Question 1

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

Accepted Answer

A)  A debit balance in the Dividends account 
B)  A credit balance in an expense account 
C)  A credit balance in a liabilities account 
D)  A credit balance in a revenue account 
A)  A debit balance in the Dividends account 
B)  A credit balance in an expense account 
C)  A credit balance in a liabilities account 
D)  A credit balance in a revenue account

Question 2

The name given to entering transaction data in the journal is

Accepted Answer

A)  chronicling. 
B)  listing. 
C)  posting. 
D)  journalizing. 
A)  chronicling. 
B)  listing. 
C)  posting. 
D)  journalizing.

Question 3

A trial balance

Accepted Answer

A)  is a list of accounts with their balances at a given point in time. 
B)  will not balance if a correct journal entry is posted twice. 
C)  will tell you if a transaction is not posted at all. 
D)  proves the factual accuracy of journalized transactions. 
A)  is a list of accounts with their balances at a given point in time. 
B)  will not balance if a correct journal entry is posted twice. 
C)  will tell you if a transaction is not posted at all. 
D)  proves the factual accuracy of journalized transactions.

Question 4

A revenue generally

Accepted Answer

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

Question 5

A trial balance is prepared at the beginning of an accounting period.

Accepted Answer

A) True 
 B)False

Question 6

Describe the accounting information system and the steps in the recording process.

Accepted Answer

The system of collecting and processing

Question 7

An accountant has debited an asset account for $800 and credited a liability account for $700. Which of the following would be an incorrect way to complete the recording of the transaction?

Accepted Answer

A)  Credit an asset account for $100. 
B)  Credit another liability account for $100. 
C)  Credit a stockholders' equity account for $100. 
D)  Debit a stockholders' equity account for $100. 
A)  Credit an asset account for $100. 
B)  Credit another liability account for $100. 
C)  Credit a stockholders' equity account for $100. 
D)  Debit a stockholders' equity account for $100.

Question 8

For the basic accounting equation to stay in balance, each transaction recorded must

Accepted Answer

A)  affect two or less accounts. 
B)  affect two or more accounts. 
C)  always affect exactly two accounts. 
D)  affect the same number of asset and liability accounts. 
A)  affect two or less accounts. 
B)  affect two or more accounts. 
C)  always affect exactly two accounts. 
D)  affect the same number of asset and liability accounts.

Question 9

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 10

These T accounts summarize the ledger of Garner Gardening Company Inc. at the end of the first month of operations, April 2014.   Instructions
(a) Prepare in the order they occurred the journal entries (including explanations) that resulted in the amounts posted to the accounts.
(b) Prepare a trial balance at April 30, 2014.

Accepted Answer

The answer of These T accounts summarize the ledger of...

Question 11

Which pair of accounts follows the rules of debit and credit in relation to increases and decreases in the same manner?

Accepted Answer

A)  Dividends Payable and Rent Expense 
B)  Utilities Expense and Notes Payable 
C)  Prepaid Insurance and Advertising Expense 
D)  Service Revenue and Equipment 
A)  Dividends Payable and Rent Expense 
B)  Utilities Expense and Notes Payable 
C)  Prepaid Insurance and Advertising Expense 
D)  Service Revenue and Equipment

Question 12

Jamal Company began the year with $84,000 in its Common Stock account and a debit balance in Retained Earnings of $36,000. During the year, the company earned net income of $18,000 and declared and paid $6,000 of dividends. In addition, the company sold additional common stock amounting to $22,000. Based on this information, what should the transaction analysis show for the ending total of all stockholders' equity accounts?

Accepted Answer

A)  $154,000 
B)  $166,000 
C)  $82,000 
D)  $110,000 
A)  $154,000 
B)  $166,000 
C)  $82,000 
D)  $110,000

Question 13

The usual ordering of accounts in the general ledger is

Accepted Answer

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

Question 14

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 15

In deciding whether the U.S. should adopt IFRS, the issue the SEC said should be considered is

Accepted Answer

A)  whether IFRS is sufficiently developed and consistent in application. 
B)  whether the IFRS is established for the benefit of investors. 
C)  the impact of a switch to IFRS on U.S. laws and regulation. 
D)  all of these answer choices are correct. 
A)  whether IFRS is sufficiently developed and consistent in application. 
B)  whether the IFRS is established for the benefit of investors. 
C)  the impact of a switch to IFRS on U.S. laws and regulation. 
D)  all of these answer choices are correct.

Question 16

Collection on an account receivable will increase both cash and accounts receivable.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The trial balance of the Gavin Company shown below does not balance.   An examination of the ledger and journal reveals the following errors:
1. Each of the above listed accounts has a normal balance per the general ledger.
2. Cash of $350 received from a customer on account was debited to Cash $530 and credited to Accounts Receivable $530.
3. Dividends of $300 paid to stockholders were posted as a credit to Dividends, $300, and a credit to Cash $300.
4. Salaries and Wages Expense of $300 was omitted from the trial balance.
5. The purchase of equipment on account for $700 was recorded as a debit to Maintenance and Repairs Expense and a credit to Accounts Payable for $700.
6. Services were performed on account for a customer, $510, for which Accounts Receivable was debited $510 and Service Revenue was credited $51.
7. A payment on account for $215 was credited to Cash for $215 and credited to Accounts Payable for $251.
Instructions
Prepare a correct trial balance.

Accepted Answer

The answer of The trial balance of the Gavin Company...

Question 19

The chart of accounts used by Norton Printing Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.

Accepted Answer

The answer of The chart of accounts used by Norton...

Question 20

The Dividends account

Accepted Answer

A)  appears on the income statement 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 stockholders' equity. 
A)  appears on the income statement 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 stockholders' equity.

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

The name given to entering transaction data in the journal is

A trial balance

A revenue generally

A trial balance is prepared at the beginning of an accounting period.

Describe the accounting information system and the steps in the recording process.

An accountant has debited an asset account for $800 and credited a liability account for $700. Which of the following would be an incorrect way to complete the recording of the transaction?

For the basic accounting equation to stay in balance, each transaction recorded must

A journal provides

Which pair of accounts follows the rules of debit and credit in relation to increases and decreases in the same manner?

The usual ordering of accounts in the general ledger is

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

In deciding whether the U.S. should adopt IFRS, the issue the SEC said should be considered is

Collection on an account receivable will increase both cash and accounts receivable.

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

The chart of accounts used by Norton Printing Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.

The Dividends account

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

Exam 3: The Accounting Information System

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

The name given to entering transaction data in the journal is

A trial balance

A revenue generally

A trial balance is prepared at the beginning of an accounting period.

Describe the accounting information system and the steps in the recording process.

An accountant has debited an asset account for $800 and credited a liability account for $700. Which of the following would be an incorrect way to complete the recording of the transaction?

For the basic accounting equation to stay in balance, each transaction recorded must

A journal provides

Which pair of accounts follows the rules of debit and credit in relation to increases and decreases in the same manner?

The usual ordering of accounts in the general ledger is

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

In deciding whether the U.S. should adopt IFRS, the issue the SEC said should be considered is

Collection on an account receivable will increase both cash and accounts receivable.

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

The chart of accounts used by Norton Printing Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.

The Dividends account

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