Froggy Jumps English for AccountingOnline version For XI Accounting 2025 by Dianita Putri 1 The account title "Unearned Revenue" is categorized as a liability. Which transaction most likely results in an increase to this account? a a.Paying an electricity bill. b b.Receiving cash for services to be performed next month. c c.Selling goods on credit. 2 A company purchases a new delivery van for cash. The transaction involves a debit to "Vehicles" and a credit to "Cash". Which statement accurately describes the effect on the fundamental accounting equation? a Equity increases; Assets increase. b Assets increase; Liabilities increase c Total Assets remain unchanged (one Asset increases, another Asset decreases). 3 The account "Drawings" or "Withdrawals" is used to record the owner taking cash or assets for personal use. In the chart of accounts, this account is a contra-equity account because it directly reduces: a Total Assets b Revenue and Gains c Owner's Equity 4 A company receives a bank loan that must be repaid within 18 months. The loan principal should be recorded in which type of account? a Current Liabilities (since it's due within one year or the operating cycle) b Non-current Assets. c Owner's Equity 5 Which account below is the least likely to be classified as a "Current Asset"? a Prepaid Insurance b Accumulated Depreciation c Inventory 6 An accountant is reviewing the "Trial Balance". She notices an abnormally large debit balance in the account "Sales Returns and Allowances". This indicates a potential issue related to: a High volume of customer dissatisfaction or defective products b Overstated Owner's Equity. c Understated liabilities. 7 The account "Cost of Goods Sold (COGS)" appears on the Income Statement. Based on its function, this account is fundamentally classified as a(n): a Expense, as it is the cost incurred to generate revenue b Liability, as it represents a debt c Revenue, as it is related to sales 8 Which pair of accounts normally carries a Debit balance? a Notes Payable and Accumulated Depreciation b Equipment and Rent Expense c Accounts Payable and Capital 9 When a business issues a promissory note to a supplier to extend the payment term, the transaction requires a Credit to which account? a Owner's Capital b Notes Payable c Cash 10 The accounting rule for Expense accounts states that a Debit increases the balance, and a Credit decreases the balance. The rationale behind this rule is that expenses: a Reduce Owner's Equity (which naturally increases with a Credit) b Are always paid with cash c Increase Total Assets 11 A company performs services for a customer and immediately receives cash. To record this, the accountant must Debit Cash. The corresponding Credit entry will be made to: a Service Revenue (Revenue) b Accounts Receivable (Asset) c Owner's Capital (Equity) 12 A business mistakenly debited "Equipment" (Asset) instead of "Repairs and Maintenance Expense" (Expense) for a minor repair. This error results in: a Total Assets being overstated and Net Income being overstated. b Total Liabilities being overstated. c Cash being understated. 13 To record the accrual of salaries owed to employees at the end of the period, the accountant must: a Debit Salaries Expense; Credit Salaries Payable. b Debit Accounts Receivable; Credit Salaries Payable. c Debit Salaries Payable; Credit Cash. 14 The Net Income reported on the Income Statement has a direct and crucial relationship with the Balance Sheet because Net Income: a Must be equal to the Cash balance. b Increases the Owner's Capital balance in the Equity section. c Is recorded as a liability. 15 Why is "Accumulated Depreciation" classified as a Contra-Asset account? a Because it has a normal Debit balance. b Because it reduces the value of a specific Asset (Fixed Asset) on the Balance Sheet. c Because it reduces a Liability. 16 Which account listed below is the only temporary account that normally has a Credit balance? a Sales Revenue b Prepaid Rent c Accounts Payable 17 The primary purpose of the "Closing Entries" process in the accounting cycle is to: a Transfer the balances of all temporary accounts (Revenue, Expenses, Drawings) to Owner's Capital b Record all depreciation for the year. c Determine the balance of Accounts Payable. 18 A company purchases a three-year insurance policy in advance. The cash payment should initially be recorded as a Debit to: a Accounts Payable b Prepaid Insurance (Asset) c Owner's Drawing 19 A "Bad Debts Expense" account is used to estimate the portion of Accounts Receivable that is deemed uncollectible. This estimation process is an application of which accounting principle? a Matching Principle (matching potential loss with related sales revenue). b Monetary Unit Principle c Cost Principle 20 The account "Interest Expense" arises from borrowing money. Where is the normal source (the corresponding Credit) that leads to the recording of Interest Expense? a Accounts Receivable b Notes Payable or Loans Payable c Inventory 21 A consulting firm recorded a large debit to "Miscellaneous Expenses". This indicates: a The company is managing its costs very well. b The company's cash balance is very high. c The company might lack proper classification for various small, unusual expenditures 22 When a company uses the "Allowance for Doubtful Accounts" method, this account acts as a: a Current Liability account to reflect future debt b Contra-Asset account to reduce Accounts Receivable to its net realizable value c Expense account appearing on the Balance Sheet 23 Which of the following accounts is a mixed account (contains both real and nominal elements) before the adjusting entry? a Sales b Cash c Supplies 24 A business pays its rent for the month. The journal entry involves a Debit to Rent Expense and a Credit to Cash. The effect of this transaction on the Owner's Equity is: a Increase in Liabilities. b Decrease (Expenses reduce Equity) c Increase in Revenue. 25 The account "Sales" is a nominal account. What does its nominal status indicate about its treatment at the end of the accounting period? a It must always equal the Cost of Goods Sold b Its balance is reset to zero by transferring it to the Income Summary account c It is converted into a liability account.
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