Question 1

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

Question 2

Which pair of accounts follows the rules of debit and credit in the same manner?

Accepted Answer

A) Accounts Payable and Rent Expense 
B) Repair and Maintenance Expense and Bank Loan Payable 
C) Prepaid Insurance and Advertising Expense 
D) Service Revenue and Accounts Receivable 
A) Accounts Payable and Rent Expense 
B) Repair and Maintenance Expense and Bank Loan Payable 
C) Prepaid Insurance and Advertising Expense 
D) Service Revenue and Accounts Receivable

Question 3

A credit means that an account has been increased.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true?

Accepted Answer

A) Debits increase assets and increase liabilities. 
B) Credits decrease assets and decrease liabilities. 
C) Credits decrease assets and increase liabilities. 
D) Debits increase liabilities and decrease assets. 
A) Debits increase assets and increase liabilities. 
B) Credits decrease assets and decrease liabilities. 
C) Credits decrease assets and increase liabilities. 
D) Debits increase liabilities and decrease assets.

Question 5

An accountant has debited an asset account for $5,000 and credited a revenue account for $10,000.What can be done to complete the recording of the transaction?

Accepted Answer

A) Nothing further can be done. 
B) Credit a shareholders' equity account for $5,000. 
C) Debit another asset account for $5,000. 
D) Credit another asset account for $5,000. 
A) Nothing further can be done. 
B) Credit a shareholders' equity account for $5,000. 
C) Debit another asset account for $5,000. 
D) Credit another asset account for $5,000.

Question 6

A compound journal entry affects more than two accounts.

Accepted Answer

A) True 
 B)False

Question 7

Collection of an $800 accounts receivable

Accepted Answer

A) increases an asset $800; decreases a liability $800. 
B) decreases a liability $800; increases shareholders' equity $800. 
C) decreases an asset $800; decreases a liability $800. 
D) has no effect on total assets. 
A) increases an asset $800; decreases a liability $800. 
B) decreases a liability $800; increases shareholders' equity $800. 
C) decreases an asset $800; decreases a liability $800. 
D) has no effect on total assets.

Question 8

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

Accepted Answer

A) A payment of $229 to a creditor was posted as a debit to Accounts Payable and a debit of $229 to Cash. 
B) Cash received from a customer on account was posted as a debit of $400 to Cash and a credit of $400 to Accounts Payable. 
C) A payment of $75 for supplies was posted as a debit of $57 to Supplies and a credit of $57 to Cash. 
D) A transaction was not posted. 
A) A payment of $229 to a creditor was posted as a debit to Accounts Payable and a debit of $229 to Cash. 
B) Cash received from a customer on account was posted as a debit of $400 to Cash and a credit of $400 to Accounts Payable. 
C) A payment of $75 for supplies was posted as a debit of $57 to Supplies and a credit of $57 to Cash. 
D) A transaction was not posted.

Question 9

The purchase of an asset on credit

Accepted Answer

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

Question 10

A trial balance proves

Accepted Answer

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

Question 11

A credit is not the normal balance for

Accepted Answer

A) common shares. 
B) revenues. 
C) liabilities. 
D) cash. 
A) common shares. 
B) revenues. 
C) liabilities. 
D) cash.

Question 12

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 13

A T account consists of

Accepted Answer

A) a title, a debit balance, and a credit balance. 
B) a title, a left side, and a debit balance. 
C) a title, a debit side, and a credit side. 
D) a title, a right side, and a debit balance. 
A) a title, a debit balance, and a credit balance. 
B) a title, a left side, and a debit balance. 
C) a title, a debit side, and a credit side. 
D) a title, a right side, and a debit balance.

Question 14

A decrease in a liability account is recorded by a debit.

Accepted Answer

A) True 
 B)False

Question 15

Assets are decreased with a credit.

Accepted Answer

A) True 
 B)False

Question 16

The right side of an account is

Accepted Answer

A) always used to record increases. 
B) the credit side. 
C) the debit side. 
D) always used to record decreases. 
A) always used to record increases. 
B) the credit side. 
C) the debit side. 
D) always used to record decreases.

Question 17

Assets normally show

Accepted Answer

A) credit balances. 
B) debit balances. 
C) debit and credit balances. 
D) debit or credit balances. 
A) credit balances. 
B) debit balances. 
C) debit and credit balances. 
D) debit or credit balances.

Question 18

When a service has been performed, but no cash has been received, which of the following statements is true?

Accepted Answer

A) No journal entry is made. 
B) The entry includes a debit to Accounts Payable. 
C) The entry includes a credit to Deferred Revenue. 
D) The entry includes a debit to Accounts Receivable. 
A) No journal entry is made. 
B) The entry includes a debit to Accounts Payable. 
C) The entry includes a credit to Deferred Revenue. 
D) The entry includes a debit to Accounts Receivable.

Question 19

A person who wants to determine the balance of a particular account should refer to the

Accepted Answer

A) ledger. 
B) source document. 
C) chart of accounts. 
D) journal. 
A) ledger. 
B) source document. 
C) chart of accounts. 
D) journal.

Question 20

The main purpose of the trial balance is to check that debits equal credits.

Accepted Answer

A) True 
 B)False

The first step in the recording process is to

Which pair of accounts follows the rules of debit and credit in the same manner?

A credit means that an account has been increased.

Which of the following statements is true?

An accountant has debited an asset account for $5,000 and credited a revenue account for $10,000.What can be done to complete the recording of the transaction?

A compound journal entry affects more than two accounts.

Collection of an $800 accounts receivable

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

The purchase of an asset on credit

A trial balance proves

A credit is not the normal balance for

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

A T account consists of

A decrease in a liability account is recorded by a debit.

Assets are decreased with a credit.

The right side of an account is

Assets normally show

When a service has been performed, but no cash has been received, which of the following statements is true?

A person who wants to determine the balance of a particular account should refer to the

The main purpose of the trial balance is to check that debits equal credits.

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

The first step in the recording process is to

Which pair of accounts follows the rules of debit and credit in the same manner?

A credit means that an account has been increased.

Which of the following statements is true?

An accountant has debited an asset account for $5,000 and credited a revenue account for $10,000.What can be done to complete the recording of the transaction?

A compound journal entry affects more than two accounts.

Collection of an $800 accounts receivable

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

The purchase of an asset on credit

A trial balance proves

A credit is not the normal balance for

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

A T account consists of

A decrease in a liability account is recorded by a debit.

Assets are decreased with a credit.

The right side of an account is

Assets normally show

When a service has been performed, but no cash has been received, which of the following statements is true?

A person who wants to determine the balance of a particular account should refer to the

The main purpose of the trial balance is to check that debits equal credits.

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