Question 1

The normal balance of any account is the

Accepted Answer

A) left side. 
B) right side. 
C) side which increases that account. 
D) side which decreases that account. 
A) left side. 
B) right side. 
C) side which increases that account. 
D) side which decreases that account.

Question 2

The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

Accepted Answer

A) True 
 B)False

Question 3

Which statement is incorrect?

Accepted Answer

A) Dividends represent a distribution by a corporation to its stockholders. 
B) Dividends are shown on the income statement. 
C) Dividends reduce stockholders' equity, thus the Dividends account increases on the left side. 
D) The Dividends account has a normal debit balance. 
A) Dividends represent a distribution by a corporation to its stockholders. 
B) Dividends are shown on the income statement. 
C) Dividends reduce stockholders' equity, thus the Dividends account increases on the left side. 
D) The Dividends account has a normal debit balance.

Question 4

The name given to entering transaction data in the journal is

Accepted Answer

A) chronicling. 
B) listing. 
C) posting. 
D) journalizing. 
A) chronicling. 
B) listing. 
C) posting. 
D) journalizing.

Question 5

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

Accepted Answer

A) no errors have been made. 
B) no errors can be discovered. 
C) that all accounts reflect correct balances. 
D) the mathematical equality of the accounting equation. 
A) no errors have been made. 
B) no errors can be discovered. 
C) that all accounts reflect correct balances. 
D) the mathematical equality of the accounting equation.

Question 6

Which of the following errors, each considered individually, would cause the trial balance to be out of balance?

Accepted Answer

A) A payment of $148 to a creditor was posted as a debit to Accounts Payable and a debit of $148 to Cash. 
B) Cash of $530 received from a customer on account was posted as a debit of $350 to Cash and as a credit of $350 to Accounts Payable. 
C) A payment of $59 for supplies was posted as a debit of $95 to Supplies and a credit of $95 to Cash. 
D) A transaction was not posted. 
A) A payment of $148 to a creditor was posted as a debit to Accounts Payable and a debit of $148 to Cash. 
B) Cash of $530 received from a customer on account was posted as a debit of $350 to Cash and as a credit of $350 to Accounts Payable. 
C) A payment of $59 for supplies was posted as a debit of $95 to Supplies and a credit of $95 to Cash. 
D) A transaction was not posted.

Question 7

A trial balance

Accepted Answer

A) is a list of accounts with their balances at a given point in time. 
B) will not balance if a correct journal entry is posted twice. 
C) will tell you if a transaction is not posted at all. 
D) proves the factual accuracy of journalized transactions. 
A) is a list of accounts with their balances at a given point in time. 
B) will not balance if a correct journal entry is posted twice. 
C) will tell you if a transaction is not posted at all. 
D) proves the factual accuracy of journalized transactions.

Question 8

Operating activities are the types of activities the company performs to generate profits.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not part of the recording process?

Accepted Answer

A) Analyzing transactions 
B) Preparing a trial balance 
C) Entering transactions in a journal 
D) Posting journal entries 
A) Analyzing transactions 
B) Preparing a trial balance 
C) Entering transactions in a journal 
D) Posting journal entries

Question 10

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

Accepted Answer

A) True 
 B)False

Question 11

In the first month of operations, the total of the debit entries to the Cash account amounted to $7,000 and the total of the credit entries to the Cash account amounted to $4,000. The Cash account has a

Accepted Answer

A) $4,000 credit balance. 
B) $7,000 debit balance. 
C) $3,000 debit balance. 
D) $3,000 credit balance. 
A) $4,000 credit balance. 
B) $7,000 debit balance. 
C) $3,000 debit balance. 
D) $3,000 credit balance.

Question 12

Which statement is incorrect?

Accepted Answer

A) A chart of accounts is a listing of accounts used by a business. 
B) New accounts can be added to the chart of accounts. 
C) Stockholders' Equity is an account that is included in the chart of accounts. 
D) Account titles for the chart of accounts are used in general journal entries. 
A) A chart of accounts is a listing of accounts used by a business. 
B) New accounts can be added to the chart of accounts. 
C) Stockholders' Equity is an account that is included in the chart of accounts. 
D) Account titles for the chart of accounts are used in general journal entries.

Question 13

A ledger

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 14

Which of the following is not an example of a source document that provides evidence of a transaction?

Accepted Answer

A) A cancelled check 
B) A sales slip 
C) A trial balance 
D) A cash register tape 
A) A cancelled check 
B) A sales slip 
C) A trial balance 
D) A cash register tape

Question 15

The accountant for Mega Stores, Inc. should have recorded the following correct entry:   Instead, he misunderstood the transaction and recorded an incorrect entry. Which of the following wrong entries pertaining to this transaction could have been detected as erroneous when using a trial balance?

Accepted Answer

The answer of The accountant for Mega Stores, Inc. should...

Question 16

A payment of a portion of an accounts payable will

Accepted Answer

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

Question 17

Under U.S. GAAP

Accepted Answer

A) currency signs are generally used in the journal, ledger, trial balance, and financial statements. 
B) Share Capital - Ordinary is referred to as Retained Earnings. 
C) the statement of financial position is often called the statement of changes in financial position. 
D) the rules of debits and credits, and the steps in the recording process are the same as under IFRS (International Financial Reporting Standards). 
A) currency signs are generally used in the journal, ledger, trial balance, and financial statements. 
B) Share Capital - Ordinary is referred to as Retained Earnings. 
C) the statement of financial position is often called the statement of changes in financial position. 
D) the rules of debits and credits, and the steps in the recording process are the same as under IFRS (International Financial Reporting Standards).

Question 18

A credit to a liability account

Accepted Answer

A) indicates an increase in the amount owed to creditors. 
B) indicates a decrease in the amount owed to creditors. 
C) is an error. 
D) must be accompanied by a debit to an asset account. 
A) indicates an increase in the amount owed to creditors. 
B) indicates a decrease in the amount owed to creditors. 
C) is an error. 
D) must be accompanied by a debit to an asset account.

Question 19

A decrease in a liability is recorded by a debit.

Accepted Answer

A) True 
 B)False

Question 20

During January 2017, Carey Services Inc. paid a cash dividends of $2,000. This transaction

Accepted Answer

A) reduces stockholders' equity by $2,000. 
B) increases stockholders' equity by $2,000. 
C) reduces net income by $2,000. 
D) increases expenses by $2,000. 
A) reduces stockholders' equity by $2,000. 
B) increases stockholders' equity by $2,000. 
C) reduces net income by $2,000. 
D) increases expenses by $2,000.

Exam 3: The Accounting Information System

The normal balance of any account is the

The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

Which statement is incorrect?

The name given to entering transaction data in the journal is

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

Which of the following errors, each considered individually, would cause the trial balance to be out of balance?

A trial balance

Operating activities are the types of activities the company performs to generate profits.

Which of the following is not part of the recording process?

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

In the first month of operations, the total of the debit entries to the Cash account amounted to $7,000 and the total of the credit entries to the Cash account amounted to $4,000. The Cash account has a

Which statement is incorrect?

A ledger

Which of the following is not an example of a source document that provides evidence of a transaction?

The accountant for Mega Stores, Inc. should have recorded the following correct entry: Instead, he misunderstood the transaction and recorded an incorrect entry. Which of the following wrong entries pertaining to this transaction could have been detected as erroneous when using a trial balance?

A payment of a portion of an accounts payable will

Under U.S. GAAP

A credit to a liability account

A decrease in a liability is recorded by a debit.

During January 2017, Carey Services Inc. paid a cash dividends of $2,000. This transaction

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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