Question 1

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 2

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

Accepted Answer

A) True 
 B)False

Question 3

The sale of an asset on credit 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 4

An account is a part of the financial information system and is described by each one of the following except

Accepted Answer

A)  an account has a debit and credit side. 
B)  an account is a source document. 
C)  an account consists of three parts. 
D)  an account has a title. 
A)  an account has a debit and credit side. 
B)  an account is a source document. 
C)  an account consists of three parts. 
D)  an account has a title.

Question 5

If total liabilities decreased by $4,000, then

Accepted Answer

A)  stockholders' equity must have decreased by $4,000. 
B)  assets must have decreased by $4,000, or stockholders' equity must have increased by $4,000. 
C)  assets and stockholders' equity each increased by $2,000. 
D)  assets must have increased by $4,000. 
A)  stockholders' equity must have decreased by $4,000. 
B)  assets must have decreased by $4,000, or stockholders' equity must have increased by $4,000. 
C)  assets and stockholders' equity each increased by $2,000. 
D)  assets must have increased by $4,000.

Question 6

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 7

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

Accepted Answer

A)  Accumulated Depreciation-Buildings 
B)  Insurance Expense 
C)  Dividends 
D)  Notes Payable 
A)  Accumulated Depreciation-Buildings 
B)  Insurance Expense 
C)  Dividends 
D)  Notes Payable

Question 8

Robert Harder, Jr. was appointed the manager of Westbrook Properties, a recently formed company that manages residential rental properties. Maria Valdez is the accountant. She prepared a chart of accounts based on an analysis of the expenditures of the company. One of the largest expense categories is Travel and Entertainment. Mr. Harder believes that it is important to maintain a presence in the social life of the city. In this, he sharply differs from his father, Robert Harder, Sr. the elder Mr. Harder has set up Westbrook Properties in order to test his son's management skills before allowing him to manage a more lucrative commercial property business. Mr. Harder, Sr. provided the capital for Westbrook, and maintains close contact with the company. He allowed his son, however, to hire his own employees.
Mr. Harder has asked Ms. Valdez to name the Travel and Entertainment account Property Development. He hopes to deflect his father's attention away from the amount he has spent on travel and entertainment until he has proven that his methods work. When Ms. Valdez resisted, he reminded her that he, not his father, hired her. He also reminded her that she had been enthusiastic about his business plans when she was hired.
Required:
1. Who are the stakeholders in this situation?
2. Should Ms. Valdez agree to the change in the Travel and Entertainment account to Property Development? Explain.

Accepted Answer

1. The stakeholders in this situation in

Question 9

Which of the following accounts has a normal credit balance?

Accepted Answer

A)  Prepaid Rent 
B)  Notes Receivable 
C)  Rent Revenue 
D)  Rent Expense 
A)  Prepaid Rent 
B)  Notes Receivable 
C)  Rent Revenue 
D)  Rent Expense

Question 10

For the accounts listed below, indicate if the normal balance of the account is a debit or credit.

Accepted Answer

The answer of For the accounts listed below, indicate if...

Question 11

If a company has overdrawn its bank balance, then

Accepted Answer

A)  its Cash account will show a debit balance. 
B)  its Cash account will show a credit balance. 
C)  the Cash account debits will exceed the cash account credits. 
D)  it cannot be detected by observing the balance of the Cash account. 
A)  its Cash account will show a debit balance. 
B)  its Cash account will show a credit balance. 
C)  the Cash account debits will exceed the cash account credits. 
D)  it cannot be detected by observing the balance of the Cash account.

Question 12

Unearned Service Revenue is classified as a liability on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

During January 2014, its first month of operation, Osborn Enterprises earned net income of $1,700 and paid dividends to the owners of $500. At January 31, the balance in Retained Earnings will be

Accepted Answer

A)  $0. 
B)  $1,700 credit. 
C)  $1,200 credit. 
D)  $500 debit. 
A)  $0. 
B)  $1,700 credit. 
C)  $1,200 credit. 
D)  $500 debit.

Question 14

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 15

A paid dividend

Accepted Answer

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

Question 16

For a T account, an account balance is the difference in total dollars between total debit amounts and total credit amounts.

Accepted Answer

A) True 
 B)False

Question 17

Receiving payment of a portion of an accounts receivable will

Accepted Answer

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

Question 18

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 19

During a study session, a classmate states that it is not necessary to make journal entries and then post them to the ledger. She states that it is sufficient to analyze the transaction and simply record the information in T-accounts.
What is your response to this statement? Be brief, yet concise.

Accepted Answer

You have a very good point regarding the

Question 20

All of the following are significant contributions that the journal makes to the recording process except the journal

Accepted Answer

A)  discloses the complete effect of a transaction in one place. 
B)  helps prevent or locate errors because debits and credits can be readily compared. 
C)  keeps complete information about changes in a specific account balance in one place. 
D)  provides a chronological record of transactions. 
A)  discloses the complete effect of a transaction in one place. 
B)  helps prevent or locate errors because debits and credits can be readily compared. 
C)  keeps complete information about changes in a specific account balance in one place. 
D)  provides a chronological record of transactions.

If an individual asset is increased, then

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

The sale of an asset on credit for what it cost

An account is a part of the financial information system and is described by each one of the following except

If total liabilities decreased by $4,000, then

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

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

Which of the following accounts has a normal credit balance?

For the accounts listed below, indicate if the normal balance of the account is a debit or credit.

If a company has overdrawn its bank balance, then

Unearned Service Revenue is classified as a liability on the balance sheet.

During January 2014, its first month of operation, Osborn Enterprises earned net income of $1,700 and paid dividends to the owners of $500. At January 31, the balance in Retained Earnings will be

A credit to a liability account

A paid dividend

For a T account, an account balance is the difference in total dollars between total debit amounts and total credit amounts.

Receiving payment of a portion of an accounts receivable will

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

During a study session, a classmate states that it is not necessary to make journal entries and then post them to the ledger. She states that it is sufficient to analyze the transaction and simply record the information in T-accounts. What is your response to this statement? Be brief, yet concise.

All of the following are significant contributions that the journal makes to the recording process except the journal

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 and Acquisitions in Accounting

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Exam 3: The Accounting Information System

If an individual asset is increased, then

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

The sale of an asset on credit for what it cost

An account is a part of the financial information system and is described by each one of the following except

If total liabilities decreased by $4,000, then

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

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

Which of the following accounts has a normal credit balance?

For the accounts listed below, indicate if the normal balance of the account is a debit or credit.

If a company has overdrawn its bank balance, then

Unearned Service Revenue is classified as a liability on the balance sheet.

During January 2014, its first month of operation, Osborn Enterprises earned net income of $1,700 and paid dividends to the owners of $500. At January 31, the balance in Retained Earnings will be

A credit to a liability account

A paid dividend

For a T account, an account balance is the difference in total dollars between total debit amounts and total credit amounts.

Receiving payment of a portion of an accounts receivable will

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

During a study session, a classmate states that it is not necessary to make journal entries and then post them to the ledger. She states that it is sufficient to analyze the transaction and simply record the information in T-accounts. What is your response to this statement? Be brief, yet concise.

All of the following are significant contributions that the journal makes to the recording process except the journal

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 and Acquisitions in Accounting

Filters