Question 1

An expense

Accepted Answer

A) decreases assets and liabilities. 
B) decreases shareholders' equity. 
C) has no effect on shareholders' equity. 
D) increases assets and decreases shareholder' equity. 
A) decreases assets and liabilities. 
B) decreases shareholders' equity. 
C) has no effect on shareholders' equity. 
D) increases assets and decreases shareholder' equity.

Question 2

When an asset increases which of the following does not occur:

Accepted Answer

A) decrease in another asset 
B) increase in revenue 
C) increase in common shares 
D) decrease in a liability 
A) decrease in another asset 
B) increase in revenue 
C) increase in common shares 
D) decrease in a liability

Question 3

A list of accounts and their account numbers is called the chart of accounts.

Accepted Answer

A) True 
 B)False

Question 4

The Dividends Declared account

Accepted Answer

A) appears on the statement of income along with the expenses of the business. 
B) must show transactions every accounting period. 
C) is increased with debits and decreased with credits. 
D) is not a proper subdivision of shareholders' equity. 
A) appears on the statement of income along with the expenses of the business. 
B) must show transactions every accounting period. 
C) is increased with debits and decreased with credits. 
D) is not a proper subdivision of shareholders' equity.

Question 5

A simple journal entry affects

Accepted Answer

A) one account. 
B) two accounts. 
C) two or more accounts. 
D) three accounts. 
A) one account. 
B) two accounts. 
C) two or more accounts. 
D) three accounts.

Question 6

If a journal entry is posted twice, this will be discovered by preparing a trial balance.

Accepted Answer

A) True 
 B)False

Question 7

A paid income tax instalment

Accepted Answer

A) increases assets and shareholders' equity. 
B) decreases assets and shareholders' equity. 
C) increases assets and decreases shareholders' equity. 
D) decreases assets and increases shareholders' equity. 
A) increases assets and shareholders' equity. 
B) decreases assets and shareholders' equity. 
C) increases assets and decreases shareholders' equity. 
D) decreases assets and increases shareholders' equity.

Question 8

Which account below is not a subdivision of shareholders' equity?

Accepted Answer

A) Dividends Declared 
B) Revenues 
C) Expenses 
D) Liabilities 
A) Dividends Declared 
B) Revenues 
C) Expenses 
D) Liabilities

Question 9

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

Accepted Answer

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

Question 10

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

Accepted Answer

A) Buildings 
B) Insurance Expense 
C) Dividends Declared 
D) Service Revenue 
A) Buildings 
B) Insurance Expense 
C) Dividends Declared 
D) Service Revenue

Question 11

A credit to an asset account indicates a(n)

Accepted Answer

A) error. 
B) credit was made to a liability account. 
C) decrease in the asset. 
D) increase in the asset. 
A) error. 
B) credit was made to a liability account. 
C) decrease in the asset. 
D) increase in the asset.

Question 12

Deferred revenues are classified as

Accepted Answer

A) assets on the statement of financial position. 
B) liaiblities on the statement of financial position. 
C) shareholders' equity on the statement of financial position. 
D) revenue on the statement of income. 
A) assets on the statement of financial position. 
B) liaiblities on the statement of financial position. 
C) shareholders' equity on the statement of financial position. 
D) revenue on the statement of income.

Question 13

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 14

The chart of accounts begins with

Accepted Answer

A) asset accounts. 
B) liability accounts. 
C) revenue accounts. 
D) expense accounts. 
A) asset accounts. 
B) liability accounts. 
C) revenue accounts. 
D) expense accounts.

Question 15

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 16

When a corporation pays a dividend, the

Accepted Answer

A) Cash account will be increased with a debit. 
B) Dividends Declared account will be increased with a credit. 
C) Retained Earnings account will be directly increased with a debit. 
D) Dividends Declared account will be increased with a debit. 
A) Cash account will be increased with a debit. 
B) Dividends Declared account will be increased with a credit. 
C) Retained Earnings account will be directly increased with a debit. 
D) Dividends Declared account will be increased with a debit.

Question 17

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 18

In recording accounting transactions, evidence that a transaction has taken place is obtained from

Accepted Answer

A) source documents. 
B) the bank. 
C) the public relations department. 
D) the chart of accounts. 
A) source documents. 
B) the bank. 
C) the public relations department. 
D) the chart of accounts.

Question 19

Cash received from a customer in advance of work being performed or goods provided is recorded as revenue.

Accepted Answer

A) True 
 B)False

Question 20

A $50,000 machine is purchased by paying $35,000 cash and signing a bank loan payable for the balance.The journal entry should include a

Accepted Answer

A) credit to Bank Loan Payable. 
B) debit to Cash. 
C) credit to Accounts Receivable. 
D) credit to Machinery. 
A) credit to Bank Loan Payable. 
B) debit to Cash. 
C) credit to Accounts Receivable. 
D) credit to Machinery.

An expense

When an asset increases which of the following does not occur:

A list of accounts and their account numbers is called the chart of accounts.

The Dividends Declared account

A simple journal entry affects

If a journal entry is posted twice, this will be discovered by preparing a trial balance.

A paid income tax instalment

Which account below is not a subdivision of shareholders' equity?

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

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

A credit to an asset account indicates a(n)

Deferred revenues are classified as

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

The chart of accounts begins with

A complete journal entry does not show

When a corporation pays a dividend, the

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

In recording accounting transactions, evidence that a transaction has taken place is obtained from

Cash received from a customer in advance of work being performed or goods provided is recorded as revenue.

A $50,000 machine is purchased by paying $35,000 cash and signing a bank loan payable for the balance.The journal entry should include a

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

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Exam 3: The Accounting Information System

An expense

When an asset increases which of the following does not occur:

A list of accounts and their account numbers is called the chart of accounts.

The Dividends Declared account

A simple journal entry affects

If a journal entry is posted twice, this will be discovered by preparing a trial balance.

A paid income tax instalment

Which account below is not a subdivision of shareholders' equity?

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

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

A credit to an asset account indicates a(n)

Deferred revenues are classified as

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

The chart of accounts begins with

A complete journal entry does not show

When a corporation pays a dividend, the

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

In recording accounting transactions, evidence that a transaction has taken place is obtained from

Cash received from a customer in advance of work being performed or goods provided is recorded as revenue.

A $50,000 machine is purchased by paying $35,000 cash and signing a bank loan payable for the balance.The journal entry should include a

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