Question 1

The normal balance of the dividend account is a credit.

Accepted Answer

A) True 
 B)False

Question 2

A chart of accounts for a business firm

Accepted Answer

A) is a graph. 
B) indicates the amount of profit or loss for the period. 
C) lists the accounts in the ledger. 
D) shows the balance of each account in the general ledger. 
A) is a graph. 
B) indicates the amount of profit or loss for the period. 
C) lists the accounts in the ledger. 
D) shows the balance of each account in the general ledger.

Question 3

When the columns of the trial balance equal each other, it means that no errors have occurred in the recording and posting the transactions.

Accepted Answer

A) True 
 B)False

Question 4

In the first month of operations, the total of the debit entries to the Cash account amounted to $3,000 and the total of the credit entries to the Cash account amounted to $1,800. The Cash account has a

Accepted Answer

A) $1,800 credit balance. 
B) $3,000 debit balance. 
C) $1,200 debit balance. 
D) $1,800 credit balance 
A) $1,800 credit balance. 
B) $3,000 debit balance. 
C) $1,200 debit balance. 
D) $1,800 credit balance

Question 5

A journal is an accounting record in which transactions are initially recorded.

Accepted Answer

A) True 
 B)False

Question 6

The usual sequence of steps in the transaction recording process is

Accepted Answer

A) journalize, analyze, post to the ledger. 
B) analyze, journalize, post to the ledger. 
C) journalize, post to the ledger, analyze. 
D) post to the ledger, journalize, analyze. 
A) journalize, analyze, post to the ledger. 
B) analyze, journalize, post to the ledger. 
C) journalize, post to the ledger, analyze. 
D) post to the ledger, journalize, analyze.

Question 7

If a revenue account is credited, the revenue account is increased.

Accepted Answer

A) True 
 B)False

Question 8

In recording an accounting transaction in a double-entry system

Accepted Answer

A) the number of debit accounts must equal the number of credit accounts. 
B) there must always be entries made on both sides of the accounting equation. 
C) the amount of the debits must equal the amount of the credits. 
D) there must only be two accounts affected by any transaction. 
A) the number of debit accounts must equal the number of credit accounts. 
B) there must always be entries made on both sides of the accounting equation. 
C) the amount of the debits must equal the amount of the credits. 
D) there must only be two accounts affected by any transaction.

Question 9

A revenue account

Accepted Answer

A) is increased by debits. 
B) is decreased by credits. 
C) has a normal balance of a debit. 
D) is increased by credits. 
A) is increased by debits. 
B) is decreased by credits. 
C) has a normal balance of a debit. 
D) is increased by credits.

Question 10

Posting is the process of proving the equality of debits and credits in the trial balance.

Accepted Answer

A) True 
 B)False

Question 11

The first step in the recording process is to

Accepted Answer

A) prepare financial statements. 
B) analyze the transaction in terms of its effect on the accounts. 
C) post to a journal. 
D) prepare a trial balance. 
A) prepare financial statements. 
B) analyze the transaction in terms of its effect on the accounts. 
C) post to a journal. 
D) prepare a trial balance.

Question 12

The right side of an account

Accepted Answer

A) is the correct side. 
B) reflects all transactions for the accounting period. 
C) shows all the balances of the accounts in the system. 
D) is the credit side. 
A) is the correct side. 
B) reflects all transactions for the accounting period. 
C) shows all the balances of the accounts in the system. 
D) is the credit side.

Question 13

Which one of the following is not a part of an account?

Accepted Answer

A) Credit side 
B) Trial balance 
C) Debit side 
D) Title 
A) Credit side 
B) Trial balance 
C) Debit side 
D) Title

Question 14

Source documents can provide evidence that a transaction has occurred.

Accepted Answer

A) True 
 B)False

Question 15

Comstock Company provided consulting services and billed the client $2,500. As a result of this event

Accepted Answer

A) assets remained unchanged. 
B) assets increased by $2,500. 
C) equity increased by $2,500 
D) Both assets and equity increased by $2,500. 
A) assets remained unchanged. 
B) assets increased by $2,500. 
C) equity increased by $2,500 
D) Both assets and equity increased by $2,500.

Question 16

Which one of the following represents the expanded basic accounting equation?

Accepted Answer

A) Assets = Liabilities + Common Stock + Dividends - Revenue - Expenses 
B) Assets + Dividends + Expenses = Liabilities + Common Stock + Revenues 
C) Assets - Liabilities - Dividends = Common Stock + Revenues - Expenses 
D) Assets = Revenues + Expenses - Liabilities 
A) Assets = Liabilities + Common Stock + Dividends - Revenue - Expenses 
B) Assets + Dividends + Expenses = Liabilities + Common Stock + Revenues 
C) Assets - Liabilities - Dividends = Common Stock + Revenues - Expenses 
D) Assets = Revenues + Expenses - Liabilities

Question 17

The recording process occurs

Accepted Answer

A) once a year. 
B) once a month. 
C) repeatedly during the accounting period. 
D) infrequently in a manual accounting system. 
A) once a year. 
B) once a month. 
C) repeatedly during the accounting period. 
D) infrequently in a manual accounting system.

Question 18

A trial balance would only help in detecting which one of the following errors?

Accepted Answer

A) A transaction that is not journalized 
B) A journal entry that is posted twice 
C) Offsetting errors made in recording the transaction 
D) A transposition error when transferring the debit side of journal entry to the ledger 
A) A transaction that is not journalized 
B) A journal entry that is posted twice 
C) Offsetting errors made in recording the transaction 
D) A transposition error when transferring the debit side of journal entry to the ledger

Question 19

Prepaid expenses are assets.

Accepted Answer

A) True 
 B)False

Question 20

A T-account is

Accepted Answer

A) a way of depicting the basic form of an account. 
B) a special account used instead of a journal. 
C) a special account used instead of a trial balance. 
D) used for accounts that have both a debit and credit balance. 
A) a way of depicting the basic form of an account. 
B) a special account used instead of a journal. 
C) a special account used instead of a trial balance. 
D) used for accounts that have both a debit and credit balance.

Exam 3: The Accounting Information System

The normal balance of the dividend account is a credit.

A chart of accounts for a business firm

When the columns of the trial balance equal each other, it means that no errors have occurred in the recording and posting the transactions.

In the first month of operations, the total of the debit entries to the Cash account amounted to $3,000 and the total of the credit entries to the Cash account amounted to $1,800. The Cash account has a

A journal is an accounting record in which transactions are initially recorded.

The usual sequence of steps in the transaction recording process is

If a revenue account is credited, the revenue account is increased.

In recording an accounting transaction in a double-entry system

A revenue account

Posting is the process of proving the equality of debits and credits in the trial balance.

The first step in the recording process is to

The right side of an account

Which one of the following is not a part of an account?

Source documents can provide evidence that a transaction has occurred.

Comstock Company provided consulting services and billed the client $2,500. As a result of this event

Which one of the following represents the expanded basic accounting equation?

The recording process occurs

A trial balance would only help in detecting which one of the following errors?

Prepaid expenses are assets.

A T-account is

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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