Question 1

Under the double-entry system, revenues must always equal expenses.

Accepted Answer

A) True 
 B)False

Question 2

Liabilities are increased with debits and decreased with credits.

Accepted Answer

A) True 
 B)False

Question 3

The purpose of the ledger is to

Accepted Answer

A) record chronologically the day's transactions. 
B) keep a record of documentation to support each transaction. 
C) keep in one place all information about changes in specific account balances. 
D) make sure that all assets, liabilities, etc., have normal balances at all times. 
A) record chronologically the day's transactions. 
B) keep a record of documentation to support each transaction. 
C) keep in one place all information about changes in specific account balances. 
D) make sure that all assets, liabilities, etc., have normal balances at all times.

Question 4

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 5

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 6

A credit means that an account has been increased.

Accepted Answer

A) True 
 B)False

Question 7

All of the following are characteristics of every accounting information system except it is a system

Accepted Answer

A) that collects transaction data. 
B) that processes transaction data. 
C) that communicates financial information to decision makers. 
D) of data storage hardware for the chart of accounts. 
A) that collects transaction data. 
B) that processes transaction data. 
C) that communicates financial information to decision makers. 
D) of data storage hardware for the chart of accounts.

Question 8

The double-entry system requires that each transaction must be recorded

Accepted Answer

A) in at least two different accounts. 
B) in two sets of books. 
C) in a journal and in a ledger. 
D) first as a revenue and then as an expense. 
A) in at least two different accounts. 
B) in two sets of books. 
C) in a journal and in a ledger. 
D) first as a revenue and then as an expense.

Question 9

A trial balance proves

Accepted Answer

A) the mathematical equality of debits and credits after the posting process. 
B) the ledger is posted correctly. 
C) that all transactions have been recorded correctly. 
D) that all transactions have been posted. 
A) the mathematical equality of debits and credits after the posting process. 
B) the ledger is posted correctly. 
C) that all transactions have been recorded correctly. 
D) that all transactions have been posted.

Question 10

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 11

Posting

Accepted Answer

A) transfers ledger transaction data to the journal. 
B) normally occurs before journalizing. 
C) accumulates the effects of journalized transactions in the individual accounts. 
D) enters transaction data in the journal. 
A) transfers ledger transaction data to the journal. 
B) normally occurs before journalizing. 
C) accumulates the effects of journalized transactions in the individual accounts. 
D) enters transaction data in the journal.

Question 12

At October 1, 2022, Metz Industries had an Accounts Payable balance of $140,000.During the month, the company made purchases on account of $100,000 and made payments on account of $160,000.At October 31, 2022, the Accounts Payable balance is

Accepted Answer

A) $140,000 debit 
B) $20,000 credit 
C) $80,000 credit 
D) $160,000 credit 
A) $140,000 debit 
B) $20,000 credit 
C) $80,000 credit 
D) $160,000 credit

Question 13

Salaries and wages payable is a type of expense.

Accepted Answer

A) True 
 B)False

Question 14

The Cash account balance of Eckert Enterprises at July 1 is $500.The total of the debit entries to the Cash account amounted to $1,500 and the total of the credit entries to the Cash account amounted to $1,500 during July.At the end of the month, 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 15

Which of the following accounts is increased with a credit?

Accepted Answer

A) Supplies Expense 
B) Supplies 
C) Sales Revenue 
D) Dividends 
A) Supplies Expense 
B) Supplies 
C) Sales Revenue 
D) Dividends

Question 16

Incurring 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 17

The procedure of transferring journal entries to the ledger accounts is called

Accepted Answer

A) journalizing. 
B) analyzing. 
C) reporting. 
D) posting. 
A) journalizing. 
B) analyzing. 
C) reporting. 
D) posting.

Question 18

The sale of an asset on account for what it cost

Accepted Answer

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

Question 19

If an individual asset is increased, then

Accepted Answer

A) there could be an equal decrease in a specific liability. 
B) there could be an equal decrease in stockholders' equity. 
C) there could be an equal decrease in another asset. 
D) None of these answer choices are correct. 
A) there could be an equal decrease in a specific liability. 
B) there could be an equal decrease in stockholders' equity. 
C) there could be an equal decrease in another asset. 
D) None of these answer choices are correct.

Question 20

Which of the following transactions has no effect on retained earnings?

Accepted Answer

A) Incurred expense 
B) Paid dividends 
C) Purchased land 
D) Earned revenue 
A) Incurred expense 
B) Paid dividends 
C) Purchased land 
D) Earned revenue

Under the double-entry system, revenues must always equal expenses.

Liabilities are increased with debits and decreased with credits.

The purpose of the ledger is to

Which of the following statements is not true?

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

A credit means that an account has been increased.

All of the following are characteristics of every accounting information system except it is a system

The double-entry system requires that each transaction must be recorded

A trial balance proves

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

Posting

At October 1, 2022, Metz Industries had an Accounts Payable balance of $140,000.During the month, the company made purchases on account of $100,000 and made payments on account of $160,000.At October 31, 2022, the Accounts Payable balance is

Salaries and wages payable is a type of expense.

The Cash account balance of Eckert Enterprises at July 1 is $500.The total of the debit entries to the Cash account amounted to $1,500 and the total of the credit entries to the Cash account amounted to $1,500 during July.At the end of the month, the Cash account has a

Which of the following accounts is increased with a credit?

Incurring an expense

The procedure of transferring journal entries to the ledger accounts is called

The sale of an asset on account for what it cost

If an individual asset is increased, then

Which of the following transactions has no effect on retained earnings?

Introduction to Financial Statements

A Further Look at Financial Statements

Accrual Accounting Concepts

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

Understanding Investments in Debt and Equity Securities

Filters

Exam 3: The Accounting Information System

Under the double-entry system, revenues must always equal expenses.

Liabilities are increased with debits and decreased with credits.

The purpose of the ledger is to

Which of the following statements is not true?

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

A credit means that an account has been increased.

All of the following are characteristics of every accounting information system except it is a system

The double-entry system requires that each transaction must be recorded

A trial balance proves

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

Posting

At October 1, 2022, Metz Industries had an Accounts Payable balance of $140,000.During the month, the company made purchases on account of $100,000 and made payments on account of $160,000.At October 31, 2022, the Accounts Payable balance is

Salaries and wages payable is a type of expense.

The Cash account balance of Eckert Enterprises at July 1 is $500.The total of the debit entries to the Cash account amounted to $1,500 and the total of the credit entries to the Cash account amounted to $1,500 during July.At the end of the month, the Cash account has a

Which of the following accounts is increased with a credit?

Incurring an expense

The procedure of transferring journal entries to the ledger accounts is called

The sale of an asset on account for what it cost

If an individual asset is increased, then

Which of the following transactions has no effect on retained earnings?

Introduction to Financial Statements

A Further Look at Financial Statements

Accrual Accounting Concepts

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

Understanding Investments in Debt and Equity Securities

Filters