Question 1

Posting is the process of:

Accepted Answer

A) Transferring debit and credit entries from the journal into the appropriate ledger accounts. 
B) Determining that the dollar amount of debit entries recorded in the ledger is equal to the dollar amount of credit entries. 
C) Entering information into a computerized data base. 
D) Preparing journal entries to describe each business transaction. 
A) Transferring debit and credit entries from the journal into the appropriate ledger accounts. 
B) Determining that the dollar amount of debit entries recorded in the ledger is equal to the dollar amount of credit entries. 
C) Entering information into a computerized data base. 
D) Preparing journal entries to describe each business transaction.

Question 2

If a company purchases equipment on account:

Accepted Answer

A) Assets will increase and owners' equity will also increase. 
B) Assets will increase and owners' equity will decrease. 
C) Assets will increase and owners' equity will remain unchanged. 
D) Assets will increase and liabilities will decrease. 
A) Assets will increase and owners' equity will also increase. 
B) Assets will increase and owners' equity will decrease. 
C) Assets will increase and owners' equity will remain unchanged. 
D) Assets will increase and liabilities will decrease.

Question 3

A journal entry to recognize an expense must include:

Accepted Answer

A) A credit to Accounts Payable. 
B) A credit to an expense account. 
C) A credit to Cash. 
D) A debit to an expense account. 
A) A credit to Accounts Payable. 
B) A credit to an expense account. 
C) A credit to Cash. 
D) A debit to an expense account.

Question 4

Revenues increase owners' equity because:

Accepted Answer

A) Revenues increase net income which increases retained earnings. 
B) Revenues are recorded by a debit. 
C) Of the matching principle. 
D) The conservatism principle requires revenues be recognized with an increase to owners' equity. 
A) Revenues increase net income which increases retained earnings. 
B) Revenues are recorded by a debit. 
C) Of the matching principle. 
D) The conservatism principle requires revenues be recognized with an increase to owners' equity.

Question 5

If the number of debit entries in an account is greater than the number of credit entries,the account will have a debit balance.

Accepted Answer

A) True 
 B)False

Question 6

All liability accounts normally have a credit balance.

Accepted Answer

A) True 
 B)False

Question 7

The collection of accounts receivable is recorded by a:

Accepted Answer

A) Debit to Cash and a debit to Accounts Receivable. 
B) Credit to Cash and a credit to Accounts Receivable. 
C) Debit to Cash and a credit to Accounts Receivable. 
D) Credit to Cash and a debit to Accounts Receivable. 
A) Debit to Cash and a debit to Accounts Receivable. 
B) Credit to Cash and a credit to Accounts Receivable. 
C) Debit to Cash and a credit to Accounts Receivable. 
D) Credit to Cash and a debit to Accounts Receivable.

Question 8

The journal entry to record a particular business transaction includes a credit to a liability account.This transaction is most likely also to include:

Accepted Answer

A) Issuance of new capital stock. 
B) The purchase of an asset on account. 
C) A cash payment. 
D) A credit to Accounts Receivable. 
A) Issuance of new capital stock. 
B) The purchase of an asset on account. 
C) A cash payment. 
D) A credit to Accounts Receivable.

Question 9

The realization principle indicates that revenue usually should be recognized and recorded in the accounting records:

Accepted Answer

A) When goods are sold or services are rendered to customers. 
B) When cash is collected from customers. 
C) At the end of the accounting period. 
D) Only when the revenue can be matched by an equal dollar amount of expenses. 
A) When goods are sold or services are rendered to customers. 
B) When cash is collected from customers. 
C) At the end of the accounting period. 
D) Only when the revenue can be matched by an equal dollar amount of expenses.

Question 10

Brett Tarek,a manager at D&J Landscaping,Inc.needs information regarding the amount of accounts payable currently owed by the company.This information would most easily be found in the:

Accepted Answer

A) General ledger. 
B) General journal. 
C) Income statement. 
D) Notes to the financial statements. 
A) General ledger. 
B) General journal. 
C) Income statement. 
D) Notes to the financial statements.

Question 11

Dividends are an expense to a corporation and appear on the income statement.

Accepted Answer

A) True 
 B)False

Question 12

If a company purchases equipment for cash:

Accepted Answer

A) Assets will increase and owners' equity will also increase. 
B) Assets will increase and owners' equity will decrease. 
C) Assets will increase and owners' equity will remain unchanged. 
D) Total assets and owners' equity will remain unchanged. 
A) Assets will increase and owners' equity will also increase. 
B) Assets will increase and owners' equity will decrease. 
C) Assets will increase and owners' equity will remain unchanged. 
D) Total assets and owners' equity will remain unchanged.

Question 13

A trial balance that balances provides proof that all transactions were correctly journalized and posted to the ledger.

Accepted Answer

A) True 
 B)False

Question 14

In its simplest form an account has only three elements: a title,a left side (called debit),and a right side (called credit).

Accepted Answer

A) True 
 B)False

Question 15

Revenues increase owners' equity and are,therefore,recorded by crediting the revenues account.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following accounts normally does not have a debit balance?

Accepted Answer

A) Accounts receivable. 
B) Cash. 
C) Building. 
D) Capital Stock. 
A) Accounts receivable. 
B) Cash. 
C) Building. 
D) Capital Stock.

Question 17

Accounting terminology
Listed below are nine technical accounting terms introduced in this chapter:   (A.)The accounting record in which transactions are initially recorded.
(B.)A concept designed to avoid overstatement of the financial strength of a company.
(C.)A schedule prepared to determine the equality of the debit and credit amounts in the ledger.
(D.)An amount entered in the right side of a ledger account.
(E.)The sequence of procedures involved in recording transactions,processing the information in the accounting system,and summarizing the information in the form of financial statements.
(F.)The accounting record that contains a separate account for each type of asset and liability,and for each element of owners' equity appearing in the balance sheet.
(G.)The system of accounting in which every business transaction is recorded by equal dollar amounts of debit and credit entries.

Accepted Answer

(A.)Journal; (B.)Conservatism;

Question 18

The left-hand side of an account is used for recording debits and the right-hand side for recording credits.

Accepted Answer

A) True 
 B)False

Question 19

The agreement of the debit and credit totals of the trial balance gives assurance that:

Accepted Answer

A) All transactions were posted correctly. 
B) No transactions were omitted. 
C) The number of accounts with debit balances equals the number of accounts with credit balances. 
D) The total debits equal the total credits. 
A) All transactions were posted correctly. 
B) No transactions were omitted. 
C) The number of accounts with debit balances equals the number of accounts with credit balances. 
D) The total debits equal the total credits.

Question 20

The cash account of Grande Home Improvement Store shows the following: a debit on June 1 for $25,000; a credit on June 5 for $10,000,a debit on June 16 for $14,000,and a credit on June 27 for $8,000.What is the balance in the cash account at the end of June?

Accepted Answer

A) $39,000 debit. 
B) $21,000 debit. 
C) $18,000 credit. 
D) $21,000 credit. 
A) $39,000 debit. 
B) $21,000 debit. 
C) $18,000 credit. 
D) $21,000 credit.

Exam 3: The Accounting Cycle: Capturing Economic Events

Posting is the process of:

If a company purchases equipment on account:

A journal entry to recognize an expense must include:

Revenues increase owners' equity because:

If the number of debit entries in an account is greater than the number of credit entries,the account will have a debit balance.

All liability accounts normally have a credit balance.

The collection of accounts receivable is recorded by a:

The journal entry to record a particular business transaction includes a credit to a liability account.This transaction is most likely also to include:

The realization principle indicates that revenue usually should be recognized and recorded in the accounting records:

Brett Tarek,a manager at D&J Landscaping,Inc.needs information regarding the amount of accounts payable currently owed by the company.This information would most easily be found in the:

Dividends are an expense to a corporation and appear on the income statement.

If a company purchases equipment for cash:

A trial balance that balances provides proof that all transactions were correctly journalized and posted to the ledger.

In its simplest form an account has only three elements: a title,a left side (called debit),and a right side (called credit).

Revenues increase owners' equity and are,therefore,recorded by crediting the revenues account.

Which of the following accounts normally does not have a debit balance?

The left-hand side of an account is used for recording debits and the right-hand side for recording credits.

The agreement of the debit and credit totals of the trial balance gives assurance that:

The cash account of Grande Home Improvement Store shows the following: a debit on June 1 for $25,000; a credit on June 5 for $10,000,a debit on June 16 for $14,000,and a credit on June 27 for $8,000.What is the balance in the cash account at the end of June?

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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