Strayer ACC557 Midterm Exam (Part 1 & 2) 2015 Version

PART 1

Question

Question 1

Radio Moscow Industries purchased supplies for $1,000. They paid $400 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $600. Which of the following would be the correct way to complete the recording of the transaction?

a. Credit an asset account for $400.
b. Credit another liability account for $400.
c. Credit the retained earnings account for $400.
d. Debit the retained earnings account for $400.

Question 2

The first step in posting involves

a. entering in the appropriate ledger account the date, journal page, and debit amount

shown in the journal.

b. writing in the journal the account number to which the debit amount was posted.

c. writing in the journal the account number to which the credit amount was posted.

d. entering in the appropriate ledger account the date, journal page, and credit amount

shown in the journal.

Question 3

Credits

a. decrease both assets and liabilities.

b. decrease assets and increase liabilities.

c. increase both assets and liabilities.

d. increase assets and decrease liabilities.

Question 4

The first step in the recording process is to

a. analyze each transaction.

b. enter the transaction in a journal.

c. prepare a trial balance.

d. transfer journal information to ledger accounts.

Question 5

Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co. for $3,100 cash. The entry for this transaction will include a

a. debit to Equipment $2,700 and a debit to Supplies Expense $400 for Milkman.
b. credit to Cash for Milkman.
c. credit to Accounts Payable for Deerhoof.
d. debit to Equipment $2,700 and a debit to Supplies $400 for Deerhoof.