Question 1

The standard form of a journal entry has the

Accepted Answer

A)  debit account entered first and indented.
B)  credit account entered first and indented.
C)  debit account entered first at the extreme left margin.
D)  credit account entered first at the extreme left margin.

Question 2

The recording process becomes more efficient and informative if all transactions are recorded in one account.

Accepted Answer

A) True 
 B)False

Question 3

Which account below is not a subdivision of retained earnings?

Accepted Answer

A)  Dividends
B)  Revenues
C)  Expenses
D)  Common stock

Question 4

The usual sequence of steps in the recording process is to analyze each transaction, enter the transaction in the

Accepted Answer

A)  journal, and transfer the information to the ledger accounts.
B)  ledger, and transfer the information to the journal.
C)  book of accounts, and transfer the information to the journal.
D)  book of original entry, and transfer the information to the journal.

Question 5

An account will have a credit balance if the

Accepted Answer

A)  credits exceed the debits.
B)  first transaction entered was a credit.
C)  debits exceed the credits.
D)  last transaction entered was a credit.

Question 6

The Dividends account

Accepted Answer

A)  appears on the income statement along with the expenses of the business.
B)  must show transactions every accounting period.
C)  is increased with debits and decreased with credits.
D)  is not a proper subdivision of retained earnings.

Question 7

The ledger is merely a bookkeeping device and therefore does not provide much useful data for management.

Accepted Answer

A) True 
 B)False

Question 8

If a revenue account is credited, the revenue account is increased.

Accepted Answer

A) True 
 B)False

Question 9

At January 31, 2015, the balance in Aislers Inc.'s supplies account was $750. During February, Aislers purchased supplies of $900 and used supplies of $1,125. At the end of February, the balance in the supplies account should be

Accepted Answer

A)  $525 debit.
B)  $975 debit.
C)  $525 credit.
D)  $775 debit.

Question 10

A trial balance would only help in detecting which one of the following errors?

Accepted Answer

A)  A transaction that is not journalized
B)  A journal entry that is posted twice
C)  Offsetting errors are made in recording the transaction
D)  A transposition error when transferring the debit side of journal entry to the ledger

Question 11

In deciding whether the U.S. should adopt IFRS, the issue the SEC said should be considered is

Accepted Answer

A)  whether IFRS is sufficiently developed and consistent in application.
B)  whether the IFRS is established for the benefit of investors.
C)  the impact of a switch to IFRS on U.S.laws and regulations.
D)  all of these answers are correct.

Question 12

The first step in designing a computerized accounting system is the creation of the

Accepted Answer

A)  general ledger.
B)  general journal.
C)  trial balance.
D)  chart of accounts.

Question 13

Which of the following are the same under both GAAP and IFRS?

Accepted Answer

A)  The journal.
B)  The ledger.
C)  The chart of accounts.
D)  All of these answers are correct.

Question 14

The entire group of accounts maintained by a company is called the

Accepted Answer

A)  chart of accounts.
B)  general journal.
C)  general ledger.
D)  trial balance.

Question 15

An account is a part of the financial information system and is described by all except which one of the following?

Accepted Answer

A)  An account has a debit and credit side.
B)  An account is a source document.
C)  An account may be part of a manual or a computerized accounting system.
D)  An account has a title.

Question 16

During February 2015 its first month of operations, the stockholders of Ariel Pink Enterprises invested cash of $50,000. Ariel had cash revenues of $10,000 and paid expenses of $14,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

Accepted Answer

A)  $4,000 credit
B)  $4,000 debit
C)  $46,000 debit
D)  $54,000 debit

Question 17

Delta72 Company received a cash advance of $700 from a customer. As a result of this event,

Accepted Answer

A)  assets increased by $700.
B)  stockholders' equity increased by $700.
C)  liabilities decreased by $700.
D)  assets and stockholders' equity increased by $700.

Question 18

When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers.

Accepted Answer

A) True 
 B)False

Question 19

A credit to a liability account

Accepted Answer

A)  indicates an increase in the amount owed to creditors.
B)  indicates a decrease in the amount owed to creditors.
C)  is an error.
D)  must be accompanied by a debit to an asset account.

Question 20

Which of the following are the same under both GAAP and IFRS?

Accepted Answer

A)  The account.
B)  Debit and credit rules.
C)  Steps in the recording process.
D)  All of these answers are correct.

Exam 2: The Recording Process

The usual sequence of steps in the recording process is to analyze each transaction, enter the transaction in the

Correct AnswerverifiedShow Answer

A trial balance would only help in detecting which one of the following errors?

Correct AnswerverifiedShow Answer

A credit to a liability account

Correct AnswerverifiedShow Answer

The entire group of accounts maintained by a company is called the

Correct AnswerverifiedShow Answer

An account is a part of the financial information system and is described by all except which one of the following?

Correct AnswerverifiedShow Answer

The ledger is merely a bookkeeping device and therefore does not provide much useful data for management.

Correct AnswerverifiedShow Answer

During February 2015 its first month of operations, the stockholders of Ariel Pink Enterprises invested cash of $50,000. Ariel had cash revenues of $10,000 and paid expenses of $14,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

Correct AnswerverifiedShow Answer

The standard form of a journal entry has the

Correct AnswerverifiedShow Answer

Which account below is not a subdivision of retained earnings?

Correct AnswerverifiedShow Answer

The Dividends account

Correct AnswerverifiedShow Answer

At January 31, 2015, the balance in Aislers Inc.'s supplies account was $750. During February, Aislers purchased supplies of $900 and used supplies of $1,125. At the end of February, the balance in the supplies account should be

Correct AnswerverifiedShow Answer

In deciding whether the U.S. should adopt IFRS, the issue the SEC said should be considered is

Correct AnswerverifiedShow Answer

Delta72 Company received a cash advance of $700 from a customer. As a result of this event,

Correct AnswerverifiedShow Answer

An account will have a credit balance if the

Correct AnswerverifiedShow Answer

The first step in designing a computerized accounting system is the creation of the

Correct AnswerverifiedShow Answer

If a revenue account is credited, the revenue account is increased.

Correct AnswerverifiedShow Answer

Which of the following are the same under both GAAP and IFRS?

Correct AnswerverifiedShow Answer

When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers.

Correct AnswerverifiedShow Answer

The recording process becomes more efficient and informative if all transactions are recorded in one account.

Correct AnswerverifiedShow Answer

Which of the following are the same under both GAAP and IFRS?

Correct AnswerverifiedShow Answer

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