Question 1

Which of the following is true?

Accepted Answer

A) Transaction analysis is completely different under IFRS and GAAP. 
B) Most transaction are recorded differently under IFRS and GAAP. 
C) Transaction analysis is the same under IFRS and GAAP, but some transactions are recorded differently. 
D) All transaction are recorded the same under IFRS and GAAP. 
A) Transaction analysis is completely different under IFRS and GAAP. 
B) Most transaction are recorded differently under IFRS and GAAP. 
C) Transaction analysis is the same under IFRS and GAAP, but some transactions are recorded differently. 
D) All transaction are recorded the same under IFRS and GAAP.

Question 2

A credit balance in a liability account indicates that an error in recording has occurred.

Accepted Answer

A) True 
 B)False

Question 3

An increase in an asset is recorded by a debit.

Accepted Answer

A) True 
 B)False

Question 4

An increase in an asset is recorded by a debit.

Accepted Answer

A) True 
 B)False

Question 5

A list of accounts and their balances at a given time is called a(n)

Accepted Answer

A) journal. 
B) posting. 
C) trial balance. 
D) income statement. 
A) journal. 
B) posting. 
C) trial balance. 
D) income statement.

Question 6

Receiving payment of a portion of an accounts receivable will

Accepted Answer

A) not affect total assets. 
B) increase liabilities. 
C) increase stockholders' equity. 
D) decrease net income. 
A) not affect total assets. 
B) increase liabilities. 
C) increase stockholders' equity. 
D) decrease net income.

Question 7

At December 1, 2017, Orear Company's Accounts Receivable balance was $16,800. During December, Orear had credit sales of $45,000 and collected accounts receivable of $36,000. At December 31, 2017, the Accounts Receivable balance is

Accepted Answer

A) $16,800 debit 
B) $25,800 debit 
C) $61,800 debit 
D) $25,800 credit 
A) $16,800 debit 
B) $25,800 debit 
C) $61,800 debit 
D) $25,800 credit

Question 8

Which of the following accounts probably would be listed before the others in a chart of accounts?

Accepted Answer

A) Accumulated Depreciation-Buildings 
B) Insurance Expense 
C) Dividends 
D) Notes Payable 
A) Accumulated Depreciation-Buildings 
B) Insurance Expense 
C) Dividends 
D) Notes Payable

Question 9

All business transactions must be entered first in the general ledger.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is not true?

Accepted Answer

A) Expenses increase stockholders' equity. 
B) Expenses have normal debit balances. 
C) Expenses decrease stockholders' equity. 
D) Expenses are a negative factor in the computation of net income. 
A) Expenses increase stockholders' equity. 
B) Expenses have normal debit balances. 
C) Expenses decrease stockholders' equity. 
D) Expenses are a negative factor in the computation of net income.

Question 11

Which of the following accounts has a normal credit balance?

Accepted Answer

A) Prepaid Rent 
B) Notes Receivable 
C) Rent Revenue 
D) Rent Expense 
A) Prepaid Rent 
B) Notes Receivable 
C) Rent Revenue 
D) Rent Expense

Question 12

Howard Company had a transaction that caused a $5,000 increase in both assets and total liabilities. This transaction could have been a(n)

Accepted Answer

A) purchase of office equipment for $12,000, paying $7,000 cash and issuing a note payable for the balance. 
B) investment of $5,000 cash in the business by the stockholders. 
C) purchase of office equipment for $5,000 cash. 
D) repayment of a $5,000 bank loan. 
A) purchase of office equipment for $12,000, paying $7,000 cash and issuing a note payable for the balance. 
B) investment of $5,000 cash in the business by the stockholders. 
C) purchase of office equipment for $5,000 cash. 
D) repayment of a $5,000 bank loan.

Question 13

After a business transaction has been analyzed and entered in the journal, the next step in the recording process is to transfer the information to

Accepted Answer

A) the company's bank. 
B) stockholders' equity. 
C) ledger accounts. 
D) financial statements. 
A) the company's bank. 
B) stockholders' equity. 
C) ledger accounts. 
D) financial statements.

Question 14

A complete journal entry does not show

Accepted Answer

A) the date of the transaction. 
B) the new balance in the accounts affected by the transaction. 
C) a brief explanation of the transaction. 
D) the accounts and amounts to be debited and credited. 
A) the date of the transaction. 
B) the new balance in the accounts affected by the transaction. 
C) a brief explanation of the transaction. 
D) the accounts and amounts to be debited and credited.

Question 15

The basic form of a journal entry has the

Accepted Answer

A) debit account entered first and indented. 
B) credit account entered first and indented. 
C) debit account entered first at the extreme left margin. 
D) credit account entered first at the extreme left margin. 
A) debit account entered first and indented. 
B) credit account entered first and indented. 
C) debit account entered first at the extreme left margin. 
D) credit account entered first at the extreme left margin.

Question 16

The usual sequence of steps in the recording process is to

Accepted Answer

A) analyze each transaction, enter the transaction in the journal, and transfer the information to the ledger accounts. 
B) analyze each transaction, enter the transaction in the ledger, and transfer the information to the journal. 
C) analyze each transaction, enter the transaction in the book of accounts, and transfer the information to the journal. 
D) analyze each transaction, enter the transaction in the book of original entry, and transfer the information to the journal. 
A) analyze each transaction, enter the transaction in the journal, and transfer the information to the ledger accounts. 
B) analyze each transaction, enter the transaction in the ledger, and transfer the information to the journal. 
C) analyze each transaction, enter the transaction in the book of accounts, and transfer the information to the journal. 
D) analyze each transaction, enter the transaction in the book of original entry, and transfer the information to the journal.

Question 17

Assets are decreased with a credit.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following correctly identifies normal balances of accounts? a. $\begin{array}{ll}
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Common Stock } & \text { Credit } \
\text { Revenues } & \text { Debit } \
\text { Expenses } & \text { Credit }
\end{array}$

b. $\begin{array}{ll}
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Common Stock } & \text { Credit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Credit }
\end{array}$

c. $\begin{array}{ll}
\text { Assets } & \text { Credit } \
\text { Liabilities } & \text { Debit } \
\text { Common Stock } & \text { Debit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Debit }
\end{array}$

d. $\begin{array}{ll}
\text { Assets } & \text { Debit } \
\text { Liabilities } & \text { Credit } \
\text { Common Stock } & \text { Credit } \
\text { Revenues } & \text { Credit } \
\text { Expenses } & \text { Debit }
\end{array}$

Accepted Answer

The answer of Which of the following correctly identifies normal...

Question 19

Transactions in a journal are initially recorded in

Accepted Answer

A) account number order. 
B) dollar amount order. 
C) alphabetical order. 
D) chronological order. 
A) account number order. 
B) dollar amount order. 
C) alphabetical order. 
D) chronological order.

Question 20

Powers Corporation received a cash advance of $500 from a customer. As a result of this event,

Accepted Answer

A) assets increased by $500. 
B) equity increased by $500. 
C) liabilities decreased by $500. 
D) Both assets and equity increased by $500. 
A) assets increased by $500. 
B) equity increased by $500. 
C) liabilities decreased by $500. 
D) Both assets and equity increased by $500.

Exam 3: The Accounting Information System

Which of the following is true?

A credit balance in a liability account indicates that an error in recording has occurred.

An increase in an asset is recorded by a debit.

An increase in an asset is recorded by a debit.

A list of accounts and their balances at a given time is called a(n)

Receiving payment of a portion of an accounts receivable will

At December 1, 2017, Orear Company's Accounts Receivable balance was $16,800. During December, Orear had credit sales of $45,000 and collected accounts receivable of $36,000. At December 31, 2017, the Accounts Receivable balance is

Which of the following accounts probably would be listed before the others in a chart of accounts?

All business transactions must be entered first in the general ledger.

Which of the following statements is not true?

Which of the following accounts has a normal credit balance?

Howard Company had a transaction that caused a $5,000 increase in both assets and total liabilities. This transaction could have been a(n)

After a business transaction has been analyzed and entered in the journal, the next step in the recording process is to transfer the information to

A complete journal entry does not show

The basic form of a journal entry has the

The usual sequence of steps in the recording process is to

Assets are decreased with a credit.

Transactions in a journal are initially recorded in

Powers Corporation received a cash advance of $500 from a customer. As a result of this event,

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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