Question 1

Robitaille Company received a cash advance of $500 from a customer. As a result of this event,

Accepted Answer

A)  assets increased by $500. 
B)  equity increased by $500. 
C)  liabilities decreased by $500. 
D)  revenues increased by $500. 
A)  assets increased by $500. 
B)  equity increased by $500. 
C)  liabilities decreased by $500. 
D)  revenues increased by $500.

Question 2

Posting is the process of proving the equality of debits and credits in the trial balance.

Accepted Answer

A) True 
 B)False

Question 3

A fellow classmate is confused about how debits and credits relate to the basic accounting equation. State the basic accounting equation, convert it into the expanded accounting equation, and then explain how it ties into the rules for debits and credits.

Accepted Answer

The basic accounting equation is:
Assets

Question 4

Currency signs are typically used only in the trial balance and the financial statements.

Accepted Answer

A) True 
 B)False

Question 5

Customarily, a trial balance is prepared

Accepted Answer

A)  at the end of each day. 
B)  after each journal entry is posted. 
C)  at the end of an accounting period. 
D)  only at the inception of the business. 
A)  at the end of each day. 
B)  after each journal entry is posted. 
C)  at the end of an accounting period. 
D)  only at the inception of the business.

Question 6

Taylor Industries purchased supplies for £1,000. They paid £500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for ₤1,000, a credit to a liability account for ₤500. Which of the following would be the correct way to complete the recording of the transaction?

Accepted Answer

A)  Credit an asset account for ₤500. 
B)  Credit another liability account for ₤500. 
C)  Credit the retained earnings account for ₤500. 
D)  Debit the retained earnings account for ₤500. 
A)  Credit an asset account for ₤500. 
B)  Credit another liability account for ₤500. 
C)  Credit the retained earnings account for ₤500. 
D)  Debit the retained earnings account for ₤500.

Question 7

Transactions in a journal are initially recorded in

Accepted Answer

A)  account number order. 
B)  dollar amount order. 
C)  alphabetical order. 
D)  chronological order. 
A)  account number order. 
B)  dollar amount order. 
C)  alphabetical order. 
D)  chronological order.

Question 8

A chart of accounts for a business firm

Accepted Answer

A)  is a graph. 
B)  indicates the amount of profit or loss for the period. 
C)  lists the accounts and account numbers that identify their location in the ledger. 
D)  shows the balance of each account in the general ledger. 
A)  is a graph. 
B)  indicates the amount of profit or loss for the period. 
C)  lists the accounts and account numbers that identify their location in the ledger. 
D)  shows the balance of each account in the general ledger.

Question 9

A trial balance

Accepted Answer

A)  will not balance if a correct journal entry is posted twice. 
B)  proves that all transactions have been recorded. 
C)  proves that transactions are recorded correctly. 
D)  is the same under GAAP and IFRS. 
A)  will not balance if a correct journal entry is posted twice. 
B)  proves that all transactions have been recorded. 
C)  proves that transactions are recorded correctly. 
D)  is the same under GAAP and IFRS.

Question 10

Which of the following is the correct sequence of steps in the recording process?

Accepted Answer

A)  Posting, journalizing, analyzing 
B)  Journalizing, analyzing, posting 
C)  Analyzing, posting, journalizing 
D)  Analyzing, journalizing, posting 
A)  Posting, journalizing, analyzing 
B)  Journalizing, analyzing, posting 
C)  Analyzing, posting, journalizing 
D)  Analyzing, journalizing, posting

Question 11

An accountant has debited an asset account for $1,000 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

Accepted Answer

A)  Credit an asset account for $500. 
B)  Credit another liability account for $500. 
C)  Credit an equity account for $500. 
D)  Debit an equity account for $500. 
A)  Credit an asset account for $500. 
B)  Credit another liability account for $500. 
C)  Credit an equity account for $500. 
D)  Debit an equity account for $500.

Question 12

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 13

The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for assets.

Accepted Answer

A) True 
 B)False

Question 14

If a revenue account is credited, the revenue account is increased.

Accepted Answer

A) True 
 B)False

Question 15

Identify the impact on the accounting equation of the following transactions.
1. Purchased 36-month insurance policy for cash.
2. Purchased supplies on account.
3. Received utility bill to be paid at later date.
4. Paid utility bill previously accrued.

Accepted Answer

1. Net effect is no change: Increases as

Question 16

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 17

Revenues are

Accepted Answer

A)  impacted by debits and credits in the same way that expenses are impacted by debits and credits. 
B)  a subdivision of equity, providing information about why equity increased. 
C)  reported on the statement of financial position as a current item. 
D)  All of these answer choices are correct. 
A)  impacted by debits and credits in the same way that expenses are impacted by debits and credits. 
B)  a subdivision of equity, providing information about why equity increased. 
C)  reported on the statement of financial position as a current item. 
D)  All of these answer choices are correct.

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

The recording process becomes more efficient and informative if all transactions are recorded in one account.

Accepted Answer

A) True 
 B)False

Question 20

Management could determine the amounts due from customers by examining which ledger account?

Accepted Answer

A)  Service Revenue 
B)  Accounts Payable 
C)  Accounts Receivable 
D)  Supplies 
A)  Service Revenue 
B)  Accounts Payable 
C)  Accounts Receivable 
D)  Supplies

Robitaille Company received a cash advance of $500 from a customer. As a result of this event,

Posting is the process of proving the equality of debits and credits in the trial balance.

A fellow classmate is confused about how debits and credits relate to the basic accounting equation. State the basic accounting equation, convert it into the expanded accounting equation, and then explain how it ties into the rules for debits and credits.

Currency signs are typically used only in the trial balance and the financial statements.

Customarily, a trial balance is prepared

Transactions in a journal are initially recorded in

A chart of accounts for a business firm

A trial balance

Which of the following is the correct sequence of steps in the recording process?

An accountant has debited an asset account for $1,000 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

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.

The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for assets.

If a revenue account is credited, the revenue account is increased.

Identify the impact on the accounting equation of the following transactions. 1. Purchased 36-month insurance policy for cash. 2. Purchased supplies on account. 3. Received utility bill to be paid at later date. 4. Paid utility bill previously accrued.

A credit to a liability account

Revenues are

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

The recording process becomes more efficient and informative if all transactions are recorded in one account.

Management could determine the amounts due from customers by examining which ledger account?

Accounting in Action

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Accounting and Financial Reporting for Contingent Liabilities and Leases

Filters

Exam 2: The Recording Process

Robitaille Company received a cash advance of $500 from a customer. As a result of this event,

Posting is the process of proving the equality of debits and credits in the trial balance.

A fellow classmate is confused about how debits and credits relate to the basic accounting equation. State the basic accounting equation, convert it into the expanded accounting equation, and then explain how it ties into the rules for debits and credits.

Currency signs are typically used only in the trial balance and the financial statements.

Customarily, a trial balance is prepared

Transactions in a journal are initially recorded in

A chart of accounts for a business firm

A trial balance

Which of the following is the correct sequence of steps in the recording process?

An accountant has debited an asset account for $1,000 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

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.

The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for assets.

If a revenue account is credited, the revenue account is increased.

Identify the impact on the accounting equation of the following transactions. 1. Purchased 36-month insurance policy for cash. 2. Purchased supplies on account. 3. Received utility bill to be paid at later date. 4. Paid utility bill previously accrued.

A credit to a liability account

Revenues are

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

The recording process becomes more efficient and informative if all transactions are recorded in one account.

Management could determine the amounts due from customers by examining which ledger account?

Accounting in Action

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Accounting and Financial Reporting for Contingent Liabilities and Leases

Filters