Question 1

If the sum of the debits and credits in a trial balance is not equal, then

Accepted Answer

A)  there is no concern because the two amounts are not meant to be equal. 
B)  the chart of accounts also does not balance. 
C)  it is safe to proceed with the preparation of financial statements. 
D)  most likely an error was made in posting journal entries to the general ledger or in preparing the trial balance. 
A)  there is no concern because the two amounts are not meant to be equal. 
B)  the chart of accounts also does not balance. 
C)  it is safe to proceed with the preparation of financial statements. 
D)  most likely an error was made in posting journal entries to the general ledger or in preparing the trial balance.

Question 2

Debit and credit would best be described as _______ terms.

Accepted Answer

A)  abnormal 
B)  increasing/decreasing 
C)  quantitative 
D)  locational 
A)  abnormal 
B)  increasing/decreasing 
C)  quantitative 
D)  locational

Question 3

An external event involves interaction between an entity and its environment.

Accepted Answer

A) True 
 B)False

Question 4

The normal balance of the Dividends account is a credit.

Accepted Answer

A) True 
 B)False

Question 5

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account.An account title may be used more than once or not at all.
-A written obligation to repay a fixed amount, with interest, at some time in the future

Accepted Answer

A) Cash 
B) Prepaid Asset 
C) Investments 
D) Taxes Payable 
E) Preferred Stock
F)Accounts Receivable
G)Land
H)Accounts Payable
I)Retained Earnings
J)Notes Receivable
K)Buildings
L)Notes Payable
M)Common Stock 
A) Cash 
B) Prepaid Asset 
C) Investments 
D) Taxes Payable 
E) Preferred Stock
F)Accounts Receivable
G)Land
H)Accounts Payable
I)Retained Earnings
J)Notes Receivable
K)Buildings
L)Notes Payable
M)Common Stock

Question 6

Identify which of the following would be recorded as external events, recorded as internal events, or not recorded.
-The company signs a contract with the marketing firm and pays a retainer.

Accepted Answer

A) Internal event 
B) External event 
C) Not recorded 
A) Internal event 
B) External event 
C) Not recorded

Question 7

A trial balance that balances provides proof that all transactions were correctly journalized and posted to the ledger.

Accepted Answer

A) True 
 B)False

Question 8

An abbreviated version of an account which is useful for analyzing the effects of business transactions is the

Accepted Answer

A)  chart of accounts 
B)  double entry system 
C)  T account 
D)  trial balance 
A)  chart of accounts 
B)  double entry system 
C)  T account 
D)  trial balance

Question 9

Each account has a normal balance.For the following list of accounts, indicate whether the normal balance of each is a debit or a credit.
-Unearned Advertising Fees

Accepted Answer

A) Debit 
B) Credit 
A) Debit 
B) Credit

Question 10

Which of the following would be a case where an event as a transaction is not supported by a source document?

Accepted Answer

A)  a purchase of inventory on credit 
B)  a cash sale 
C)  a credit sale 
D)  None of these choices 
A)  a purchase of inventory on credit 
B)  a cash sale 
C)  a credit sale 
D)  None of these choices

Question 11

A debit entry increases assets, decreases liabilities, or decreases stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 12

A cash register tape would be a source document for which of the following?

Accepted Answer

A)  recording a purchase of inventory on credit 
B)  recognizing a cash sale 
C)  recording an invoice 
D)  recording payroll 
A)  recording a purchase of inventory on credit 
B)  recognizing a cash sale 
C)  recording an invoice 
D)  recording payroll

Question 13

Payment is made for land purchased earlier on credit.For this transaction, identify the effect on the accounting equation.

Accepted Answer

A)  Assets increase and liabilities increase. 
B)  Assets increase and stockholders' equity increases. 
C)  Liabilities increase and stockholders' equity decrease. 
D)  Liabilities decrease and assets decrease. 
A)  Assets increase and liabilities increase. 
B)  Assets increase and stockholders' equity increases. 
C)  Liabilities increase and stockholders' equity decrease. 
D)  Liabilities decrease and assets decrease.

Question 14

A file or book which contains a record for all accounts used by a company, including the account balance, is called a

Accepted Answer

A)  chart of accounts 
B)  general journal 
C)  general ledger 
D)  trial balance 
A)  chart of accounts 
B)  general journal 
C)  general ledger 
D)  trial balance

Question 15

Which of the following best describes a trial balance?

Accepted Answer

A)  It is a required financial statement. 
B)  It is a financial statement that can be used in place of the income statement. 
C)  It is a numerical list of all accounts used by a company. 
D)  It is a tool used to prove the equality of debits and credits in the general ledger. 
A)  It is a required financial statement. 
B)  It is a financial statement that can be used in place of the income statement. 
C)  It is a numerical list of all accounts used by a company. 
D)  It is a tool used to prove the equality of debits and credits in the general ledger.

Question 16

The accounting equation must balance after each transaction.

Accepted Answer

A) True 
 B)False

Question 17

Not all recognizable events are supported by a standard source document.

Accepted Answer

A) True 
 B)False

Question 18

Payment is made for an electric bill which was received and recorded earlier.For this transaction, identify the effect on the accounting equation.

Accepted Answer

A)  Assets increase and liabilities increase. 
B)  Assets increase and stockholders' equity increases. 
C)  Liabilities increase and stockholders' equity decreases. 
D)  Liabilities decrease and assets decrease. 
A)  Assets increase and liabilities increase. 
B)  Assets increase and stockholders' equity increases. 
C)  Liabilities increase and stockholders' equity decreases. 
D)  Liabilities decrease and assets decrease.

Question 19

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account.An account title may be used more than once or not at all.
-A plot of land held for speculation

Accepted Answer

A) Cash 
B) Prepaid Asset 
C) Investments 
D) Taxes Payable 
E) Preferred Stock
F)Accounts Receivable
G)Land
H)Accounts Payable
I)Retained Earnings
J)Notes Receivable
K)Buildings
L)Notes Payable
M)Common Stock 
A) Cash 
B) Prepaid Asset 
C) Investments 
D) Taxes Payable 
E) Preferred Stock
F)Accounts Receivable
G)Land
H)Accounts Payable
I)Retained Earnings
J)Notes Receivable
K)Buildings
L)Notes Payable
M)Common Stock

Question 20

Debit entries are used to

Accepted Answer

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

If the sum of the debits and credits in a trial balance is not equal, then

Debit and credit would best be described as _______ terms.

An external event involves interaction between an entity and its environment.

The normal balance of the Dividends account is a credit.

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account.An account title may be used more than once or not at all. -A written obligation to repay a fixed amount, with interest, at some time in the future

Identify which of the following would be recorded as external events, recorded as internal events, or not recorded. -The company signs a contract with the marketing firm and pays a retainer.

A trial balance that balances provides proof that all transactions were correctly journalized and posted to the ledger.

An abbreviated version of an account which is useful for analyzing the effects of business transactions is the

Each account has a normal balance.For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. -Unearned Advertising Fees

Which of the following would be a case where an event as a transaction is not supported by a source document?

A debit entry increases assets, decreases liabilities, or decreases stockholders' equity.

A cash register tape would be a source document for which of the following?

Payment is made for land purchased earlier on credit.For this transaction, identify the effect on the accounting equation.

A file or book which contains a record for all accounts used by a company, including the account balance, is called a

Which of the following best describes a trial balance?

The accounting equation must balance after each transaction.

Not all recognizable events are supported by a standard source document.

Payment is made for an electric bill which was received and recorded earlier.For this transaction, identify the effect on the accounting equation.

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account.An account title may be used more than once or not at all. -A plot of land held for speculation

Debit entries are used to

Accounting As a Form of Communication

Financial Statements and the Annual Report

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities, Contingencies, and the True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters

Exam 3: Processing Accounting Information

If the sum of the debits and credits in a trial balance is not equal, then

Debit and credit would best be described as _______ terms.

An external event involves interaction between an entity and its environment.

The normal balance of the Dividends account is a credit.

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account.An account title may be used more than once or not at all. -A written obligation to repay a fixed amount, with interest, at some time in the future

Identify which of the following would be recorded as external events, recorded as internal events, or not recorded. -The company signs a contract with the marketing firm and pays a retainer.

A trial balance that balances provides proof that all transactions were correctly journalized and posted to the ledger.

An abbreviated version of an account which is useful for analyzing the effects of business transactions is the

Each account has a normal balance.For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. -Unearned Advertising Fees

Which of the following would be a case where an event as a transaction is not supported by a source document?

A debit entry increases assets, decreases liabilities, or decreases stockholders' equity.

A cash register tape would be a source document for which of the following?

Payment is made for land purchased earlier on credit.For this transaction, identify the effect on the accounting equation.

A file or book which contains a record for all accounts used by a company, including the account balance, is called a

Which of the following best describes a trial balance?

The accounting equation must balance after each transaction.

Not all recognizable events are supported by a standard source document.

Payment is made for an electric bill which was received and recorded earlier.For this transaction, identify the effect on the accounting equation.

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account.An account title may be used more than once or not at all. -A plot of land held for speculation

Debit entries are used to

Accounting As a Form of Communication

Financial Statements and the Annual Report

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities, Contingencies, and the True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters