Question 1

After initially recording an asset at cost,fair value is

Accepted Answer

A) the price at which an asset could be sold in a current transaction between independent parties. 
B) the actual,or historical,price at which the asset was acquired. 
C) the easiest value used to measure and record assets. 
D) verifiable at all future dates by referring to the invoice price paid for the asset. 
A) the price at which an asset could be sold in a current transaction between independent parties. 
B) the actual,or historical,price at which the asset was acquired. 
C) the easiest value used to measure and record assets. 
D) verifiable at all future dates by referring to the invoice price paid for the asset.

Question 2

Receiving cash from a customer for settlement of an Accounts Receivable will

Accepted Answer

A) decrease Stockholders' Equity. 
B) increase net income. 
C) increase total assets. 
D) not affect total assets. 
A) decrease Stockholders' Equity. 
B) increase net income. 
C) increase total assets. 
D) not affect total assets.

Question 3

A trial balance may be prepared at any point in time.

Accepted Answer

A) True 
 B)False

Question 4

A trial balance proves that the accounts are in balance.Does a balanced trial balance also prove that all the transactions are correctly analyzed and recorded? Why or why not?

Accepted Answer

The trial balance proves whether the acc

Question 5

Proper __________ depends on correctly analyzing the effect of each transaction and on maintaining a system of accounts that reflects that effect.

Accepted Answer

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

Question 6

A purchase should usually not be recognized (recorded)before the title is transferred because,until that point,the vendor has not fulfilled its contractual obligation and the buyer has no liability.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Generally accepted accounting principles state that all business transactions should be valued at fair value both when they occur and at all subsequent reporting dates.

Accepted Answer

A) True 
 B)False

Question 9

One of the general rules of the double-entry system is that total debits must always be equal to total credits.

Accepted Answer

A) True 
 B)False

Question 10

From the following alphabetical list of account balances,all of which are normal,for Cannon Company on September 30,20x5,prepare a trial balance in proper form (the amount of dividends paid by Cannon Company must be computed).

Accepted Answer

The answer of From the following alphabetical list of account...

Question 11

The general journal is a chronological record of all transactions.

Accepted Answer

A) True 
 B)False

Question 12

The double-entry system

Accepted Answer

A) requires that each transaction be recorded with at least one debit and one credit. 
B) requires that the total amount of the debits must always equal the total amount of the credits. 
C) is based on the principle of duality. 
D) All of these choices. 
A) requires that each transaction be recorded with at least one debit and one credit. 
B) requires that the total amount of the debits must always equal the total amount of the credits. 
C) is based on the principle of duality. 
D) All of these choices.

Question 13

Business transactions are economic events that should be recorded in the accounting records.

Accepted Answer

A) True 
 B)False

Question 14

The issue of deciding when to record a transaction is solved by

Accepted Answer

A) properly classifying the transaction. 
B) deciding on a point of recognition. 
C) assigning historical cost to the transaction. 
D) analyzing the intent of management. 
A) properly classifying the transaction. 
B) deciding on a point of recognition. 
C) assigning historical cost to the transaction. 
D) analyzing the intent of management.

Question 15

When a service has been performed,but no cash has been received,which of the following statements is true?

Accepted Answer

A) The entry would include a debit to Accounts Receivable. 
B) The entry would include a debit to Accounts Payable. 
C) The entry would include a credit to Unearned Revenue. 
D) No entry is required until the cash is received. 
A) The entry would include a debit to Accounts Receivable. 
B) The entry would include a debit to Accounts Payable. 
C) The entry would include a credit to Unearned Revenue. 
D) No entry is required until the cash is received.

Question 16

One might see "J5" correctly placed in the Post.Ref.column of the Accounts Payable account.

Accepted Answer

A) True 
 B)False

Question 17

The controller for Tires and More,Inc.has recorded the following transactions during the month: the company was established by selling 10,000 shares of stock to the public for $20,000 on the 1st of the month;the company recorded $36,000 of revenue for tires and services provided during the month;and expenses of $22,000 were recorded for the month.What is the balance of Stockholders' Equity at the end of the month,and is the balance a debit or a credit?

Accepted Answer

A) $34,000 debit. 
B) $34,000 credit. 
C) $20,000 credit. 
D) $6,000 debit. 
A) $34,000 debit. 
B) $34,000 credit. 
C) $20,000 credit. 
D) $6,000 debit.

Question 18

The final step of the transaction analysis is the preparation of the trial balance.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following guidelines is correct?

Accepted Answer

A) Dollar signs ($)are required in all financial statements and other schedules. 
B) Account names are capitalized when referenced in text or listed in work documents like the journal or ledger. 
C) In financial statements only the first word of an account name is capitalized. 
D) All of these choices. 
A) Dollar signs ($)are required in all financial statements and other schedules. 
B) Account names are capitalized when referenced in text or listed in work documents like the journal or ledger. 
C) In financial statements only the first word of an account name is capitalized. 
D) All of these choices.

Question 20

When a company receives a product previously ordered,a recordable transaction has occurred.

Accepted Answer

A) True 
 B)False

Exam 2: Measurement Concepts: Recording Business Transactions

After initially recording an asset at cost,fair value is

Receiving cash from a customer for settlement of an Accounts Receivable will

A trial balance may be prepared at any point in time.

A trial balance proves that the accounts are in balance.Does a balanced trial balance also prove that all the transactions are correctly analyzed and recorded? Why or why not?

Proper __________ depends on correctly analyzing the effect of each transaction and on maintaining a system of accounts that reflects that effect.

A purchase should usually not be recognized (recorded)before the title is transferred because,until that point,the vendor has not fulfilled its contractual obligation and the buyer has no liability.

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

Generally accepted accounting principles state that all business transactions should be valued at fair value both when they occur and at all subsequent reporting dates.

One of the general rules of the double-entry system is that total debits must always be equal to total credits.

From the following alphabetical list of account balances,all of which are normal,for Cannon Company on September 30,20x5,prepare a trial balance in proper form (the amount of dividends paid by Cannon Company must be computed).

The general journal is a chronological record of all transactions.

The double-entry system

Business transactions are economic events that should be recorded in the accounting records.

The issue of deciding when to record a transaction is solved by

When a service has been performed,but no cash has been received,which of the following statements is true?

One might see "J5" correctly placed in the Post.Ref.column of the Accounts Payable account.

The final step of the transaction analysis is the preparation of the trial balance.

Which of the following guidelines is correct?

When a company receives a product previously ordered,a recordable transaction has occurred.

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

Filters