Question 1

The proper order for the accounting process is:

Accepted Answer

A)  posting, transaction occurs, journalizing. 
B)  transaction occurs, posting, journalizing. 
C)  transaction occurs, transaction analyzed, journalizing, and posting. 
D)  transaction occurs, posting, transaction analyzed, journalizing. 
A)  posting, transaction occurs, journalizing. 
B)  transaction occurs, posting, journalizing. 
C)  transaction occurs, transaction analyzed, journalizing, and posting. 
D)  transaction occurs, posting, transaction analyzed, journalizing.

Question 2

Every transaction:

Accepted Answer

A)  must increase at least one account and decrease at least one account. 
B)  must debit at least one account and credit at least one account. 
C)  is recorded in either the journal or the ledger. 
D)  affects both an income statement account and a balance sheet account. 
A)  must increase at least one account and decrease at least one account. 
B)  must debit at least one account and credit at least one account. 
C)  is recorded in either the journal or the ledger. 
D)  affects both an income statement account and a balance sheet account.

Question 3

If the bookkeeper forgot to record a credit to accounts receivable:

Accepted Answer

A)  the trial balance would still balance. 
B)  debits would exceed credits on the trial balance. 
C)  credits would exceed debits on the trial balance. 
D)  total debits and total credits would both be incorrect on the trial balance. 
A)  the trial balance would still balance. 
B)  debits would exceed credits on the trial balance. 
C)  credits would exceed debits on the trial balance. 
D)  total debits and total credits would both be incorrect on the trial balance.

Question 4

Income statement data appears as revenues and expenses under Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 5

A chart of accounts:

Accepted Answer

A)  is used by an organization to determine the balance in all of their accounts. 
B)  lists all of the accounts of an organization in alphabetical order. 
C)  must be the same for all organizations. 
D)  lists all of an organization's accounts and account numbers. 
A)  is used by an organization to determine the balance in all of their accounts. 
B)  lists all of the accounts of an organization in alphabetical order. 
C)  must be the same for all organizations. 
D)  lists all of an organization's accounts and account numbers.

Question 6

To compute ending retained earnings on the statement of retained earnings:

Accepted Answer

A)  net income is added to the beginning retained earnings and dividends are subtracted from the beginning retained earnings. 
B)  net income and dividends are both added to beginning retained earnings. 
C)  net loss and dividends are both added to beginning retained earnings. 
D)  net income or net loss does not affect retained earnings. 
A)  net income is added to the beginning retained earnings and dividends are subtracted from the beginning retained earnings. 
B)  net income and dividends are both added to beginning retained earnings. 
C)  net loss and dividends are both added to beginning retained earnings. 
D)  net income or net loss does not affect retained earnings.

Question 7

Purchasing supplies on account would:

Accepted Answer

A)  increase total assets and decrease total liabilities. 
B)  increase total liabilities and decrease total assets. 
C)  increase total assets and increase total liabilities. 
D)  increase total liabilities and increase stockholders' equity. 
A)  increase total assets and decrease total liabilities. 
B)  increase total liabilities and decrease total assets. 
C)  increase total assets and increase total liabilities. 
D)  increase total liabilities and increase stockholders' equity.

Question 8

If the total debits and the total credits of a trial balance are not equal, the error could be due to:

Accepted Answer

A)  recording the same transaction twice. 
B)  recording both the debit and credit of the journal entry for the same incorrect amount. 
C)  an error in determining an account balance. 
D)  forgetting to record a transaction. 
A)  recording the same transaction twice. 
B)  recording both the debit and credit of the journal entry for the same incorrect amount. 
C)  an error in determining an account balance. 
D)  forgetting to record a transaction.

Question 9

The entry to record a shareholder's investment of $600 into the business would be:

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 10

A company completed the following transactions during the month of October: I. Purchased office supplies on account, $4,000.
II. Provided services for cash, $10,000.
III. Provided services on account, $12,000.
IV. Collected cash from a customer on account $7,000.
V. Paid the monthly rent of $3,000.
What was the company's total revenue for the month?

Accepted Answer

A)  $10,000 
B)  $22,000 
C)  $29,000 
D)  $36,000 
A)  $10,000 
B)  $22,000 
C)  $29,000 
D)  $36,000

Question 11

Entering a transaction in the journal is also known as booking the journal entry.

Accepted Answer

A) True 
 B)False

Question 12

Company A received cash and issued stock to a new stockholder. In recording this transaction:

Accepted Answer

A)  cash would be debited. 
B)  common stock would be debited. 
C)  cash would be credited. 
D)  retained earnings would be credited. 
A)  cash would be debited. 
B)  common stock would be debited. 
C)  cash would be credited. 
D)  retained earnings would be credited.

Question 13

When a trial balance is out of balance due to a slide-type error, the difference between total debits and total credits will be evenly divisible by 9.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a true statement regarding T accounts?

Accepted Answer

A)  The transaction needs to be analyzed to determine which accounts are affected before entering amounts in the T accounts. 
B)  If a company pays cash, an amount would be entered on the left side of the T account. 
C)  T accounts are only used to record complex transactions. 
D)  To debit an asset, an amount is entered on the left side of the T account and to debit a liability an amount is entered on the right side of the T account. 
A)  The transaction needs to be analyzed to determine which accounts are affected before entering amounts in the T accounts. 
B)  If a company pays cash, an amount would be entered on the left side of the T account. 
C)  T accounts are only used to record complex transactions. 
D)  To debit an asset, an amount is entered on the left side of the T account and to debit a liability an amount is entered on the right side of the T account.

Question 15

When using a four-column ledger account format, the pair of columns on the far right is used to show the:

Accepted Answer

A)  names of the accounts being debited and credited. 
B)  transaction dates and journal reference. 
C)  account balance. 
D)  debit and credit amounts posted from journal entries. 
A)  names of the accounts being debited and credited. 
B)  transaction dates and journal reference. 
C)  account balance. 
D)  debit and credit amounts posted from journal entries.

Question 16

An important rule to remember when working with T accounts is:

Accepted Answer

A)  when you debit an account, you are entering an amount of the right-hand side of the T account. 
B)  an increase to accounts payable will be recorded as a debit. 
C)  to credit an account means to enter an amount on the right-hand side of the T account. 
D)  the debit side of a T account is on the right-hand side of the T account for liabilities and revenues. 
A)  when you debit an account, you are entering an amount of the right-hand side of the T account. 
B)  an increase to accounts payable will be recorded as a debit. 
C)  to credit an account means to enter an amount on the right-hand side of the T account. 
D)  the debit side of a T account is on the right-hand side of the T account for liabilities and revenues.

Question 17

An accounts receivable usually specifies an interest rate.

Accepted Answer

A) True 
 B)False

Question 18

Since cash is increased with a debit, it must always have a debit balance.

Accepted Answer

A) True 
 B)False

Question 19

Indicate whether the account is an asset (A), liability (L), stockholders' equity (SE), revenue (R) or expense (E) account. Also indicate if the account would appear on the Balance Sheet (BS) or Income Statement (IS) or the Statement of Retained Earnings (SRE) The first account has been completed for you.

Accepted Answer

The answer of Indicate whether the account is an asset...

Question 20

The amount remaining in an account is called its balance.

Accepted Answer

A) True 
 B)False

The proper order for the accounting process is:

Every transaction:

If the bookkeeper forgot to record a credit to accounts receivable:

Income statement data appears as revenues and expenses under Retained Earnings.

A chart of accounts:

To compute ending retained earnings on the statement of retained earnings:

Purchasing supplies on account would:

If the total debits and the total credits of a trial balance are not equal, the error could be due to:

The entry to record a shareholder's investment of $600 into the business would be:

Entering a transaction in the journal is also known as booking the journal entry.

Company A received cash and issued stock to a new stockholder. In recording this transaction:

When a trial balance is out of balance due to a slide-type error, the difference between total debits and total credits will be evenly divisible by 9.

Which of the following is a true statement regarding T accounts?

When using a four-column ledger account format, the pair of columns on the far right is used to show the:

An important rule to remember when working with T accounts is:

An accounts receivable usually specifies an interest rate.

Since cash is increased with a debit, it must always have a debit balance.

The amount remaining in an account is called its balance.

The Financial Statements

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

The Income Statement, the Statement of Comprehensive Income, the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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Exam 2: Transaction Analysis

The proper order for the accounting process is:

Every transaction:

If the bookkeeper forgot to record a credit to accounts receivable:

Income statement data appears as revenues and expenses under Retained Earnings.

A chart of accounts:

To compute ending retained earnings on the statement of retained earnings:

Purchasing supplies on account would:

If the total debits and the total credits of a trial balance are not equal, the error could be due to:

The entry to record a shareholder's investment of $600 into the business would be:

Entering a transaction in the journal is also known as booking the journal entry.

Company A received cash and issued stock to a new stockholder. In recording this transaction:

When a trial balance is out of balance due to a slide-type error, the difference between total debits and total credits will be evenly divisible by 9.

Which of the following is a true statement regarding T accounts?

When using a four-column ledger account format, the pair of columns on the far right is used to show the:

An important rule to remember when working with T accounts is:

An accounts receivable usually specifies an interest rate.

Since cash is increased with a debit, it must always have a debit balance.

The amount remaining in an account is called its balance.

The Financial Statements

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

The Income Statement, the Statement of Comprehensive Income, the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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