Question 1

Posting

Accepted Answer

A) should be performed in account number order. 
B) accumulates the effects of journalized transactions in the individual accounts. 
C) involves transferring all debits and credits on a journal page to the trial balance. 
D) is accomplished by examining ledger accounts and seeing which ones need updating. 
A) should be performed in account number order. 
B) accumulates the effects of journalized transactions in the individual accounts. 
C) involves transferring all debits and credits on a journal page to the trial balance. 
D) is accomplished by examining ledger accounts and seeing which ones need updating.

Question 2

The final step in the recording process is to transfer the journal information to the

Accepted Answer

A) trial balance. 
B) financial statements. 
C) ledger. 
D) file cabinets. 
A) trial balance. 
B) financial statements. 
C) ledger. 
D) file cabinets.

Question 3

The double-entry accounting system is the basis of accounting systems

Accepted Answer

A) worldwide. 
B) worldwide, except for the U.S. 
C) in the U.S.only 
D) neither internationally nor in the U.S. 
A) worldwide. 
B) worldwide, except for the U.S. 
C) in the U.S.only 
D) neither internationally nor in the U.S.

Question 4

Posting is performed by transferring information from the

Accepted Answer

A) source documents to the journal. 
B) ledger to the journal. 
C) source documents to the ledger. 
D) journal to the ledger. 
A) source documents to the journal. 
B) ledger to the journal. 
C) source documents to the ledger. 
D) journal to the ledger.

Question 5

If services are rendered on account, then

Accepted Answer

A) assets will decrease. 
B) liabilities will increase. 
C) stockholders' equity will increase. 
D) liabilities will decrease. 
A) assets will decrease. 
B) liabilities will increase. 
C) stockholders' equity will increase. 
D) liabilities will decrease.

Question 6

An expense

Accepted Answer

A) decreases assets and liabilities. 
B) decreases stockholders' equity. 
C) leaves stockholders' equity unchanged. 
D) is basically the same as a liability. 
A) decreases assets and liabilities. 
B) decreases stockholders' equity. 
C) leaves stockholders' equity unchanged. 
D) is basically the same as a liability.

Question 7

When collection is made on Accounts Receivable,

Accepted Answer

A) total assets will remain the same. 
B) stockholders equity will increase. 
C) total assets will increase. 
D) total assets will decrease. 
A) total assets will remain the same. 
B) stockholders equity will increase. 
C) total assets will increase. 
D) total assets will decrease.

Question 8

Which of the following describes the classification and normal balance of the Unearned Rent Revenue account?

Accepted Answer

A) Asset, debit 
B) Liability, credit 
C) Revenues, credit 
D) Expense, debit 
A) Asset, debit 
B) Liability, credit 
C) Revenues, credit 
D) Expense, debit

Question 9

A company that receives money in advance of performing a service

Accepted Answer

A) debits Cash and credits Unearned Service Revenue. 
B) debits Unearned Service Revenue and credits Accounts Payable 
C) debits Cash and credits Prepaid Insurance. 
D) debits Cash and credits Accounts Receivable. 
A) debits Cash and credits Unearned Service Revenue. 
B) debits Unearned Service Revenue and credits Accounts Payable 
C) debits Cash and credits Prepaid Insurance. 
D) debits Cash and credits Accounts Receivable.

Question 10

A new account is opened for each transaction entered into by a business firm.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an asset?

Accepted Answer

A) Service Revenue 
B) Notes Payable 
C) Supplies Expense 
D) Prepaid Rent 
A) Service Revenue 
B) Notes Payable 
C) Supplies Expense 
D) Prepaid Rent

Question 12

Under IFRS, the trial balance

Accepted Answer

A) follows the same format as under GAAP. 
B) shows credits on the left and debits on the right. 
C) include less accounts than under GAAP. 
D) include more accounts than under GAAP. 
A) follows the same format as under GAAP. 
B) shows credits on the left and debits on the right. 
C) include less accounts than under GAAP. 
D) include more accounts than under GAAP.

Question 13

On January 14, Decker industries purchased supplies of $500 on account. The entry to record the purchase will include

Accepted Answer

A) a debit to Supplies and a credit to Accounts Payable. 
B) a debit to Supplies Expense and a credit to Accounts Receivable. 
C) a debit to Supplies and a credit to Cash. 
D) a debit to Accounts Receivable and a credit to Supplies. 
A) a debit to Supplies and a credit to Accounts Payable. 
B) a debit to Supplies Expense and a credit to Accounts Receivable. 
C) a debit to Supplies and a credit to Cash. 
D) a debit to Accounts Receivable and a credit to Supplies.

Question 14

The principal purpose of posting is to

Accepted Answer

A) help identify errors made in the journal. 
B) accumulate the effects of journalized transactions in the individual accounts. 
C) enter transactions directly into the ledger. 
D) help determine if the financial statements are ready to be prepared. 
A) help identify errors made in the journal. 
B) accumulate the effects of journalized transactions in the individual accounts. 
C) enter transactions directly into the ledger. 
D) help determine if the financial statements are ready to be prepared.

Question 15

Crawford Company started the year with $60,000 in its Common Stock account and a credit balance in Retained Earnings of $44,000. During the year, the company earned net income of $48,000 and declared and paid $20,000 of dividends. In addition, the company sold additional common stock amounting to $28,000. As a result, the amount of its retained earnings at the end of the year would be

Accepted Answer

A) $160,000. 
B) $72,000. 
C) $132,000. 
D) $100,000. 
A) $160,000. 
B) $72,000. 
C) $132,000. 
D) $100,000.

Question 16

In the first month of operations, the total of the debit entries to the Cash account amounted to $2,000 and the total of the credit entries to the Cash account amounted to $1,500. The Cash account has a

Accepted Answer

A) $1,500 credit balance. 
B) $500 debit balance. 
C) $2,000 debit balance. 
D) $500 credit balance. 
A) $1,500 credit balance. 
B) $500 debit balance. 
C) $2,000 debit balance. 
D) $500 credit balance.

Question 17

A journal

Accepted Answer

A) contains only asset and liability accounts. 
B) is a collection of the entire group of accounts maintained by a company. 
C) provides a chronological record of transactions. 
D) should show accounts in alphabetical order. 
A) contains only asset and liability accounts. 
B) is a collection of the entire group of accounts maintained by a company. 
C) provides a chronological record of transactions. 
D) should show accounts in alphabetical order.

Question 18

Dividends are classified as an expense.

Accepted Answer

A) True 
 B)False

Question 19

The purchase or sale of long-lived assets used in operating the business is

Accepted Answer

A) an operating activity. 
B) an investing activity. 
C) a financing activity. 
D) None of these answer choices are correct. 
A) an operating activity. 
B) an investing activity. 
C) a financing activity. 
D) None of these answer choices are correct.

Question 20

Which of the following is not true of the terms debit and credit?

Accepted Answer

A) They can be abbreviated as Dr.and Cr. 
B) They can be interpreted to mean increase and decrease. 
C) They can be used to describe the balance of an account. 
D) They can be interpreted to mean left and right. 
A) They can be abbreviated as Dr.and Cr. 
B) They can be interpreted to mean increase and decrease. 
C) They can be used to describe the balance of an account. 
D) They can be interpreted to mean left and right.

Exam 3: The Accounting Information System

Posting

The final step in the recording process is to transfer the journal information to the

The double-entry accounting system is the basis of accounting systems

Posting is performed by transferring information from the

If services are rendered on account, then

An expense

When collection is made on Accounts Receivable,

Which of the following describes the classification and normal balance of the Unearned Rent Revenue account?

A company that receives money in advance of performing a service

A new account is opened for each transaction entered into by a business firm.

Which of the following is an asset?

Under IFRS, the trial balance

On January 14, Decker industries purchased supplies of $500 on account. The entry to record the purchase will include

The principal purpose of posting is to

In the first month of operations, the total of the debit entries to the Cash account amounted to $2,000 and the total of the credit entries to the Cash account amounted to $1,500. The Cash account has a

A journal

Dividends are classified as an expense.

The purchase or sale of long-lived assets used in operating the business is

Which of the following is not true of the terms debit and credit?

Introduction to Financial Statements

A Further Look at Financial Statements

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

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