Deck 2: Analyzing Transactions

Question 1

The T account got its name because it resembles the letter "T."

Answer 1

True

Question 2

A credit to the cash account will increase the account.

Answer 2

False

Question 3

Consuming goods and services in the process of generating revenues results in expenses.

Answer 3

True

Question 4

The Unearned Revenues account is an example of a liability.

Question 5

Prepaid expenses are an example of an expense.

Question 6

Accounts are records of increases and decreases in individual accounting equation elements.

Question 7

Debiting the cash account will increase the account.

Question 8

The right hand side of a T account is known as a debit and the left hand side is known as a credit.

Question 9

Depending on the account title,the right side of the account is referred to as the credit side.

Question 10

The recording of cash payments from the cash account is done by entering the amount as a credit.

Question 11

A chart of accounts is a listing of accounts that make up the journal.

Question 12

The recording of cash receipts to the cash account will be done by debiting the account.

Question 13

To determine the balance in an account,always subtract credits from debits.

Question 14

Accounts payable are accounts that you expect will be paid to you.

Question 15

The balance of the account can be determined by adding all of the debits,adding all of the credits,and adding the amounts together.

Question 16

The chart of accounts should be the same for each business.

Question 17

An account in its simplest form has three parts to it: a title,an increase side,and a decrease side.

Question 18

Accounts in the ledger are usually maintained in alphabetical order.

Question 19

The Dividends account is an expense.

Question 20

The cash account will always be debited.

Question 21

Revenues are equal to the difference between cash receipts and cash payments.

Question 22

When a business receives a bill from the utility company,no entry should be made until the invoice is paid.

Question 23

Liabilities are debts owed by the business entity.

Question 24

When an account receivable is collected in cash,the total assets of the business increase.

Question 25

The normal balance of the dividends account is a debit.

Question 26

Dividends decrease stockholders' equity and are listed on the income statement as a deduction from revenue.

Question 27

The normal balance of an expense account is a credit.

Question 28

When an owner invests assets in the business,the retained earnings account increases due to revenue being earned.

Question 29

Expenses result from selling services or products to customers.

Question 30

A debit is abbreviated as Db.and a credit is abbreviated as Cr.

Question 31

The accounts payable account is listed in the chart of accounts as an asset.

Question 32

Revenue accounts are increased by credits.

Question 33

Expense accounts are increased by credits.

Question 34

When an account payable is paid with cash,the stockholders' equity in the business decreases.

Question 35

For a month's transactions for a typical medium-sized business,the accounts payable account is likely to have only credit entries.

Question 36

A dividends account represents the amount of earnings paid to the stockholders.

Question 37

For a month's transactions for a typical medium-sized business,the salary expense account is likely to have only credit entries.

Question 38

Liability accounts are increased by debits.

Question 39

The normal balance of revenue accounts is a credit.

Question 40

Stockholders' equity is reduced by the amount in the dividends account.

Question 41

Transactions are initially entered into a record called a journal.

Question 42

Normal account balances are on the increase side of the accounts.

Question 43

The post reference notation used in the ledger is the account number.

Question 44

The double-entry accounting system records each transaction twice.

Question 45

The post reference notation used in the journal is the page number.

Question 46

A transaction that is recorded in the journal is called a journal entry.

Question 47

The process of transferring the data from the journal to the ledger accounts is called posting.

Question 48

Journal entries can have more than two accounts as long as the debits equal the credits.

Question 49

Assets are increased with debits and decreased with credits.

Question 50

The increase side of an account is also the side of the normal balance.

Question 51

Liabilities are increased with debits and decreased with credits.

Question 52

Journalizing always eliminates fraudulent activity.

Question 53

A notation in the post reference column of the general journal indicates that the amount has been posted to the ledger.

Question 54

Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

Question 55

Journal entries include both debit and credit accounts for each transaction.

Question 56

Journalizing is the process of entering amounts in the ledger.

Question 57

The process of recording a transaction in the journal is called journalizing.

Question 58

Transactions are listed in the journal chronologically.

Question 59

All stockholders' equity accounts record increases to the accounts with credits.

Question 60

Debits will increase unearned revenues and revenues.

Question 61

The erroneous moving of an entire number one or more spaces to the right or left,such as writing $85 as $850,is called a transposition.

Question 62

Which side of the account increases the cash account?

A) credit
B) neither a debit nor a credit
C) debit
D) either a debit or a credit

Question 63

Journalizing a transaction with both the debit and the credit for $69 instead of $96 will cause the trial balance to be out of balance.

Question 64

Accounts

A) do not reflect money amounts
B) are not used by entities that manufacture products
C) are records of increases and decreases in individual accounting equation elements
D) are only used by large entities with many transactions

Question 65

Even when a trial balance is in balance,there may be errors in the individual accounts.

Question 66

The erroneous arrangement of digits,such as writing $45 as $54,is called a slide.

Question 67

The process of transferring the debits and credits from the journal entries to the accounts is known as posting.

Question 68

Postings made to standard account forms show a new balance after each entry.

Question 69

The increases in stockholders' equity attributable to selling services or products to customers are called

A) assets
B) liabilities
C) revenues
D) expenses

Question 70

A chart of accounts is

A) the same as a balance sheet
B) usually a listing of accounts in alphabetical order
C) usually a listing of accounts in financial statement order
D) used in place of a ledger

Question 71

The totals at the bottom of the trial balance and the totals at the bottom of the balance sheet both show equality and balancing,and therefore should be equal.

Question 72

A trial balance determines the complete accuracy of the numbers.

Question 73

If the trial balance is in balance,it can be assumed that all journal entries were posted correctly and no errors were made.

Question 74

Which of the following accounts is a stockholders' equity account?

A) Cash
B) Accounts Payable
C) Prepaid Insurance
D) Common Stock

Question 75

The order of the flow of accounting data is (1)record in the ledger,(2)record in the journal,(3)prepare the financial statements.

Question 76

The debit side of an account

A) depends on whether the account is an asset,liability,or stockholders' equity
B) can be either side of the account depending on how the accountant set up the system
C) is the right side of the account
D) is the left side of the account

Question 77

Accounts are classified in the ledger

A) chronologically
B) alphabetically
C) in accordance with their appearance in the financial statements
D) with the accounts used most often listed first

Question 78

A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a balance sheet.

Question 79

An account is said to have a debit balance if

A) the amount of the debits exceeds the amount of the credits
B) there are more entries on the debit side than on the credit side
C) there are more entries on the credit side than on the debit side
D) the first entry of the accounting period was posted on the debit side

Question 80

Posting a part of a transaction to the wrong account will cause the trial balance totals to be unequal.