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ACC 201 Exam Study Questions with 100% Correct Verified Answers
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A company has a $14,457 credit balance in the cash account. Given this information, which of the following is a TRUE statement? - Answer It is NOT normal for the cash account to have a credit balance The first step in analyzing a transaction is to determine: - Answer the accounts that are invol...

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  • August 8, 2024
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ACC 201 Exam Study Questions with 100%
Correct Verified Answers
A company has a $14,457 credit balance in the cash account. Given this information,
which of the following is a TRUE statement? - Answer It is NOT normal for the cash
account to have a credit balance


The first step in analyzing a transaction is to determine: - Answer the accounts that are
involved.


The act of recording a transaction is called "journalizing." - Answer True


The posting reference column of the general journal provides a cross - reference
between the: - Answer journal and ledger.


The order in which accounts appear in the chart of accounts is: - Answer Assets,
Liabilities, Stockholders' Equity, revenues, expenses.


A trial balance will determine if: - Answer debits equal credits.


When the bank takes money out of a company's account, why does the bank say that
they have debited that account? - Answer The bank has decreased its' liability to the
company and liabilities decrease with debits.


The ________ keeps a running balance of an individual account. - Answer general ledger


Normal balance refers to the positive increase of an account and identifies the side of
the account (Debit or Credit) to which this positive balance is recorded. - Answer True

,The purpose of the trial balance is to - Answer A and C both pertain to the purpose of
the trial balance.


Collection of money from a cash customer represents a(n): - Answer revenue


Christine invested $32,000 in her business, Cuts by Christine. The journal entry would
include a: - Answer debit to Cash for $32,000 and a credit to Common Stock for $32,000


Debit means - Answer the left side of the account


The difference between the total debits and total credits of an account is called a: -
Answer balance


A $375 purchase of supplies on account was recorded by debiting Supplies for $375 and
crediting Cash for $375. The entry needed to correct this error is: - Answer Debit Cash
for $375 and credit Accounts Payable for $375.


The ________ indicates where the information originated and to where the information
was transferred. - Answer posting reference


The fourth step in recording a transaction in the general journal is to record the -
Answer explanation of the entry.


The Stockholders' Equity section would include accounts such as Retained Earnings and
Revenues. - Answer false


The posting reference column of the general journal will include the number of the
account to which the information is being posted. - Answer true

, The information from the general journal is transferred to the: - Answer general ledger.


Which of the following characterizes Walmart? - Answer Walmart both purchases and
sells products.


Gross profit percentage is computed by dividing net sales by cost of goods sold - Answer
false


When the perpetual records do not equal the physical count of the inventory, the
general ledger is updated with the differences. - Answer true


The time period within which an invoice may be paid early to receive a discount is called
the - Answer discount period.


What is liquidity? - Answer Liquidity is the ability to convert an asset to cash quickly.


The Statement of Retained Earnings for a merchandiser is prepared differently than that
of a service business. - Answer False


The accounting principle that relates to the expensing of freight charges is - Answer the
matching principle.


If damaged goods are received by the merchandiser and are kept with a reduction in
price, the account to be credited by the merchandiser for the reduction in price under a
perpetual inventory system is - Answer inventory


A list of credit customers is called a(n): - Answer Accounts Receivable subsidiary ledger.

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