Question 1

Liabilities are increased with debits and decreased with credits.

Accepted Answer

A) True 
 B)False

Question 2

Which account below is not a subdivision of stockholders' equity?

Accepted Answer

A) Dividends 
B) Revenues 
C) Expenses 
D) Liabilities 
A) Dividends 
B) Revenues 
C) Expenses 
D) Liabilities

Question 3

During January 2017, its first month of operation, Osborn Enterprises earned net income of $6,800 and paid dividends to the owners of $2,000. At January 31, the balance in Retained Earnings will be

Accepted Answer

A) $0. 
B) $6,800 credit. 
C) $4,800 credit. 
D) $2,000 debit. 
A) $0. 
B) $6,800 credit. 
C) $4,800 credit. 
D) $2,000 debit.

Question 4

Debits

Accepted Answer

A) increase both assets and liabilities. 
B) decrease both assets and liabilities. 
C) increase assets and decrease liabilities. 
D) decrease assets and increase liabilities. 
A) increase both assets and liabilities. 
B) decrease both assets and liabilities. 
C) increase assets and decrease liabilities. 
D) decrease assets and increase liabilities.

Question 5

Collection on an account receivable will increase both cash and accounts receivable.

Accepted Answer

A) True 
 B)False

Question 6

The basic format of a journal would not include a(n)

Accepted Answer

A) brief explanation. 
B) account title column. 
C) T-account. 
D) date column. 
A) brief explanation. 
B) account title column. 
C) T-account. 
D) date column.

Question 7

Unearned Service Revenue is classified as a liability on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

A trial balance is prepared at the beginning of an accounting period.

Accepted Answer

A) True 
 B)False

Question 9

A revenue generally

Accepted Answer

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

Question 10

Transactions are recorded in alphabetical order in a journal.

Accepted Answer

A) True 
 B)False

Question 11

Equipment costing $20,000 is purchased by paying $5,000 cash and signing a note payable for the remainder. The journal entry should include a

Accepted Answer

A) debit to Notes Payable. 
B) credit to Cash. 
C) credit to Notes Receivable. 
D) credit to Equipment. 
A) debit to Notes Payable. 
B) credit to Cash. 
C) credit to Notes Receivable. 
D) credit to Equipment.

Question 12

On June 1, 2017, England Inc. reported a cash balance of $42,000. During June, England made deposits of $16,000 and made disbursements totaling $48,000. What is the cash balance at the end of June?

Accepted Answer

A) $10,000 credit balance 
B) $58,000 debit balance 
C) $10,000 debit balance 
D) $6,000 credit balance 
A) $10,000 credit balance 
B) $58,000 debit balance 
C) $10,000 debit balance 
D) $6,000 credit balance

Question 13

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

Accepted Answer

A) True 
 B)False

Question 14

An accounting record that includes a list of accounts and their balances at a given time is called a

Accepted Answer

A) trial balance. 
B) general journal. 
C) general ledger. 
D) chart of accounts. 
A) trial balance. 
B) general journal. 
C) general ledger. 
D) chart of accounts.

Question 15

Which statement about an account is true?

Accepted Answer

A) In its simplest form, an account consists of two parts. 
B) An account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items. 
C) There are separate account for specific assets and liabilities but only one account for stockholders' equity items. 
D) The left side of an account is the credit or decrease side. 
A) In its simplest form, an account consists of two parts. 
B) An account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items. 
C) There are separate account for specific assets and liabilities but only one account for stockholders' equity items. 
D) The left side of an account is the credit or decrease side.

Question 16

Posting

Accepted Answer

A) transfers journal entries to ledger accounts. 
B) transfers ledger transaction data to the journal. 
C) involves transferring all debits and credits on a journal page to the trial balance. 
D) provides a chronological record of transactions. 
A) transfers journal entries to ledger accounts. 
B) transfers ledger transaction data to the journal. 
C) involves transferring all debits and credits on a journal page to the trial balance. 
D) provides a chronological record of transactions.

Question 17

Customarily, a trial balance is prepared

Accepted Answer

A) at the end of each day. 
B) after each journal entry is posted. 
C) at the end of an accounting period. 
D) only at the inception of the business. 
A) at the end of each day. 
B) after each journal entry is posted. 
C) at the end of an accounting period. 
D) only at the inception of the business.

Question 18

On March 1, 2017, Freeze Company hires a new employee who will start to work on March 6. The employee will be paid on the last day of each month. Should a journal entry be made on March 6? Why or why not?

Accepted Answer

A) Yes, the company is now obligated to pay the employee, thus that event must be recorded. 
B) No, hiring an employee is an important event; however it is not an economic event that should be recorded. 
C) Yes, failure to record the event would cause the financial statements to be misleading. 
D) No, the financial position of the company has been changed, however, the dollar amount of the transaction is not yet known. 
A) Yes, the company is now obligated to pay the employee, thus that event must be recorded. 
B) No, hiring an employee is an important event; however it is not an economic event that should be recorded. 
C) Yes, failure to record the event would cause the financial statements to be misleading. 
D) No, the financial position of the company has been changed, however, the dollar amount of the transaction is not yet known.

Question 19

Equipment costing $20,000 is purchased by paying $5,000 cash and signing a note payable for the remainder. The journal entry should include a

Accepted Answer

A) credit to Notes Payable. 
B) debit to Cash. 
C) credit to Notes Receivable. 
D) credit to Equipment. 
A) credit to Notes Payable. 
B) debit to Cash. 
C) credit to Notes Receivable. 
D) credit to Equipment.

Question 20

When a corporation distributes a dividend the

Accepted Answer

A) most common form of distribution is a cash dividend. 
B) Dividends account will be increased with a credit. 
C) Retained Earnings account will be directly increased with a debit. 
D) Dividends account will be decreased with a debit. 
A) most common form of distribution is a cash dividend. 
B) Dividends account will be increased with a credit. 
C) Retained Earnings account will be directly increased with a debit. 
D) Dividends account will be decreased with a debit.

Exam 3: The Accounting Information System

Liabilities are increased with debits and decreased with credits.

Which account below is not a subdivision of stockholders' equity?

During January 2017, its first month of operation, Osborn Enterprises earned net income of $6,800 and paid dividends to the owners of $2,000. At January 31, the balance in Retained Earnings will be

Debits

Collection on an account receivable will increase both cash and accounts receivable.

The basic format of a journal would not include a(n)

Unearned Service Revenue is classified as a liability on the balance sheet.

A trial balance is prepared at the beginning of an accounting period.

A revenue generally

Transactions are recorded in alphabetical order in a journal.

Equipment costing $20,000 is purchased by paying $5,000 cash and signing a note payable for the remainder. The journal entry should include a

On June 1, 2017, England Inc. reported a cash balance of $42,000. During June, England made deposits of $16,000 and made disbursements totaling $48,000. What is the cash balance at the end of June?

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

An accounting record that includes a list of accounts and their balances at a given time is called a

Which statement about an account is true?

Posting

Customarily, a trial balance is prepared

On March 1, 2017, Freeze Company hires a new employee who will start to work on March 6. The employee will be paid on the last day of each month. Should a journal entry be made on March 6? Why or why not?

Equipment costing $20,000 is purchased by paying $5,000 cash and signing a note payable for the remainder. The journal entry should include a

When a corporation distributes a dividend the

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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