Question 1

If services are performed on credit, then

Accepted Answer

A) assets will decrease. 
B) liabilities will increase. 
C) shareholders' equity will increase. 
D) liabilities will decrease. 
A) assets will decrease. 
B) liabilities will increase. 
C) shareholders' equity will increase. 
D) liabilities will decrease. C

Question 2

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) the debit side of a transaction is posted incorrectly 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) the debit side of a transaction is posted incorrectly to the ledger D

Question 3

The purpose of the ledger is to

Accepted Answer

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

Question 4

A journal provides

Accepted Answer

A) the balances for each account. 
B) information about a transaction in several different places. 
C) a list of all accounts used in the business. 
D) a chronological record of transactions. 
A) the balances for each account. 
B) information about a transaction in several different places. 
C) a list of all accounts used in the business. 
D) a chronological record of transactions.

Question 5

Source documents can provide evidence that a transaction has occurred.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following journal entries is recorded correctly in the basic format (ignoring explanations)?

Accepted Answer

The answer of Which of the following journal entries is...

Question 7

The usual ordering of accounts in the general ledger is

Accepted Answer

A) assets, liabilities, shareholders' equity, revenues, and expenses. 
B) assets, liabilities, shareholders' equity, expenses, and revenues. 
C) liabilities, assets, shareholders' equity, revenues, and expenses. 
D) shareholders' equity, assets, liabilities, expenses, and revenues. 
A) assets, liabilities, shareholders' equity, revenues, and expenses. 
B) assets, liabilities, shareholders' equity, expenses, and revenues. 
C) liabilities, assets, shareholders' equity, revenues, and expenses. 
D) shareholders' equity, assets, liabilities, expenses, and revenues.

Question 8

Which of the following statements is not true?

Accepted Answer

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

Question 9

When a company receives a utility bill but will not pay it right away, it should

Accepted Answer

A) debit Utilities Expense and credit Accounts Receivable. 
B) debit Utilities Expense and credit Accounts Payable. 
C) debit Accounts Payable and credit Utilities Expense. 
D) make no entry until the bill is paid. 
A) debit Utilities Expense and credit Accounts Receivable. 
B) debit Utilities Expense and credit Accounts Payable. 
C) debit Accounts Payable and credit Utilities Expense. 
D) make no entry until the bill is paid.

Question 10

If total assets are increased, there must be a corresponding

Accepted Answer

A) increase in liabilities only. 
B) increase in shareholders' equity only. 
C) increase in liabilities and decrease in shareholders' equity. 
D) increase in liabilities and/or increase in shareholders' equity. 
A) increase in liabilities only. 
B) increase in shareholders' equity only. 
C) increase in liabilities and decrease in shareholders' equity. 
D) increase in liabilities and/or increase in shareholders' equity.

Question 11

The sequence of steps in the transaction recording process is

Accepted Answer

A) journal $\rightarrow$ analyze $\rightarrow$ ledger. 
B) analyze $\rightarrow$ journal $\rightarrow$ ledger. 
C) journal $\rightarrow$ ledger $\rightarrow$ analyze. 
D) ledger $\rightarrow$ journal $\rightarrow$ analyze. 
A) journal $\rightarrow$ analyze $\rightarrow$ ledger. 
B) analyze $\rightarrow$ journal $\rightarrow$ ledger. 
C) journal $\rightarrow$ ledger $\rightarrow$ analyze. 
D) ledger $\rightarrow$ journal $\rightarrow$ analyze.

Question 12

A T account is

Accepted Answer

A) a way of illustrating the basic form of an account. 
B) a special account used to record only debits. 
C) a special account used to record only credits. 
D) the actual account form used in real accounting systems. 
A) a way of illustrating the basic form of an account. 
B) a special account used to record only debits. 
C) a special account used to record only credits. 
D) the actual account form used in real accounting systems.

Question 13

After transaction information has been recorded in the journal, it is transferred to the

Accepted Answer

A) chart of accounts. 
B) statement of income. 
C) book of original entry. 
D) ledger. 
A) chart of accounts. 
B) statement of income. 
C) book of original entry. 
D) ledger.

Question 14

Which of the following is not true of the terms debit and credit?

Accepted Answer

A) They can be abbreviated as Dr.and Cr. 
B) They can be interpreted to mean increase and decrease. 
C) They can be used to describe the balance of an account. 
D) They can be interpreted to mean left and right. 
A) They can be abbreviated as Dr.and Cr. 
B) They can be interpreted to mean increase and decrease. 
C) They can be used to describe the balance of an account. 
D) They can be interpreted to mean left and right.

Question 15

The left side of a T account is the

Accepted Answer

A) credit side. 
B) debit side. 
C) description of the account. 
D) balance of the account. 
A) credit side. 
B) debit side. 
C) description of the account. 
D) balance of the account.

Question 16

An increase in the Dividends Declared account will result in

Accepted Answer

A) an increase in the Retained Earnings account. 
B) an increase in expenses. 
C) a decrease in the Retained Earnings account. 
D) a decrease in expenses. 
A) an increase in the Retained Earnings account. 
B) an increase in expenses. 
C) a decrease in the Retained Earnings account. 
D) a decrease in expenses.

Question 17

An individual accounting record for a specific asset, liability or shareholders' equity item is called an account.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) in at least two different accounts. 
B) in a T account. 
C) first as a revenue and then as an expense. 
D) twice. 
A) in at least two different accounts. 
B) in a T account. 
C) first as a revenue and then as an expense. 
D) twice.

Question 19

An individual accounting record of increases and decreases in a specific asset, liability, or shareholders' equity item is called a(n)

Accepted Answer

A) single-entry accounting system. 
B) accounting transaction. 
C) account. 
D) normal balance. 
A) single-entry accounting system. 
B) accounting transaction. 
C) account. 
D) normal balance.

Question 20

If expenses are paid in cash, then

Accepted Answer

A) assets will increase. 
B) liabilities will decrease. 
C) shareholders' equity will increase. 
D) assets will decrease. 
A) assets will increase. 
B) liabilities will decrease. 
C) shareholders' equity will increase. 
D) assets will decrease.

If services are performed on credit, then

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

The purpose of the ledger is to

A journal provides

Source documents can provide evidence that a transaction has occurred.

Which of the following journal entries is recorded correctly in the basic format (ignoring explanations)?

The usual ordering of accounts in the general ledger is

Which of the following statements is not true?

When a company receives a utility bill but will not pay it right away, it should

If total assets are increased, there must be a corresponding

The sequence of steps in the transaction recording process is

A T account is

After transaction information has been recorded in the journal, it is transferred to the

Which of the following is not true of the terms debit and credit?

The left side of a T account is the

An increase in the Dividends Declared account will result in

An individual accounting record for a specific asset, liability or shareholders' equity item is called an account.

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

An individual accounting record of increases and decreases in a specific asset, liability, or shareholders' equity item is called a(n)

If expenses are paid in cash, then

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters

Exam 3: The Accounting Information System

If services are performed on credit, then

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

The purpose of the ledger is to

A journal provides

Source documents can provide evidence that a transaction has occurred.

Which of the following journal entries is recorded correctly in the basic format (ignoring explanations)?

The usual ordering of accounts in the general ledger is

Which of the following statements is not true?

When a company receives a utility bill but will not pay it right away, it should

If total assets are increased, there must be a corresponding

The sequence of steps in the transaction recording process is

A T account is

After transaction information has been recorded in the journal, it is transferred to the

Which of the following is not true of the terms debit and credit?

The left side of a T account is the

An increase in the Dividends Declared account will result in

An individual accounting record for a specific asset, liability or shareholders' equity item is called an account.

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

An individual accounting record of increases and decreases in a specific asset, liability, or shareholders' equity item is called a(n)

If expenses are paid in cash, then

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters