Question 1

A compound journal entry involves at least two debit accounts and two credit accounts.

Accepted Answer

A) True 
 B)False

Question 2

What are the steps in the posting process for the debit side of an entry?

Accepted Answer

The steps in the posting process for the

Question 3

For a T account,an account balance is the difference in total dollars between total debit footings and total credit footings.

Accepted Answer

A) True 
 B)False

Question 4

The declaration of dividends will

Accepted Answer

A) decrease net income. 
B) increase liabilities. 
C) not affect total assets. 
D) increase stockholders' equity. 
A) decrease net income. 
B) increase liabilities. 
C) not affect total assets. 
D) increase stockholders' equity.

Question 5

A journal entry shows the date,credit account,and credit amount shown on one line,and the debit account (indented)and debit amount shown on the next line.

Accepted Answer

A) True 
 B)False

Question 6

Generally,before Accounts Receivable is debited,it is credited.

Accepted Answer

A) True 
 B)False

Question 7

A trial balance is normally prepared at the end of each business day.

Accepted Answer

A) True 
 B)False

Question 8

A purchase is recognized in the accounting records when

Accepted Answer

A) payment is made for the item purchased. 
B) the purchase requisition is sent to the purchasing department. 
C) title transfers from the seller to the buyer. 
D) the buyer receives the seller's bill. 
A) payment is made for the item purchased. 
B) the purchase requisition is sent to the purchasing department. 
C) title transfers from the seller to the buyer. 
D) the buyer receives the seller's bill.

Question 9

Why is the Dividends account increased by a debit? Explain in terms of its relationship to stockholders' equity.

Accepted Answer

Dividends represent a decrease

Question 10

Which of the following is not an example of obvious financial reporting frauds as discussed in the text?

Accepted Answer

A) Keeping the books open for a few days after the end of the reporting period. 
B) Transferring assets to an affiliate at more than their actual value. 
C) Recording as assets expenditures that should have been classified as expenses. 
D) Recording a liability when title to merchandise passes to the purchaser. 
A) Keeping the books open for a few days after the end of the reporting period. 
B) Transferring assets to an affiliate at more than their actual value. 
C) Recording as assets expenditures that should have been classified as expenses. 
D) Recording a liability when title to merchandise passes to the purchaser.

Question 11

In a journal entry,the Post.Ref.column is left blank until the entry has been posted.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an illustration of the classification issue?

Accepted Answer

A) At what amount should land be shown on the balance sheet? 
B) At what point should the payment of salaries to employees be recorded? 
C) Should supplies be recorded as an asset or as an expense? 
D) At what point should a bill be paid for the purchase of an item? 
A) At what amount should land be shown on the balance sheet? 
B) At what point should the payment of salaries to employees be recorded? 
C) Should supplies be recorded as an asset or as an expense? 
D) At what point should a bill be paid for the purchase of an item?

Question 13

Copper Company engaged in the following transactions during April  If the balance in cash after these transactions is $115,000,how much cash was collected on account?

Accepted Answer

A) $67,000 
B) $62,000 
C) $15,000 
D) $29,000 
A) $67,000 
B) $62,000 
C) $15,000 
D) $29,000

Question 14

A transaction should be recorded when title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.

Accepted Answer

A) True 
 B)False

Question 15

Fair value is the exchange price of an actual or potential business transaction between market participants.

Accepted Answer

A) True 
 B)False

Question 16

Dividends are deductions from stockholders' claims on retained earnings and are shown on the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 17

When a business reports an asset at an inflated dollar amount,is has violated the measurement issue of

Accepted Answer

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

Question 18

Which of the following accounts might be placed first in a journal entry?

Accepted Answer

A) Interest Payable,when it has been decreased. 
B) Accounts Receivable,when it has been decreased. 
C) Unearned Revenue,when it has been increased. 
D) Service Revenue,when it has been increased. 
A) Interest Payable,when it has been decreased. 
B) Accounts Receivable,when it has been decreased. 
C) Unearned Revenue,when it has been increased. 
D) Service Revenue,when it has been increased.

Question 19

A transaction that increases expenses will decrease stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 20

When a company records the purchase of 1 month of prepaid expense the transaction does not affect the totals of assets or liabilities and stockholders' equity.

Accepted Answer

A) True 
 B)False

Exam 2: Measurement Concepts: Recording Business Transactions

A compound journal entry involves at least two debit accounts and two credit accounts.

What are the steps in the posting process for the debit side of an entry?

For a T account,an account balance is the difference in total dollars between total debit footings and total credit footings.

The declaration of dividends will

A journal entry shows the date,credit account,and credit amount shown on one line,and the debit account (indented)and debit amount shown on the next line.

Generally,before Accounts Receivable is debited,it is credited.

A trial balance is normally prepared at the end of each business day.

A purchase is recognized in the accounting records when

Why is the Dividends account increased by a debit? Explain in terms of its relationship to stockholders' equity.

Which of the following is not an example of obvious financial reporting frauds as discussed in the text?

In a journal entry,the Post.Ref.column is left blank until the entry has been posted.

Which of the following is an illustration of the classification issue?

Copper Company engaged in the following transactions during April If the balance in cash after these transactions is $115,000,how much cash was collected on account?

A transaction should be recorded when title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.

Fair value is the exchange price of an actual or potential business transaction between market participants.

Dividends are deductions from stockholders' claims on retained earnings and are shown on the statement of retained earnings.

When a business reports an asset at an inflated dollar amount,is has violated the measurement issue of

Which of the following accounts might be placed first in a journal entry?

A transaction that increases expenses will decrease stockholders' equity.

When a company records the purchase of 1 month of prepaid expense the transaction does not affect the totals of assets or liabilities and stockholders' equity.

Uses of Accounting Information and the Financial Statements

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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