Name: __________________________

ACG 201Chapter 3 Quiz

Spring 2013

1. If total liabilities increased by $5,000, thenA) assets must have decreased by $5,000.B) stockholders' equity must have increased by $5,000.C) assets must have increased by $5,000, or stockholders' equity must have decreased by $5,000.D) assets and stockholders' equity each increased by $2,500.

2. If expenses are paid in cash, thenA) assets will increase.B) liabilities will decrease.C) stockholders' equity will increase.D) assets will decrease.

3. A revenue generallyA) increases assets and liabilities.B) increases assets and stockholders' equity.C) increases assets and decreases stockholders' equity.D) leaves total assets unchanged.

4. Which accounts normally have debit balances?A) Assets, expenses, and revenues.B) Assets, expense, and retained earnings.C) Assets, liabilities, and dividends.D) Assets, expenses, and dividends.

5. Which of the following journal entries is recorded correctly and in the basic format?A) Salaries/Wages Expense 550

Cash 1,500Advertising Expense 950

B) Salaries/Wages Expense 550Advertising Expense 950 Cash 1,600

C) Cash 1,500 Salaries/Wages Expense 550 Advertising Expense 950

D) Salaries/Wages Expense 550Advertising Expense 950 Cash 1,500

6. Journalize (make a journal entry for) the following business transactions in general journal form. Identify each transaction by number.

1. Owner invested $50,000 in exchange for common stock of the corporation.2. Hires an employee to be paid $400 per week, starting tomorrow.3. Paid two years' rent in advance, $7,200.4. Paid the worker's (from transaction #2) weekly wage.5. Recorded service revenue earned and received cash for the week, $1,500.

1. Cash 50,000 Common Stock 50,000

2. No entry.

3. Prepaid Rent 7,200 Cash 7,200

4. Wage Expense 400 Cash 400

5. Cash 1,500 Service Revenue 1,500

Page 1

Page 2