Question 1

Assets normally show

Accepted Answer

A)  credit balances. 
B)  debit balances. 
C)  debit and credit balances. 
D)  debit or credit balances. 
A)  credit balances. 
B)  debit balances. 
C)  debit and credit balances. 
D)  debit or credit balances.

Question 2

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

Accepted Answer

A)  no errors have been made. 
B)  no errors can be discovered. 
C)  that all accounts reflect correct balances. 
D)  the mathematical equality of the accounting equation. 
A)  no errors have been made. 
B)  no errors can be discovered. 
C)  that all accounts reflect correct balances. 
D)  the mathematical equality of the accounting equation.

Question 3

A bookkeeping student has come to you for tutoring on the recording process. She is confused about the relationship between the chart of accounts and the ledger. Explain the purpose of the chart of accounts and the general ledger. In your explanation indicate the relationship between these two items as well.

Accepted Answer

The chart of accounts lists all of the a

Question 4

An accounting convention is best described as

Accepted Answer

A)  an absolute truth. 
B)  an accounting custom. 
C)  an optional rule. 
D)  something that cannot be changed. 
A)  an absolute truth. 
B)  an accounting custom. 
C)  an optional rule. 
D)  something that cannot be changed.

Question 5

A debit to an account indicates an increase in that account.

Accepted Answer

A) True 
 B)False

Question 6

A list of accounts and their balances at a given time is called a(n)

Accepted Answer

A)  journal. 
B)  posting. 
C)  trial balance. 
D)  income statement. 
A)  journal. 
B)  posting. 
C)  trial balance. 
D)  income statement.

Question 7

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

Accepted Answer

A)  An account has a debit and credit side. 
B)  An account is a source document. 
C)  An account may be part of a manual or a computerized accounting system. 
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 may be part of a manual or a computerized accounting system. 
D)  An account has a title.

Question 8

An account will have a credit balance if the

Accepted Answer

A)  credits exceed the debits. 
B)  first transaction entered was a credit. 
C)  debits exceed the credits. 
D)  last transaction entered was a credit. 
A)  credits exceed the debits. 
B)  first transaction entered was a credit. 
C)  debits exceed the credits. 
D)  last transaction entered was a credit.

Question 9

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to

Accepted Answer

A)  the company's bank. 
B)  equity. 
C)  ledger accounts. 
D)  financial statements. 
A)  the company's bank. 
B)  equity. 
C)  ledger accounts. 
D)  financial statements.

Question 10

Ayala Company showed the following balances at the end of its first year:   What did Ayala Company show as total credits on its trial balance?

Accepted Answer

A)  $24,500 
B)  $24,000 
C)  $23,500 
D)  $25,000 
A)  $24,500 
B)  $24,000 
C)  $23,500 
D)  $25,000

Question 11

An account is an individual accounting record of increases and decreases in specific

Accepted Answer

A)  liabilities. 
B)  assets. 
C)  expenses. 
D)  assets, liabilities, and equity items. 
A)  liabilities. 
B)  assets. 
C)  expenses. 
D)  assets, liabilities, and equity items.

Question 12

Accounts maintained within the ledger that appear on the statement of financial position include all of the following except

Accepted Answer

A)  Salaries and Wages Expense. 
B)  Interest Payable. 
C)  Supplies. 
D)  Share Capital-Ordinary. 
A)  Salaries and Wages Expense. 
B)  Interest Payable. 
C)  Supplies. 
D)  Share Capital-Ordinary.

Question 13

The explanation column of the general ledger

Accepted Answer

A)  is completed without exception. 
B)  is nonexistent. 
C)  is used infrequently. 
D)  shows account titles. 
A)  is completed without exception. 
B)  is nonexistent. 
C)  is used infrequently. 
D)  shows account titles.

Question 14

Which of the following statements is true regarding debits and credits?

Accepted Answer

A)  On the income statement, debits are used to increase account balances, whereas on the statement of financial position, credits are used to increase account balances. 
B)  The basic equation on the statement of financial position is Assets + Liabilities = Equity. 
C)  The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for liabilities. 
D)  On the income statement, revenues are increased by debits whereas on the statement of financial position retained earnings is increased by a credit. 
A)  On the income statement, debits are used to increase account balances, whereas on the statement of financial position, credits are used to increase account balances. 
B)  The basic equation on the statement of financial position is Assets + Liabilities = Equity. 
C)  The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for liabilities. 
D)  On the income statement, revenues are increased by debits whereas on the statement of financial position retained earnings is increased by a credit.

Question 15

Which of the following accounts does not have a normal credit balance?

Accepted Answer

A)  Share Capital-Ordinary 
B)  Revenue account 
C)  Liability account 
D)  Dividends 
A)  Share Capital-Ordinary 
B)  Revenue account 
C)  Liability account 
D)  Dividends

Question 16

On July 7, 2014, Anaya Enterprises performed cash services of $1,400. The entry to record this transaction would include

Accepted Answer

A)  a debit to Service Revenue of $1,400. 
B)  a credit to Accounts Receivable of $1,400. 
C)  a debit to Cash of $1,400. 
D)  a credit to Accounts Payable of $1,400. 
A)  a debit to Service Revenue of $1,400. 
B)  a credit to Accounts Receivable of $1,400. 
C)  a debit to Cash of $1,400. 
D)  a credit to Accounts Payable of $1,400.

Question 17

A debit is not the normal balance for which account listed below?

Accepted Answer

A)  Dividends 
B)  Cash 
C)  Accounts Receivable 
D)  Service Revenue 
A)  Dividends 
B)  Cash 
C)  Accounts Receivable 
D)  Service Revenue

Question 18

Which of the following statements is true regarding simple and compound entries?

Accepted Answer

A)  Simple entries can be prepared by anyone whereas compound entries need to be prepared by a skilled accountant. 
B)  Simple entries are recorded on the income statement whereas compound entries are recorded on the statement of financial position. 
C)  Simple entries involve one account, whereas compound entries involved 2 or more accounts. 
D)  An example of a compound entry would be the purchase of a machine for $400 cash and a $2,000 note payable. 
A)  Simple entries can be prepared by anyone whereas compound entries need to be prepared by a skilled accountant. 
B)  Simple entries are recorded on the income statement whereas compound entries are recorded on the statement of financial position. 
C)  Simple entries involve one account, whereas compound entries involved 2 or more accounts. 
D)  An example of a compound entry would be the purchase of a machine for $400 cash and a $2,000 note payable.

Question 19

Which one of the following represents the expanded basic accounting equation?

Accepted Answer

A)  Assets = Liabilities + Share Capital-Ordinary account + Retained Earnings + Dividends - Revenue - Expenses. 
B)  Assets + Dividends + Expenses = Liabilities + Share Capital-Ordinary + Retained Earnings + Revenues. 
C)  Assets - Liabilities - Dividends = Share Capital-Ordinary + Retained Earnings + Revenues - Expenses. 
D)  Assets = Revenues + Expenses - Liabilities. 
A)  Assets = Liabilities + Share Capital-Ordinary account + Retained Earnings + Dividends - Revenue - Expenses. 
B)  Assets + Dividends + Expenses = Liabilities + Share Capital-Ordinary + Retained Earnings + Revenues. 
C)  Assets - Liabilities - Dividends = Share Capital-Ordinary + Retained Earnings + Revenues - Expenses. 
D)  Assets = Revenues + Expenses - Liabilities.

Question 20

Under a double-entry system, show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected account.

Accepted Answer

The answer of Under a double-entry system, show how the...

Assets normally show

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

An accounting convention is best described as

A debit to an account indicates an increase in that account.

A list of accounts and their balances at a given time is called a(n)

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

An account will have a credit balance if the

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to

Ayala Company showed the following balances at the end of its first year: What did Ayala Company show as total credits on its trial balance?

An account is an individual accounting record of increases and decreases in specific

Accounts maintained within the ledger that appear on the statement of financial position include all of the following except

The explanation column of the general ledger

Which of the following statements is true regarding debits and credits?

Which of the following accounts does not have a normal credit balance?

On July 7, 2014, Anaya Enterprises performed cash services of $1,400. The entry to record this transaction would include

A debit is not the normal balance for which account listed below?

Which of the following statements is true regarding simple and compound entries?

Which one of the following represents the expanded basic accounting equation?

Under a double-entry system, show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected 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

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Exam 2: The Recording Process

Assets normally show

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

An accounting convention is best described as

A debit to an account indicates an increase in that account.

A list of accounts and their balances at a given time is called a(n)

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

An account will have a credit balance if the

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to

Ayala Company showed the following balances at the end of its first year: What did Ayala Company show as total credits on its trial balance?

An account is an individual accounting record of increases and decreases in specific

Accounts maintained within the ledger that appear on the statement of financial position include all of the following except

The explanation column of the general ledger

Which of the following statements is true regarding debits and credits?

Which of the following accounts does not have a normal credit balance?

On July 7, 2014, Anaya Enterprises performed cash services of $1,400. The entry to record this transaction would include

A debit is not the normal balance for which account listed below?

Which of the following statements is true regarding simple and compound entries?

Which one of the following represents the expanded basic accounting equation?

Under a double-entry system, show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected 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