Question 1

Which of the following transactions affects total liabilities?

Accepted Answer

A) Equipment is purchased for cash. 
B) Services are provided for a customer for credit. 
C) Payment is made on a bank loan. 
D) Common stock is issued. 
A) Equipment is purchased for cash. 
B) Services are provided for a customer for credit. 
C) Payment is made on a bank loan. 
D) Common stock is issued.

Question 2

A trial balance is a(n)

Accepted Answer

A) optional financial statement used only by creditors. 
B) tool used to prove the equality of debits and credits in the general ledger. 
C) list of accounts and their balances taken from the chart of accounts. 
D) financial statement which can be used in place of a balance sheet. 
A) optional financial statement used only by creditors. 
B) tool used to prove the equality of debits and credits in the general ledger. 
C) list of accounts and their balances taken from the chart of accounts. 
D) financial statement which can be used in place of a balance sheet.

Question 3

Select the organization that most closely achieves the role described. (Choices may be used more than once.)
a.Financial Accounting Standards Board (FASB)
b.International Accounting Standards Board (IASB)
c.Securities and Exchange Commission (SEC)
-Requires that publicly traded companies file financial information on a timely basis.

Accepted Answer

The answer of Select the organization that most closely achieves...

Question 4

Which of the following statements is true regarding economic events?

Accepted Answer

A) The signing of a service contract is an example of an external event that is recorded in the accounting records. 
B) Every event which affects an entity can be identified from a source document. 
C) All internal and external events must be measured with sufficient reliability. 
D) External events involve exchanges between an entity and another entity outside the company. 
A) The signing of a service contract is an example of an external event that is recorded in the accounting records. 
B) Every event which affects an entity can be identified from a source document. 
C) All internal and external events must be measured with sufficient reliability. 
D) External events involve exchanges between an entity and another entity outside the company.

Question 5

Match the following terms with their correct definition.
a.Account
f.Debit
b.Accounting cycle
g.Event
c.Chart of accounts
h.General ledger
d.Cost vs. benefit
i.Journal
e.Credit
j.Trial balance
-The sequence of procedures used by companies to transform the effects of business activities into financial statements.

Accepted Answer

The answer of Match the following terms with their correct...

Question 6

The accounting equation must balance before and after every accounting transaction.

Accepted Answer

A) True 
 B)False

Question 7

Identify the transactions that the bookkeeper recorded incorrectly in the journal. Prepare the journal entry that the bookkeeper should have made for each transaction that you identify as being made incorrectly.

Accepted Answer

The May 11, 15, and

Question 8

A consulting firm provided services last month and billed its client. This month, the company received payment from the customer. What impact does this month's transaction have on the firm's working capital?

Accepted Answer

A) increase 
B) decrease 
C) no net effect 
D) Unable to determine with this limited information. 
A) increase 
B) decrease 
C) no net effect 
D) Unable to determine with this limited information.

Question 9

Which of the following statements is true?

Accepted Answer

A) If a debit entry is made to an account in the general journal, the same account will receive a credit entry when the amount is posted to the general ledger. 
B) If all transactions are correctly posted to the general ledger, the sum of the accounts with debit balances should be equal to the sum of the accounts with credit balances. 
C) Posting occurs when numbers in the general ledger accounts are transferred to the general journal. 
D) If the sum of the debit balances equals the sum of the credit balances, this proves that there were no mistakes made in the posting process. 
A) If a debit entry is made to an account in the general journal, the same account will receive a credit entry when the amount is posted to the general ledger. 
B) If all transactions are correctly posted to the general ledger, the sum of the accounts with debit balances should be equal to the sum of the accounts with credit balances. 
C) Posting occurs when numbers in the general ledger accounts are transferred to the general journal. 
D) If the sum of the debit balances equals the sum of the credit balances, this proves that there were no mistakes made in the posting process.

Question 10

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
a.Assets and liabilities increase
b.Assets and contributed capital increase
c.Assets and retained earnings increase
d.Two asset accounts are impacted, but there is no net effect on total assets
e.Assets and liabilities decrease
f.Assets and retained earnings decrease
g.Liabilities increase and retained earnings decrease
h.Liabilities decrease and retained earnings increase
-Providing services for customers for credit

Accepted Answer

The answer of Several transactions are listed. Use the choices...

Question 11

Match the following terms with their correct definition.
a.Account
f.Debit
b.Accounting cycle
g.Event
c.Chart of accounts
h.General ledger
d.Cost vs. benefit
i.Journal
e.Credit
j.Trial balance
-A list of all the accounts maintained by the business.

Accepted Answer

The answer of Match the following terms with their correct...

Question 12

Select the organization that most closely achieves the role described. (Choices may be used more than once.)
a.Financial Accounting Standards Board (FASB)
b.International Accounting Standards Board (IASB)
c.Securities and Exchange Commission (SEC)
-Works to reduce differences in accounting standards throughout the world.

Accepted Answer

The answer of Select the organization that most closely achieves...

Question 13

Dividends are declared and paid to the company's stockholders. What effect does this transaction have on the company's accounting equation?

Accepted Answer

A) Assets and liabilities decrease. 
B) Assets and retained earnings decrease. 
C) Liabilities decrease and retained earnings increases. 
D) Liabilities increase and contributed capital decreases. 
A) Assets and liabilities decrease. 
B) Assets and retained earnings decrease. 
C) Liabilities decrease and retained earnings increases. 
D) Liabilities increase and contributed capital decreases.

Question 14

Match the following principles with their correct definition.
a.Comparability
g.Historical cost
b.Conservatism
h.Matching
c.Double-entry accounting
i.Monetary unit
d.Economic entity
j.Revenue recognition
e.Going concern
k.Time period
f.Full disclosure
-The system used by companies to record the effects of transactions on the accounting equation.

Accepted Answer

The answer of Match the following principles with their correct...

Question 15

Selected accounts at July 31 are provided below:
    
-Refer to Happy Heights Country Club. On which date did the country club sell a club membership on account?

Accepted Answer

A) July 2nd 
B) July 3rd 
C) July 5th 
D) July 7th 
A) July 2nd 
B) July 3rd 
C) July 5th 
D) July 7th

Question 16

Selected accounts at July 31 are provided below:
    
-Refer to Happy Heights Country Club. Which of the following describes the transactions which occurred on July 7th?

Accepted Answer

A) sold club membership on credit 
B) collected revenue in advance 
C) collected accounts receivable 
D) sold club membership for cash 
A) sold club membership on credit 
B) collected revenue in advance 
C) collected accounts receivable 
D) sold club membership for cash

Question 17

For liabilities, stockholders' equity, and revenue accounts, debits will _____________ the account balance.

Accepted Answer

The answer of For liabilities, stockholders' equity, and revenue accounts,...

Question 18

High Point Furniture Company manufactures furniture. The company has applied for a sizeable loan to expand its operations. Based on the company's annual report, the loan officer concludes that High Point is very profitable and appears to have a strong financial position. However, watching the nightly news on television that evening, the banker discovers that High Point is a defendant in a class action lawsuit related to defective products. Serious injuries were allegedly caused by the company's infant high chairs overturning. The television news report is an example of financial information that is

Accepted Answer

A) predictable. 
B) conservative. 
C) relevant. 
D) comparable. 
A) predictable. 
B) conservative. 
C) relevant. 
D) comparable.

Question 19

The various rules and conventions that have evolved over time to guide the preparation of financial statements in the U.S. are called ____________________.

Accepted Answer

Generally

Question 20

The time-period assumption is necessary because

Accepted Answer

A) inflation exists and causes confusing swings in financial statement amounts over time. 
B) external users of financial statements want accurately-reported net income for a specific period of time. 
C) financial statements users expect full disclosure of all economic events throughout the entire time period. 
D) it is required by the federal government. 
A) inflation exists and causes confusing swings in financial statement amounts over time. 
B) external users of financial statements want accurately-reported net income for a specific period of time. 
C) financial statements users expect full disclosure of all economic events throughout the entire time period. 
D) it is required by the federal government.

Which of the following transactions affects total liabilities?

A trial balance is a(n)

Which of the following statements is true regarding economic events?

The accounting equation must balance before and after every accounting transaction.

Identify the transactions that the bookkeeper recorded incorrectly in the journal. Prepare the journal entry that the bookkeeper should have made for each transaction that you identify as being made incorrectly.

A consulting firm provided services last month and billed its client. This month, the company received payment from the customer. What impact does this month's transaction have on the firm's working capital?

Which of the following statements is true?

Match the following terms with their correct definition. a.Account f.Debit b.Accounting cycle g.Event c.Chart of accounts h.General ledger d.Cost vs. benefit i.Journal e.Credit j.Trial balance -A list of all the accounts maintained by the business.

Dividends are declared and paid to the company's stockholders. What effect does this transaction have on the company's accounting equation?

Selected accounts at July 31 are provided below: -Refer to Happy Heights Country Club. On which date did the country club sell a club membership on account?

Selected accounts at July 31 are provided below: -Refer to Happy Heights Country Club. Which of the following describes the transactions which occurred on July 7th?

For liabilities, stockholders' equity, and revenue accounts, debits will _____________ the account balance.

The various rules and conventions that have evolved over time to guide the preparation of financial statements in the U.S. are called ____________________.

The time-period assumption is necessary because

Accounting and the Financial Statements

Accrual Accounting

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 2: The Accounting Information System

Which of the following transactions affects total liabilities?

A trial balance is a(n)

Which of the following statements is true regarding economic events?

The accounting equation must balance before and after every accounting transaction.

Identify the transactions that the bookkeeper recorded incorrectly in the journal. Prepare the journal entry that the bookkeeper should have made for each transaction that you identify as being made incorrectly.

A consulting firm provided services last month and billed its client. This month, the company received payment from the customer. What impact does this month's transaction have on the firm's working capital?

Which of the following statements is true?

Match the following terms with their correct definition. a.Account f.Debit b.Accounting cycle g.Event c.Chart of accounts h.General ledger d.Cost vs. benefit i.Journal e.Credit j.Trial balance -A list of all the accounts maintained by the business.

Dividends are declared and paid to the company's stockholders. What effect does this transaction have on the company's accounting equation?

Selected accounts at July 31 are provided below: -Refer to Happy Heights Country Club. On which date did the country club sell a club membership on account?

Selected accounts at July 31 are provided below: -Refer to Happy Heights Country Club. Which of the following describes the transactions which occurred on July 7th?

For liabilities, stockholders' equity, and revenue accounts, debits will _____________ the account balance.

The various rules and conventions that have evolved over time to guide the preparation of financial statements in the U.S. are called ____________________.

The time-period assumption is necessary because

Accounting and the Financial Statements

Accrual Accounting

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters