please help me to get the answers choices below just choice the letter provied. thanks a lot
1.Asset would be increased by :
a.Debit to Prepaid Insurance
b.Debit to expense
c.Credit to Cash
d.Debit to Notes Payable
2.Failure to record a bill from Meralco for services already received will result in:
a.An overstatement of assets
b.An overstatement of Liabilities
c.An overstatement of Equity
d.An understatement of Assets
3.Elise Soriano invested land valued at 95,000 php in her business. This transaction would be recorded by:
a.Dr Cash 95,000 php & Cr Capital Stock 95,000 php
b.Dr Land 95,000 php & Cr Capital Stock 95,000 php
c.Dr Land 95,000 php& Cr Cash 95,000 php
d.Dr Cash 95,000 php & Cr Land 95,000 php
4.Define Trial Balance:
a.It can be considered a Formal inancial Statement
b.Used to prove that there are no errors in the Journal or ledger
c.A listing of every acct in the chart of accts.
d.Listing of the Balance of each account in (both active & inactive) use.
5.Which is correct ?
A.Transaction(s), Journal Entry(s), urce Document(s), Ledger, Trial balance
B.Source docs, Transaction(s), Ledger, Journal entry(s), Trial balance
C.Transaction, Source docs, journal entry(s), Trial balance and ledger
D.Transaction(s), source docs, journal entry(s), ledger, Trial balance
To answer the multiple-choice questions you provided:
1. Asset would be increased by:
- To determine the correct answer, you need to understand how assets are affected by different types of transactions. In this case, you should know that when an asset increases, it is typically recorded with a debit entry. So, carefully evaluate each option:
a. Debit to Prepaid Insurance - This would increase the prepaid insurance asset.
b. Debit to expense - This would decrease an asset, not increase it.
c. Credit to Cash - This would decrease an asset, not increase it.
d. Debit to Notes Payable - This would not directly impact an asset.
Therefore, the correct answer is a. Debit to Prepaid Insurance.
2. Failure to record a bill from Meralco for services already received will result in:
- Similar to the previous question, you need to analyze how this transaction affects the financial statement elements. In this case, you should know that failing to record a bill for services already received would not impact liabilities directly. It would impact the recognition of the expense related to the services received. So, review the options:
a. An overstatement of assets - This is incorrect as assets are not directly impacted.
b. An overstatement of liabilities - This is incorrect as liabilities are not directly impacted.
c. An overstatement of equity - This is incorrect as equity is not directly impacted.
d. An understatement of assets - This is the correct answer because the expense (related to the services received) is not recognized, resulting in an understatement of assets.
Therefore, the correct answer is d. An understatement of assets.
3. Elise Soriano invested land valued at 95,000 php in her business. This transaction would be recorded by:
- To determine the correct answer, you should understand how investments are recorded when assets are contributed. Analyze the options provided:
a. Dr Cash 95,000 php & Cr Capital Stock 95,000 php - This option correctly records the land contribution as an increase in capital stock and a decrease in cash.
b. Dr Land 95,000 php & Cr Capital Stock 95,000 php - This option incorrectly records the land directly as an increase in capital stock without reflecting the cash contribution.
c. Dr Land 95,000 php & Cr Cash 95,000 php - This option incorrectly records the land directly as an increase in cash without reflecting the capital stock increase.
d. Dr Cash 95,000 php & Cr Land 95,000 php - This option incorrectly records the cash decrease as a credit to land, not capital stock.
Therefore, the correct answer is a. Dr Cash 95,000 php & Cr Capital Stock 95,000 php.
4. Define Trial Balance:
- To answer this question, you need to have a clear understanding of what a trial balance represents. Review the options provided:
a. It can be considered a formal financial statement - This is incorrect, as a trial balance is not a formal financial statement. It is used as a tool in the accounting process.
b. Used to prove that there are no errors in the Journal or ledger - This is the correct answer as the trial balance aims to identify errors by ensuring that the total debits equal the total credits.
c. A listing of every account in the chart of accounts - This is incorrect, as a trial balance only includes active accounts and not every account in the chart of accounts.
d. Listing of the balance of each account (both active & inactive) - This is incorrect, as a trial balance only includes the balances of active accounts.
Therefore, the correct answer is b. Used to prove that there are no errors in the Journal or ledger.
5. Which is correct?
- To answer this question, you need to understand the correct sequence of accounting steps. Evaluate the options:
a. Transaction(s), Journal Entry(s), Source Document(s), Ledger, Trial balance - This is not the correct order as source documents should be recorded before journal entries.
b. Source Docs, Transaction(s), Ledger, Journal Entry(s), Trial balance - This is not the correct order as the source documents should be recorded before transactions.
c. Transaction, Source docs, Journal Entry(s), Trial balance, and Ledger - This is not the correct order as journal entries should be recorded before the trial balance.
d. Transaction(s), Source docs, Journal Entry(s), Ledger, Trial balance - This is the correct order, as transactions are documented through source documents, then recorded in the journal, posted to the ledger, and finally summarized in the trial balance.
Therefore, the correct answer is d. Transaction(s), Source docs, Journal Entry(s), Ledger, Trial balance.
I hope this explanation helps you understand how to get the correct answers. If you have any further questions, feel free to ask!