuts showed a net income of $6,000. The entry to close the Income Summary account would include a: A) debit to M. Smuts Capital, $6,000. B) credit to M. Smuts Capital, $6,000. C) debit to Income Summary, $6,000. D) Both B and C are correct.   27) J. Oros showed a net loss of $3,200. The entry to close the Income Summary account would include a: A) debit to Oros, Capital, $3,200. B) debit to Income Summary , $3,200. C) credit to Oros, Capital, $3,200. D) credit to Cash, $3,200.   28) The balance in the J. […]

  61) A business's fiscal year that ends at the same time as a slow seasonal period begins is the natural business year.   62) The debit part of the transaction is recorded first in the journal entry.   63) The debit is indented in a journal entry. 64) A compound journal entry affects more than two accounts in the transaction.   65) A company would review the ledger if an account balance was needed.   66) Prepare in proper form journal entries for the following transactions. Omit explanations.   October 2Owner made a cash investment into the company $5,000 […]