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UNIT 2 PRATICE TEST

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Sole Proprietorship and Banking
Kathleen Keller
Quiz by Kathleen Keller, updated more than 1 year ago
Kathleen Keller
Created by Kathleen Keller over 6 years ago
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Resource summary

Question 1

Question
What is the correct journal entry for the transaction, PAID CASH TO REPAIR OFFICE EQUIPMENT, $250?
Answer
  • A. Debit Cash and credit Miscellaneous Expense
  • B. Debit Cash and credit Repair Expense
  • C. Debit Miscellaneous Expense and credit Cash
  • D. Debit Repair Expense and credit Cash

Question 2

Question
What is the correct entry for the transaction, PAID $150 FOR ADVERTISING?
Answer
  • A. Credit Cash and credit Advertising Expense
  • B. Debit Advertising Expense and credit Cash
  • C. Debit Cash and credit Advertising Expense
  • D. Debit Cash and credit Miscellaneous Expense

Question 3

Question
What is the correct journal entry for the transaction, PAID THE TELEPHONE BILL, $125?
Answer
  • A. Debit Equipment and credit Cash
  • B. Debit Utilities Expense and credit Cash
  • C. Debit Cash and credit Equipment
  • D. Debit Cash and credit Utilities Expense

Question 4

Question
What is the correct journal entry for the transaction, BOUGHT SUPPLIES ON ACCOUNT FROM STEINMAN
Answer
  • Debit Accounts Payable/Steinman Company and credit Cash
  • Debit Accounts Payable/Steinman Company and credit Supplies
  • Debit Supplies and credit Accounts Payable/Steinman Company
  • Debit Supplies and credit Cash

Question 5

Question
William has almost finished updating the Supplies account at the end of the month. He has transferred all of the information in the General Journal to the General Ledger. What is the LAST step for William to do?
Answer
  • Balancing the journal.
  • Proving cash.
  • Record a new account balance.
  • Record an account number in the journal.

Question 6

Question
Bill James discovered that a transaction for Utilities Expense was journalized and posted in error as a debit to Repair Expense, $250. What is the entry to correct the error?
Answer
  • Debit Utilities Expense, $250; credit Cash, $250
  • Debit Utilities Expense, $250; credit Repairs Expense, $250
  • Debit Repair Expense, $250; credit Utilities Expense, $250
  • Debit Cash, $250; debit Utilities Expense, $250

Question 7

Question
What is the correct journal entry for the transaction, RECEIVED CASH FROM SALES, $150?
Answer
  • Debit Miscellaneous Expense and credit Sales
  • Debit Sales and credit Cash
  • Debit Cash and credit Sales
  • Debit Cash and debit Sales

Question 8

Question
What is the correct journal entry for the transaction, PAID CASH FOR PRINTER CARTRIDGES?
Answer
  • Debit Owner's drawing and credit Cash
  • Debit Cash and credit Owner's Capital
  • Debit Miscellaneous Expense and credit Cash
  • Debit Supplies and credit Cash

Question 9

Question
James discovered that a transaction for an Advertising Expense was journalized and posted in error as a debit to Miscellaneous Expense, $200. What is the entry to correct the error?
Answer
  • Debit Advertising Expense, $200; credit Cash, $200
  • Debit Advertising Expense, $200; credit Miscellaneous Expense, $200
  • Debit Miscellaneous Expense, $200; credit Advertising Expense, $200
  • Debit Cash, $200; credit Advertising Expense, $200

Question 10

Question
What is the correct journal entry for the transaction, RECEIVED BIKE RENTAL FEES, $375?
Answer
  • Debit Cash and credit Rental Fees
  • Debit Miscellaneous Expense and credit Cash
  • Debit Rental Fees and credit Cash
  • Debit Rental Fees and credit Miscellaneous Expense

Question 11

Question
What is the correct journal entry for the transaction PAID CASH FOR A DELIVERY (MISCELLANEOUS EXPENSE), $25?
Answer
  • Debit Supplies and credit Miscellaneous Expense
  • Debit Miscellaneous Expense and credit Cash
  • Debit Cash and credit Miscellaneous Expense
  • Debit Cash and credit Truck Expense

Question 12

Question
What is the correct journal entry for the transaction, RECEIVED CASH ON ACCOUNT FROM BILL'S LIMOS FOR, $500?
Answer
  • Debit Cash and credit Accounts Receivable/Bill's Limos
  • Debit Accounts Receivable/Bills Limos and credit Cash
  • Debit Accounts Receivable/Bill's Limos and credit Jane Smith, Capital
  • Debit Cash and debit Accounts Receivable/Bill's Limos

Question 13

Question
What is the correct journal entry for the transaction, PAID THE GAS BILL, $125?
Answer
  • Credit Cash and credit Equipment
  • Debit Cash and credit Utilities Expense
  • Debit Equipment and credit Cash
  • Debit Utilities Expense and credit Cash

Question 14

Question
A journal's column totals are General Debit, $500; General Credit, $200; Sales Credit, $750; Cash Debit, $1,000; Cash Credit, $600. This means that the:
Answer
  • Cash debit column is incorrect
  • Journal does not prove.
  • General credit column is incorrect
  • Journal proves.

Question 15

Question
What is the correct journal entry for the transaction, PAID CASH FOR RENT, $700?
Answer
  • Debit Cash and credit Rent Expense
  • Debit Cash and credit Utilities Expense
  • Debit Miscellaneous Expense and credit Cash
  • Debit Rent Expense and credit Cash

Question 16

Question
What is the correct journal entry for the transaction, PAID CASH FOR INSURANCE, $400?
Answer
  • Debit Insurance Expense and credit Cash
  • Debit Prepaid Insurance and credit Cash
  • Debit Cash and credit Prepaid Insurance
  • Debit Cash and credit Insurance Expense

Question 17

Question
What is the correct journal entry for the transaction, PAID CASH TO MARK JOHNSON, OWNER FOR PERSONAL USE, $900?
Answer
  • Debit Cash and credit Mark Johnson, Capital
  • Debit Cash and credit Mark Johnson, Drawing
  • Debit Mark Johnson, Capital, and credit Cash
  • Debit Mark Johnson, Drawing and credit Cash

Question 18

Question
Mike is posting journal entries to the General Ledger. He has just calculated the new account balance in the credit column for Sales. What is the NEXT step in the posting procedure?
Answer
  • Write the account number
  • Record the account number that the entry was posted to in the journal in the post reference column.
  • Write the debit amount
  • Record the source document in the Document Number Column

Question 19

Question
What is the correct journal entry for the transaction, RECEIVED CASH FROM SALES, $250?
Answer
  • Debit Cash and credit Sales
  • Debit Cash and debit Sales
  • Debit Miscellaneous Expense and credit Sales
  • Debit Sales and credit Cash

Question 20

Question
What is the correct journal entry for the transaction, PAID CASH FOR INSURANCE, $200?
Answer
  • Debit Cash and credit Prepaid Insurance
  • Debit Cash and credit Insurance Expense
  • Debit Insurance Expense and credit Cash
  • Debit Prepaid Insurance and credit Cash

Question 21

Question
What is the correct entry for the transaction, HANS SCHMIDT INVESTED $2000 OF HIS OWN MONEY INTO THE BUSINESS?
Answer
  • Debit HANS SCHMIDT, Capital and credit Cash
  • Debit Miscellaneous Expense and credit HANS SCHMIDT, Capital
  • Debit Cash and credit HANS SCHMIDT, Capital
  • Debit Cash and credit Hans Schmidt, Drawing

Question 22

Question
What is the correct journal entry for the transaction, PAID CASH ON ACCOUNT TO AVIS SUPPLY COMPANY, $500?
Answer
  • Debit Cash and credit Owner's Capital
  • Debit Accounts Receivable/Avis Supply Company and credit Cash
  • Debit Accounts Payable/Avis Supply Company and credit Cash
  • Debit Cash and credit Owner's Drawing

Question 23

Question
What is the correct journal entry for the transaction, PAID CASH FOR COMPUTER PAPER?
Answer
  • Debit Cash and credit Owner's Capital
  • Debit Owner's Drawing and credit Cash
  • Debit Miscellaneous Expense and credit Cash
  • Debit Supplies and credit Cash

Question 24

Question
What is the correct journal entry for the transaction, RECEIVED CASH FROM OWNER DANA JACKSON AS INVESTMENT, $5000?
Answer
  • Debit Cash and credit Dana Jackson, Capital
  • Debit Cash and credit Dana Jackson, Drawing
  • Debit Dana Jackson Capital and credit Cash
  • Debit Miscellaneous Expense and credit Dana Jackson, Capital

Question 25

Question
What is the correct journal entry for the transaction, PAID CASH FOR AN OFFICE DESK, $250?
Answer
  • Debit Cash and credit Office Equipment
  • Debit Cash and debit Office Equipment
  • Debit Computer Supplies and credit Cash
  • Debit Office Equipment and credit Cash

Question 26

Question
What is the correct journal entry for the transaction, PAID CASH ON ACCOUNT TO VENDOR JONES SUPPLY, $1000?
Answer
  • Debit Accounts Payable/Jones Supply and credit Cash
  • Debit Cash and credit Accounts Payable/Jones Supply
  • Debit Cash and credit Accounts Receivable/Jones Supply
  • Debit Supplies and credit Cash

Question 27

Question
What is the correct journal entry for the transaction PAID CASH FOR MISCELLANEOUS EXPENSE, $400?
Answer
  • Debit Cash and credit Miscellaneous Expense
  • Debit Cash and debit Miscellaneous Expense
  • Debit Miscellaneous Expense and credit Cash
  • Debit Supplies and credit Miscellaneous Expense

Question 28

Question
On October 31, Cherokee Company received a bank statement showing the following information: Bank statement balance $4,375.00 Bank service charge $25.00 The records of the business show the following information: Outstanding deposit, Oct. 29 $500.00 Outstanding deposit, Oct. 30 $175.00 Outstanding checks: No. 329 $325.00, No. 330 $125.00, No. 331 $75.00 Assuming that the bank statement balance is correct, what is the correct Cash account balance on October 31?
Answer
  • $4,350.00
  • $4,500.00
  • $4,525.00
  • $4,550.00

Question 29

Question
On March 31, Iredell Company received a bank statement showing the following information. Bank statement balance $2,345.00 Bank service charge $15.00 The records of the business show the following information: Outstanding deposit, Mar. 29 $250.00 Outstanding checks: No. 288 $225.00 No. 289 $25.00 Calculate the adjusted checkbook balance?
Answer
  • $1,325.00
  • $1,474.00
  • $2,160.00
  • $2,345.00

Question 30

Question
On February 14, Watauga Enterprises received notice from the bank of a dishonored check from Wilkes Company in the amount of $200.00. The bank charged a service fee of $25.00. What is the correct journal entry for Watauga Enterprises to record the dishonored check?
Answer
  • Debit Accounts Receivable-Wilkes Company $200.00, debit Bank Service Charge $25.00; credit Cash $225.00
  • Debit Accounts Receivable-Wilkes Company $225.00; credit Bank Service Charge $25.00, credit Cash $200.00
  • Debit Accounts Receivable-Wilkes Company $225.00; credit Cash $225.00
  • Debit Cash $225.00; credit Accounts Receivable-Wilkes Company $225.00

Question 31

Question
On April 16, Caldwell Company received notice from the bank of a dishonored check from Hickory Hosiery in the amount of $55.00. The bank charged a service fee of $25.00. What is the correct journal entry for Caldwell Company to record the dishonored check?
Answer
  • Debit Accounts Receivable-Hickory Hosiery $55.00, debit Bank Service Charge $25.00; credit Cash $80.00
  • Debit Accounts Receivable-Hickory Hosiery $80.00, Credit Bank Service Charge $25.00, Credit Cash $55.00
  • Debit Accounts Receivable-Hickory Hosiery $80.00; credit Cash $80.00
  • Debit Cash $80.00; credit Accounts Receivable-Hickory Hosiery $80.00

Question 32

Question
Timothy wants to replenish the $300 petty cash fund. He has receipts for the following total payments: postage (Office Expense), $35; supplies, $25; and repairs, $95. A cash count shows $160 in the petty cash box. What is the correct journal entry to record the transaction?
Answer
  • Debit Repair Expense $95, debit Office Expense $35, debit Supplies $25 and credit Cash $155
  • Debit Repair Expense $95, debit Office Expense $35, debit Supplies $25 and credit Petty Cash $155
  • Debit Repair Expense $95, debit Office Expense $35, debit Supplies $25, and credit cash $140, credit Cash Short and Over $15
  • Debit Repair Expense $95, debit Office Expense $35, debit Supplies $25, debit Cash Short and Over $5, and credit cash $160

Question 33

Question
Jessica wants to replenish the $200 petty cash fund. She has receipts for the following total payments: supplies, $85; and repairs, $55. A cash count shows $75 in the petty cash box. What is the correct journal entry to record the transaction?
Answer
  • Debit Repair Expense $55, debit Supplies $85 and credit Cash $140
  • Debit Repair Expense $55, debit Supplies $85 and credit Petty Cash $140
  • Debit Repair Expense $55, debit Supplies $85, and credit Cash $125, credit Cash Short and Over $15
  • Debit Repair Expense $55, debit Supplies $85, debit Cash Short and Over $15, and credit Cash $155

Question 34

Question
Daniel wants to replenish the $250 petty cash fund. He has receipts for the following total payments: postage, $34; and repairs, $76. A cash count shows $100 in the petty cash box. What is the correct journal entry to record the transaction?
Answer
  • Debit Repair Expense $76, debit Office Expense $34, debit Cash Short and Over $40, and credit Cash $150
  • Debit Repair Expense $76, debit Office Expense $34 and credit Cash $110
  • Debit Repair Expense $76, debit Office Expense $34 and credit Petty Cash $110
  • Debit Repair Expense $76, debit Office Expense $34, and credit Cash $110, credit Cash Short and Over $40

Question 35

Question
Mary wants to replenish the $200 petty cash fund. She has receipts for the following total payments: supplies, $25; and repairs, $45. A cash count shows $130 in the petty cash box. What is the correct journal entry to record the transaction?
Answer
  • Debit Cash $70 and credit Miscellaneous Expense $70
  • Debit Miscellaneous Expense $70 and credit Cash $70
  • Debit Repair Expense $45, debit Supplies $25 and credit Cash $70
  • Debit Repair Expense $45, debit Supplies $25 and credit Petty Cash $70

Question 36

Question
Michael wants to establish a $500 petty cash fund for his business. He has requested a check for $500. What is the correct journal entry to record the transaction?
Answer
  • Debit Cash $500 and credit Petty Cash $500
  • Debit Miscellaneous Expense $500 and credit Cash $500
  • Debit Petty Cash $500 and credit Cash $500
  • Debit Petty Cash $500 and credit Miscellaneous Expense $500

Question 37

Question
Michelle wants to replenish the $300 petty cash fund. She has receipts for the following total payments: postage (Office Expense), $40; supplies, $25; and repairs, $45. A cash count shows $175 in the petty cash box. What is the correct journal entry to record the transaction?
Answer
  • Debit Repair Expense $45, debit Supplies $25, debit Office Expense $40 and credit Cash $110
  • Debit Repair Expense $45, debit Supplies $25, debit Office Expense $40 and credit Petty Cash $110
  • Debit Repair Expense $45, debit Supplies $25, debit Office Expense $40 and credit Cash $110, credit Cash Short and Over $15
  • Debit Repair Expense $45, debit Supplies $25, debit Office Expense $40 and debit Cash Short and Over $15, and credit Cash $125

Question 38

Question
Steve wants to replenish the $200 petty cash fund. He has receipts for the following total payments: supplies, $18; and repairs, $32. A cash count shows $145 in the petty cash box. What is the correct journal entry to record the transaction?
Answer
  • Debit Repair Expense $32, debit Supplies $18 and credit Cash $50
  • Debit Repair Expense $32, debit Supplies $18 and credit Petty Cash $50
  • Debit Repair Expense $32, debit Supplies $18, and credit Cash $60, credit Cash Short and Over $5
  • Debit Repair Expense $32, debit Supplies $18, debit Cash Short and Over $5, and credit Cash $55

Question 39

Question
What is the correct journal entry for the transaction, PAID CASH TO JOHN SMITH, OWNER FOR PERSONAL USE, $500?
Answer
  • Debit Cash and credit John Smith, Capital
  • Debit Cash and credit John Smith, Drawing
  • Debit John Smith, Capital, and credit Cash
  • Debit John Smith, Drawing and credit Cash

Question 40

Question
On October 29 of the current year, McDowell Company received a bank statement dated October 28. The following information is obtained from the bank statement and from the records of the business: Bank statement balance $1,625.00 Bank service charge 3.00 Outstanding checks: No. 123 $ 80.00 No. 125 75.00 Outstanding deposit: October 28 $300.00 Checkbook balance on Check Stub No. 126 $1,477.00 Given the information above, calculate the adjusted checkbook balance.
Answer
  • $1,474.00
  • $1,325.00
  • $1,622.00
  • $1,925.00

Question 41

Question
Given the below information, calculate the adjusted bank balance. On July 31 of the current year, Beaufort Brothers received a bank statement dated July 30. The following information is obtained from the bank statement and from the records of the business: Bank statement balance $1,350.00 Bank service charge $5.00 Outstanding checks: No. 250 $95.00 No. 251 $175.00 Outstanding deposits: July 30 $250.00 Checkbook balance on Check Stub No. 252: $1,335.00
Answer
  • $1,080.00
  • $1,330.00
  • $1,370.00
  • $1,600.00

Question 42

Question
On December 3, Union Manufacturing Company received a bank statement dated November 30. The following information is obtained from the bank statement and from the records of the business: Bank statement balance $3,425.00 Bank service charge $4.50 Outstanding deposits: November 29 $300.00 November 30 $400.00 Outstanding checks: No. 290 $187.50 No. 294 $67.50 Checkbook balance on Check Stub No. 296: $3,874.50 What is the journal entry to record the bank service charge, using the above information?
Answer
  • Debit Transaction Fee $4.50, Credit Cash $4.50
  • Debit Cash $4.50, Credit Transaction Fee $4.50
  • Debit Miscellaneous Expense $4.50, Credit Cash $4.50
  • Debit Cash $4.50, Credit Miscellaneous Expense $4.50
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