Question 1

The double-entry system is possible because all business transactions have two equal and opposite aspects.

Accepted Answer

A) True 
 B)False

Question 2

The numbering scheme of a chart of accounts usually contains gaps.

Accepted Answer

A) True 
 B)False

Question 3

Cash is received for services not yet performed.This transaction affects an asset account and a(n)

Accepted Answer

A)  asset account. 
B)  liability account. 
C)  revenue account. 
D)  expense account. 
A)  asset account. 
B)  liability account. 
C)  revenue account. 
D)  expense account.

Question 4

Revenue should be recorded when the related cash has been collected,not when it has been earned.

Accepted Answer

A) True 
 B)False

Question 5

If Accounts Receivable has debit postings of $58,000,credit postings of $44,000,and a normal ending balance of $48,000,which of the following was its beginning balance?

Accepted Answer

A)  $62,000 Dr. 
B)  $34,000 Dr. 
C)  $34,000 Cr. 
D)  $62,000 Cr. 
A)  $62,000 Dr. 
B)  $34,000 Dr. 
C)  $34,000 Cr. 
D)  $62,000 Cr.

Question 6

Journal entries are typically posted only at the end of the year.

Accepted Answer

A) True 
 B)False

Question 7

Match each definition with the correct term below.
-Trial balance

Accepted Answer

A) A journal entry that involves more than two accounts. 
B) A list of account numbers with corresponding account titles. 
C) The difficulty of deciding when a business transaction should be recorded. 
D) The difference in dollars between the total debit footing and the total credit footing. 
E) The chronological accounting record sometimes known as the book of original entry.
F)The basic storage units for accounting data.
G)The item that is prepared at the end of the accounting period to test if total debits equals total credits.
H)The process of transferring information from the journal to the ledger.
I)The exchange price of an actual or potential business transaction.
J)The practice of recording transactions at the exchange price at the point of recognition. 
A) A journal entry that involves more than two accounts. 
B) A list of account numbers with corresponding account titles. 
C) The difficulty of deciding when a business transaction should be recorded. 
D) The difference in dollars between the total debit footing and the total credit footing. 
E) The chronological accounting record sometimes known as the book of original entry.
F)The basic storage units for accounting data.
G)The item that is prepared at the end of the accounting period to test if total debits equals total credits.
H)The process of transferring information from the journal to the ledger.
I)The exchange price of an actual or potential business transaction.
J)The practice of recording transactions at the exchange price at the point of recognition.

Question 8

Which of the following transactions increases both assets and stockholders' equity?

Accepted Answer

A)  Payment received from a credit customer 
B)  Received a bank loan 
C)  Rendered a service,payment not yet received 
D)  Declared and paid a dividend 
A)  Payment received from a credit customer 
B)  Received a bank loan 
C)  Rendered a service,payment not yet received 
D)  Declared and paid a dividend

Question 9

A credit to an asset account means that asset account has been increased.

Accepted Answer

A) True 
 B)False

Question 10

Fair value relates most closely to the

Accepted Answer

A)  recognition point. 
B)  recognition issue. 
C)  valuation issue. 
D)  classification issue. 
A)  recognition point. 
B)  recognition issue. 
C)  valuation issue. 
D)  classification issue.

Question 11

When a business records revenue when it has been earned,it is addressing the measurement issue of

Accepted Answer

A)  recognition. 
B)  evaluation. 
C)  classification. 
D)  valuation. 
A)  recognition. 
B)  evaluation. 
C)  classification. 
D)  valuation.

Question 12

The cost principle is a solution to the recognition issue.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following accounts has a normal debit balance?

Accepted Answer

A)  Dividends 
B)  Common Stock 
C)  Accounts Payable 
D)  Retained Earnings 
A)  Dividends 
B)  Common Stock 
C)  Accounts Payable 
D)  Retained Earnings

Question 14

A contract is an example of a source document.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are examples of source documents except

Accepted Answer

A)  checks. 
B)  contracts. 
C)  ledgers. 
D)  receipts. 
A)  checks. 
B)  contracts. 
C)  ledgers. 
D)  receipts.

Question 16

An increase in an asset is recorded by a debit.

Accepted Answer

A) True 
 B)False

Question 17

To determine the balance of a particular account,one should refer to the

Accepted Answer

A)  source documents. 
B)  chart of accounts. 
C)  book of original entry. 
D)  ledger. 
A)  source documents. 
B)  chart of accounts. 
C)  book of original entry. 
D)  ledger.

Question 18

Which of the following accounts probably would be listed before the others in a chart of accounts?

Accepted Answer

A)  Rent Expense 
B)  Dividends 
C)  Notes Payable 
D)  Buildings 
A)  Rent Expense 
B)  Dividends 
C)  Notes Payable 
D)  Buildings

Question 19

Here is the trial balance for Sebastian Corporation:   If the trial balance showed a balance of $14,000 in the Dividends account and a balance of $22,000 in the Wages Expense account,what would be the amount of Advertising Fees Earned for the period?

Accepted Answer

A)  $98,000 
B)  $78,000 
C)  $108,000 
D)  $48,000 
A)  $98,000 
B)  $78,000 
C)  $108,000 
D)  $48,000

Question 20

The amount of profit would always be equal to the ending cash balance.

Accepted Answer

A) True 
 B)False

The double-entry system is possible because all business transactions have two equal and opposite aspects.

The numbering scheme of a chart of accounts usually contains gaps.

Cash is received for services not yet performed.This transaction affects an asset account and a(n)

Revenue should be recorded when the related cash has been collected,not when it has been earned.

If Accounts Receivable has debit postings of $58,000,credit postings of $44,000,and a normal ending balance of $48,000,which of the following was its beginning balance?

Journal entries are typically posted only at the end of the year.

Match each definition with the correct term below. -Trial balance

Which of the following transactions increases both assets and stockholders' equity?

A credit to an asset account means that asset account has been increased.

Fair value relates most closely to the

When a business records revenue when it has been earned,it is addressing the measurement issue of

The cost principle is a solution to the recognition issue.

Which of the following accounts has a normal debit balance?

A contract is an example of a source document.

All of the following are examples of source documents except

An increase in an asset is recorded by a debit.

To determine the balance of a particular account,one should refer to the

Which of the following accounts probably would be listed before the others in a chart of accounts?

Here is the trial balance for Sebastian Corporation: If the trial balance showed a balance of $14,000 in the Dividends account and a balance of $22,000 in the Wages Expense account,what would be the amount of Advertising Fees Earned for the period?

The amount of profit would always be equal to the ending cash balance.

Uses of Accounting Information and the Financial Statements

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 2: Analyzing Business Transactions

The double-entry system is possible because all business transactions have two equal and opposite aspects.

The numbering scheme of a chart of accounts usually contains gaps.

Cash is received for services not yet performed.This transaction affects an asset account and a(n)

Revenue should be recorded when the related cash has been collected,not when it has been earned.

If Accounts Receivable has debit postings of $58,000,credit postings of $44,000,and a normal ending balance of $48,000,which of the following was its beginning balance?

Journal entries are typically posted only at the end of the year.

Match each definition with the correct term below. -Trial balance

Which of the following transactions increases both assets and stockholders' equity?

A credit to an asset account means that asset account has been increased.

Fair value relates most closely to the

When a business records revenue when it has been earned,it is addressing the measurement issue of

The cost principle is a solution to the recognition issue.

Which of the following accounts has a normal debit balance?

A contract is an example of a source document.

All of the following are examples of source documents except

An increase in an asset is recorded by a debit.

To determine the balance of a particular account,one should refer to the

Which of the following accounts probably would be listed before the others in a chart of accounts?

Here is the trial balance for Sebastian Corporation: If the trial balance showed a balance of $14,000 in the Dividends account and a balance of $22,000 in the Wages Expense account,what would be the amount of Advertising Fees Earned for the period?

The amount of profit would always be equal to the ending cash balance.

Uses of Accounting Information and the Financial Statements

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters