Question 1

A trial balance may prove that debits and credits are equal, but

Accepted Answer

A) an amount could be entered in the wrong account. 
B) a transaction could have been entered twice. 
C) a transaction could have been omitted. 
D) all of these. 
A) an amount could be entered in the wrong account. 
B) a transaction could have been entered twice. 
C) a transaction could have been omitted. 
D) all of these. D

Question 2

The book value of any depreciable asset is the difference between its cost and its salvage value.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following is a recordable event or item?

Accepted Answer

A) Changes in managerial policy 
B) The value of human resources 
C) Changes in personnel 
D) None of these 
A) Changes in managerial policy 
B) The value of human resources 
C) Changes in personnel 
D) None of these D

Question 4

The debit and credit analysis of a transaction normally takes place

Accepted Answer

A) before an entry is recorded in a journal. 
B) when the entry is posted to the ledger. 
C) when the trial balance is prepared. 
D) at some other point in the accounting cycle. 
A) before an entry is recorded in a journal. 
B) when the entry is posted to the ledger. 
C) when the trial balance is prepared. 
D) at some other point in the accounting cycle.

Question 5

Factors that shape an accounting information system include the

Accepted Answer

A) nature of the business. 
B) size of the firm. 
C) volume of data to be handled. 
D) all of these. 
A) nature of the business. 
B) size of the firm. 
C) volume of data to be handled. 
D) all of these.

Question 6

The double-entry accounting system means

Accepted Answer

A) Each transaction is recorded with two journal entries. 
B) Each item is recorded in a journal entry, then in a general ledger account. 
C) The dual effect of each transaction is recorded with a debit and a credit. 
D) More than one of the above. 
A) Each transaction is recorded with two journal entries. 
B) Each item is recorded in a journal entry, then in a general ledger account. 
C) The dual effect of each transaction is recorded with a debit and a credit. 
D) More than one of the above.

Question 7

A ledger is where the company initially records transactions and selected other events.

Accepted Answer

A) True 
 B)False

Question 8

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

Accepted Answer

A) a liability account and an asset account. 
B) an asset or contra asset account and an expense account. 
C) a liability account and an expense account. 
D) a receivable account and a revenue account. 
A) a liability account and an asset account. 
B) an asset or contra asset account and an expense account. 
C) a liability account and an expense account. 
D) a receivable account and a revenue account.

Question 9

An adjusted trial balance

Accepted Answer

A) is prepared after the financial statements are completed. 
B) proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made. 
C) is a required financial statement under generally accepted accounting principles. 
D) cannot be used to prepare financial statements. 
A) is prepared after the financial statements are completed. 
B) proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made. 
C) is a required financial statement under generally accepted accounting principles. 
D) cannot be used to prepare financial statements.

Question 10

Nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed.

Accepted Answer

A) True 
 B)False

Question 11

Stockholders' equity is not affected by all

Accepted Answer

A) cash receipts. 
B) dividends. 
C) revenues. 
D) expenses. 
A) cash receipts. 
B) dividends. 
C) revenues. 
D) expenses.

Question 12

Maintaining a set of accounting records is

Accepted Answer

A) optional. 
B) required by the Internal Revenue Service. 
C) required by the Foreign Corrupt Practices Act. 
D) required by the Internal Revenue Service and the Foreign Corrupt Practices Act. 
A) optional. 
B) required by the Internal Revenue Service. 
C) required by the Foreign Corrupt Practices Act. 
D) required by the Internal Revenue Service and the Foreign Corrupt Practices Act.

Question 13

Which of the following is a nominal (temporary) account?

Accepted Answer

A) Unearned Revenue 
B) Salary Expense 
C) Inventory 
D) Retained Earnings 
A) Unearned Revenue 
B) Salary Expense 
C) Inventory 
D) Retained Earnings

Question 14

Which of the following criteria must be met before an event or item should be recorded for accounting purposes?

Accepted Answer

A) The event or item can be measured objectively in financial terms. 
B) The event or item is relevant and reliable. 
C) The event or item is an element. 
D) All of these must be met. 
A) The event or item can be measured objectively in financial terms. 
B) The event or item is relevant and reliable. 
C) The event or item is an element. 
D) All of these must be met.

Question 15

A general journal chronologically lists transactions and other events, expressed in terms of debits and credits to accounts.

Accepted Answer

A) True 
 B)False

Question 16

At December 31, 2007, Sue's Boutique had 1,000 gift certificates outstanding, which had been sold to customers during 2007 for $50 each.Sue's operates on a gross margin of 60% of its sales.What amount of revenue pertaining to the 1,000 outstanding gift certificates should be deferred at December 31, 2007?

Accepted Answer

A) $0. 
B) $20,000. 
C) $30,000. 
D) $50,000. 
A) $0. 
B) $20,000. 
C) $30,000. 
D) $50,000.

Question 17

A journal entry to record a receipt of rent revenue in advance will include a

Accepted Answer

A) debit to rent revenue. 
B) credit to rent revenue. 
C) credit to cash. 
D) credit to unearned rent. 
A) debit to rent revenue. 
B) credit to rent revenue. 
C) credit to cash. 
D) credit to unearned rent.

Question 18

A trial balance

Accepted Answer

A) proves that debits and credits are equal in the ledger. 
B) supplies a listing of open accounts and their balances that are used in preparing financial statements. 
C) is normally prepared three times in the accounting cycle. 
D) all of these. 
A) proves that debits and credits are equal in the ledger. 
B) supplies a listing of open accounts and their balances that are used in preparing financial statements. 
C) is normally prepared three times in the accounting cycle. 
D) all of these.

Question 19

Nominal accounts are also called

Accepted Answer

A) temporary accounts. 
B) permanent accounts. 
C) real accounts. 
D) none of these. 
A) temporary accounts. 
B) permanent accounts. 
C) real accounts. 
D) none of these.

Question 20

With a perpetual inventory system, a company records purchases and sales directly in the Inventory account as the purchases and sales occur.

Accepted Answer

A) True 
 B)False

A trial balance may prove that debits and credits are equal, but

The book value of any depreciable asset is the difference between its cost and its salvage value.

Which of the following is a recordable event or item?

The debit and credit analysis of a transaction normally takes place

Factors that shape an accounting information system include the

The double-entry accounting system means

A ledger is where the company initially records transactions and selected other events.

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

An adjusted trial balance

Nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed.

Stockholders' equity is not affected by all

Maintaining a set of accounting records is

Which of the following is a nominal (temporary) account?

Which of the following criteria must be met before an event or item should be recorded for accounting purposes?

A general journal chronologically lists transactions and other events, expressed in terms of debits and credits to accounts.

A journal entry to record a receipt of rent revenue in advance will include a

A trial balance

Nominal accounts are also called

With a perpetual inventory system, a company records purchases and sales directly in the Inventory account as the purchases and sales occur.

Financial Accounting and Accounting Standards

Conceptual Framework Underlying Financial Accounting

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Filters

Exam 3: The Accounting Information System

A trial balance may prove that debits and credits are equal, but

The book value of any depreciable asset is the difference between its cost and its salvage value.

Which of the following is a recordable event or item?

The debit and credit analysis of a transaction normally takes place

Factors that shape an accounting information system include the

The double-entry accounting system means

A ledger is where the company initially records transactions and selected other events.

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

An adjusted trial balance

Nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed.

Stockholders' equity is not affected by all

Maintaining a set of accounting records is

Which of the following is a nominal (temporary) account?

Which of the following criteria must be met before an event or item should be recorded for accounting purposes?

A general journal chronologically lists transactions and other events, expressed in terms of debits and credits to accounts.

A journal entry to record a receipt of rent revenue in advance will include a

A trial balance

Nominal accounts are also called

With a perpetual inventory system, a company records purchases and sales directly in the Inventory account as the purchases and sales occur.

Financial Accounting and Accounting Standards

Conceptual Framework Underlying Financial Accounting

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Filters