Question 1

Which of the following statements is true?

Accepted Answer

A) Debits increase assets and increase liabilities. 
B) Credits decrease assets and decrease liabilities. 
C) Credits decrease assets and increase liabilities. 
D) Debits decrease liabilities and decrease assets. 
A) Debits increase assets and increase liabilities. 
B) Credits decrease assets and decrease liabilities. 
C) Credits decrease assets and increase liabilities. 
D) Debits decrease liabilities and decrease assets.

Question 2

The ledger is merely a bookkeeping device and, therefore, does not provide useful data for management.

Accepted Answer

A) True 
 B)False

Question 3

The number and types of accounts used by different business enterprises are the same if generally accepted accounting principles are being followed by the enterprises.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Which of the following statements is incorrect?

Accepted Answer

A) Expenses increase stockholders' equity. 
B) Expenses have normal debit balances. 
C) Expenses decrease stockholders' equity. 
D) Expenses are a negative factor in the computation of net income. 
A) Expenses increase stockholders' equity. 
B) Expenses have normal debit balances. 
C) Expenses decrease stockholders' equity. 
D) Expenses are a negative factor in the computation of net income.

Question 6

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

Accepted Answer

A) True 
 B)False

Question 7

Camper Van Company purchased equipment for $2,600 cash.As a result of this event,

Accepted Answer

A) stockholders' equity decreased by $2,600. 
B) total assets increased by $2,600. 
C) total assets remained unchanged. 
D) stockholders' equity decreased and total assets increased by $2,600. 
A) stockholders' equity decreased by $2,600. 
B) total assets increased by $2,600. 
C) total assets remained unchanged. 
D) stockholders' equity decreased and total assets increased by $2,600.

Question 8

The chart of accounts is a special ledger used in accounting systems.

Accepted Answer

A) True 
 B)False

Question 9

At January 1, 2021, Alligator Industries reported retained earnings of $150,000.During 2021, Alligator had a net loss of $30,000 and paid dividends of $15,000.At December 31, 2021, the balance of retained earnings is

Accepted Answer

A) $105,000. 
B) $120,000. 
C) $135,000. 
D) $165,000. 
A) $105,000. 
B) $120,000. 
C) $135,000. 
D) $165,000.

Question 10

Which of the following is not true of the terms debit and credit?

Accepted Answer

A) They can be abbreviated as Dr.and Cr. 
B) They can be interpreted to mean increase and decrease. 
C) They can be used to describe the balance of an account. 
D) They can be interpreted to mean left and right. 
A) They can be abbreviated as Dr.and Cr. 
B) They can be interpreted to mean increase and decrease. 
C) They can be used to describe the balance of an account. 
D) They can be interpreted to mean left and right.

Question 11

A debit is not the normal balance for which of the following accounts?

Accepted Answer

A) Asset account 
B) Dividends account 
C) Expense account 
D) Common stock account 
A) Asset account 
B) Dividends account 
C) Expense account 
D) Common stock account

Question 12

A T-account is

Accepted Answer

A) a way of depicting the basic form of an account. 
B) what the computer uses to organize bytes of information. 
C) a special account used instead of a trial balance. 
D) used for accounts that have both a debit and credit balance. 
A) a way of depicting the basic form of an account. 
B) what the computer uses to organize bytes of information. 
C) a special account used instead of a trial balance. 
D) used for accounts that have both a debit and credit balance.

Question 13

At January 31, 2021, the balance in Aislers Inc.'s supplies account was $750.During February, Aislers purchased supplies of $900 and used supplies of $1,125.At the end of
February, the balance in the supplies account should be

Accepted Answer

A) $525 debit. 
B) $975 debit. 
C) $525 credit. 
D) $775 debit. 
A) $525 debit. 
B) $975 debit. 
C) $525 credit. 
D) $775 debit.

Question 14

When a company distributes dividends,

Accepted Answer

A) it doesn't have to be cash, it could be another asset. 
B) the dividends account will be increased with a credit. 
C) the retained earnings account will be directly increased with a debit. 
D) the dividends account will be decreased with a debit. 
A) it doesn't have to be cash, it could be another asset. 
B) the dividends account will be increased with a credit. 
C) the retained earnings account will be directly increased with a debit. 
D) the dividends account will be decreased with a debit.

Question 15

A compound journal entry requires several debits to one account and several credits to one account.

Accepted Answer

A) True 
 B)False

Question 16

Radio Moscow Industries purchased supplies for $1,000.They paid $400 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 $600.Which of the following would be the correct way to complete the recording of the transaction?

Accepted Answer

A) Credit an asset account for $400. 
B) Credit another liability account for $400. 
C) Credit the retained earnings account for $400. 
D) Debit the retained earnings account for $400. 
A) Credit an asset account for $400. 
B) Credit another liability account for $400. 
C) Credit the retained earnings account for $400. 
D) Debit the retained earnings account for $400.

Question 17

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 18

The standard format of a journal would not include

Accepted Answer

A) a reference column. 
B) an account title column. 
C) a T-account. 
D) a date column. 
A) a reference column. 
B) an account title column. 
C) a T-account. 
D) a date column.

Question 19

An account consists of

Accepted Answer

A) one part. 
B) two parts. 
C) three parts. 
D) four parts. 
A) one part. 
B) two parts. 
C) three parts. 
D) four parts.

Question 20

European companies rely

Accepted Answer

A) less on historical cost and more on fair values than U.S.companies. 
B) less on fair values and more on historical cost than U.S.companies. 
C) completely on fair values for financial reporting. 
D) completely on historical cost for financial reporting.
IFRS. 
A) less on historical cost and more on fair values than U.S.companies. 
B) less on fair values and more on historical cost than U.S.companies. 
C) completely on fair values for financial reporting. 
D) completely on historical cost for financial reporting.
IFRS.

Which of the following statements is true?

The ledger is merely a bookkeeping device and, therefore, does not provide useful data for management.

The number and types of accounts used by different business enterprises are the same if generally accepted accounting principles are being followed by the enterprises.

An account will have a credit balance if the

Which of the following statements is incorrect?

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

Camper Van Company purchased equipment for $2,600 cash.As a result of this event,

The chart of accounts is a special ledger used in accounting systems.

At January 1, 2021, Alligator Industries reported retained earnings of $150,000.During 2021, Alligator had a net loss of $30,000 and paid dividends of $15,000.At December 31, 2021, the balance of retained earnings is

Which of the following is not true of the terms debit and credit?

A debit is not the normal balance for which of the following accounts?

A T-account is

At January 31, 2021, the balance in Aislers Inc.'s supplies account was $750.During February, Aislers purchased supplies of $900 and used supplies of $1,125.At the end of February, the balance in the supplies account should be

When a company distributes dividends,

A compound journal entry requires several debits to one account and several credits to one account.

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

The standard format of a journal would not include

An account consists of

European companies rely

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: Organisations, Stock Transactions and Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Time Value of Money

Payroll Accounting

Other Significant Liabilities

Filters

Exam 2: The Recording Process

Which of the following statements is true?

The ledger is merely a bookkeeping device and, therefore, does not provide useful data for management.

The number and types of accounts used by different business enterprises are the same if generally accepted accounting principles are being followed by the enterprises.

An account will have a credit balance if the

Which of the following statements is incorrect?

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

Camper Van Company purchased equipment for $2,600 cash.As a result of this event,

The chart of accounts is a special ledger used in accounting systems.

At January 1, 2021, Alligator Industries reported retained earnings of $150,000.During 2021, Alligator had a net loss of $30,000 and paid dividends of $15,000.At December 31, 2021, the balance of retained earnings is

Which of the following is not true of the terms debit and credit?

A debit is not the normal balance for which of the following accounts?

A T-account is

At January 31, 2021, the balance in Aislers Inc.'s supplies account was $750.During February, Aislers purchased supplies of $900 and used supplies of $1,125.At the end of February, the balance in the supplies account should be

When a company distributes dividends,

A compound journal entry requires several debits to one account and several credits to one account.

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

The standard format of a journal would not include

An account consists of

European companies rely

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: Organisations, Stock Transactions and Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Time Value of Money

Payroll Accounting

Other Significant Liabilities

Filters