Question

II. Multiple Choice

12. Which of the following entries records the acquisition of equipment on account?

1. Equipment, debit; Accounts payable, credit
2. Equipment, debit; cash, credit
3. Accounts payable, debit; Equipment, credit
4. Accounts payable, debit; Notes payable, credit

13. Which of the following entries records the payment of rent for the current month?

1. Cash, debit; Rent Expense, credit
2. Rent Expense, debit; Cash, credit
3. Rent expense, debit; Accounts Receivable, credit
4. Accounts Payable, debit; Rent Expense, credit

14. Which of the following entries records the billing of patients for service performed?

1. Accounts Payable, debit; Fees Earned, credit
2. Accounts Payable, debit; Cash, credit
3. Fees Earned, debit; Accounts Receivable, credit
4. Fees Earned debit; Cash, credit

15. A patient has a physical examination and asks the bookkeeper to mail the bill. The bookkeeper should

1. Make no entry until the cash is received
2. Cash, debit; Accounts Receivable, credit
3. Cash, debit; Fees Earned, credit
4. Accounts Payable, debit; Fees Earned credit

16. Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means

1. All of the information from the journal was correctly transferred to the ledger
2. All accounts have their correct balances in the ledger
3. Only the journal is accurate, the ledger may be incorrect
4. Only that the debit dollar amounts equal the credit dollar amounts

17. When amounts of a transactions are entered in an account on the right hand side, they are said to be

1. Credited
2. Debited
3. Added
4. Subtracted

18. A cash payment is recorded on the cash account as a

1. Neither a debit or credit
2. Credit
3. Debit
4. Either a debit or a credit

19. XYZ Hospital purchased X-ray equipment for $3,000, paid $750 down, with the remainder to be paid later. The correct entry would be

a	Equipment                   750             Cash                            750
b	Cash                            750 Accounts Payable         2,250             Equipment                   3,000
c	Equipment Expense      3,000             Accounts Payable         750             Cash                            2,250
d	Equipment                   3,000             Accounts Payable         2,250             Cash                            750
e	Cash                            750             Equipment                   750

20. Which of the following group of accounts are all assets?

1. Cash, Accounts Payable, Buildings
2. Accounts Receivable, Revenue, Cash
3. Prepaid Expense, Buildings, Patents
4. Unearned Revenues, Prepaid Expenses, Cash

21. Which of the following is not considered to be a liability?

1. Wages Payable
2. Accounts Receivable
3. Unearned Revenues
4. Accounts Payable

22. Which of the following statements is not true about liabilities?

1. Liabilities are debts owned to outsiders
2. Account titles of liabilities often include the term “payable”.
3. Cash received before services are performed are considered to be liabilities
4. Liabilities do not include wages owed to employees of the company.

23. Expenses can best be defined as

1. Assets with no future value to the company
2. Services that have been consumed in the process of generating revenues
3. Costs that have been incurred during the course of business
4. All are true

Answer 1

12) Answer : Opion A : Equipment, debit; Accounts payable, credit

Explanation : Equipment is an Fixed asset therefore it was debited as per Real account rule and Since equipment is purchased on account it was a liability,therefore credited to accounts payable.

13) Answer : Option B : Rent Expense, debit; Cash, credit

Explanation : Rent is an expense it was debited to Rent expense as per Nominal account rule and Cash paid is an out going so it was credited as per real account rule.