Question 1

The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

Accepted Answer

A) True 
 B)False

Question 2

On June 1, 2011 Quang Le buys a copier machine for his business and finances this purchase with cash and a note.When journalizing this transaction, he will

Accepted Answer

A)  use two journal entries.
B)  make a compound entry.
C)  make a simple entry.
D)  list the credit entries first, which is proper form for this type of transaction.E) A) and D)
F) A) and C) B

Question 3

Which of the following accounts is reported in the equity section of the statement of financial position?

Accepted Answer

A)  Dividends.
B)  Share capital-ordinary.
C)  Revenues
D)  All of the choices are reported in the equity section of the statement of financial position.E) None of the above
F) A) and B)

Question 4

Accounts maintained within the ledger that appear on the statement of financial position include all of the following except

Accepted Answer

A)  Salaries Expense.
B)  Interest Payable.
C)  Supplies.
D)  Share Capital-Ordinary.E) A) and B)
F) None of the above

Question 5

Transactions in a journal are initially recorded in

Accepted Answer

A)  account number order.
B)  dollar amount order.
C)  alphabetical order.
D)  chronological order.E) A) and B)
F) A) and C)

Question 6

Transactions are entered in the ledger accounts and then transferred to journals.

Accepted Answer

A) True 
 B)False

Question 7

An account is an individual accounting record of increases and decreases in specific

Accepted Answer

A)  liabilities.
B)  assets.
C)  expenses.
D)  assets, liabilities, and equity items.E) All of the above
F) B) and D)

Question 8

During February 2011, its first month of operations, the owner of Alona Enterprises invested cash of $50,000.Alona had cash revenues of $8,000 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)  $6,000 credit
B)  $44,000 debit
C)  $58,000 debit
D)  $36,000 creditE) A) and C)
F) A) and B)

Question 9

The normal balance of an expense is a credit.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statement is true regarding the recording process?

Accepted Answer

A)  Because IFRS rely more on fair value and less on historical cost than U.S.GAAP the double-entry accounting system is not widely used by companies who use IFRS.
B)  Both IFRS and U.S.GAAP, use the same general rules of debits and credits and the steps in the recording process.
C)  A trial balance using IFRS is organised by first showing the accounts from the statement of financial position followed by accounts from the income statement; a trial balance using U.S.GAAP is organized using the opposite order.
D)  All of the choices are correct regarding the recording process.E) C) and D)
F) A) and D)

Question 11

Which of the following is not true of the terms debit and credit?

Accepted Answer

A)  They can be abbreviated as Dr.and Cr.
B)  They can be interpreted to mean increase and decrease.
C)  They can be used to describe the balance of an account.
D)  They can be interpreted to mean left and right.E) B) and C)
F) C) and D)

Question 12

On July 7, 2011, Anaya Enterprises performed cash services of $1,400.The entry to record this transaction would include

Accepted Answer

A)  a debit to Service Revenue of $1,400.
B)  a credit to Accounts Receivable of $1,400.
C)  a debit to Cash of $1,400.
D)  a credit to Accounts Payable of $1,400.E) All of the above
F) B) and D)

Question 13

A journal provides

Accepted Answer

A)  the balances for each account.
B)  information about a transaction in several different places.
C)  a list of all accounts used in the business.
D)  a chronological record of transactions.E) None of the above
F) All of the above D

Question 14

Which one of the following is not a part of an account?

Accepted Answer

A)  Credit side
B)  Trial balance
C)  Debit side
D)  TitleE) A) and B)
F) All of the above

Question 15

The primary purpose of a trial balance is to prove the mathematical equality of the debits and credits after posting.

Accepted Answer

A) True 
 B)False

Question 16

Errors on the statement of financial position are called transpositions and errors on the income statement are called irregularities.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is true?

Accepted Answer

A)  Debits increase assets and increase liabilities.
B)  Credits decrease assets and decrease liabilities.
C)  Credits decrease assets and increase liabilities.
D)  Debits decrease liabilities and decrease assets.E) None of the above
F) A) and C)

Question 18

In the first month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $600.The cash account has a(n)

Accepted Answer

A)  $600 credit balance.
B)  $900 debit balance.
C)  $300 debit balance.
D)  $300 credit balance.E) All of the above
F) B) and D) C

Question 19

When a company pays dividends

Accepted Answer

A)  it doesn't have to be cash, it could be another asset.
B)  the dividends account will be increased with a credit.
C)  the retained earnings account will be directly increased with a debit.
D)  the dividends account will be decreased with a debit.E) C) and D)
F) B) and C)

Question 20

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 ledgerE) A) and D)
F) A) and C)

Exam 2: The Recording Process

The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

Correct AnswerverifiedShow Answer

On June 1, 2011 Quang Le buys a copier machine for his business and finances this purchase with cash and a note.When journalizing this transaction, he will

Correct AnswerverifiedB

Which of the following accounts is reported in the equity section of the statement of financial position?

Correct AnswerverifiedShow Answer

Accounts maintained within the ledger that appear on the statement of financial position include all of the following except

Correct AnswerverifiedShow Answer

Transactions in a journal are initially recorded in

Correct AnswerverifiedShow Answer

Transactions are entered in the ledger accounts and then transferred to journals.

Correct AnswerverifiedShow Answer

An account is an individual accounting record of increases and decreases in specific

Correct AnswerverifiedShow Answer

During February 2011, its first month of operations, the owner of Alona Enterprises invested cash of $50,000.Alona had cash revenues of $8,000 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 normal balance of an expense is a credit.

Correct AnswerverifiedShow Answer

Which of the following statement is true regarding the recording process?

Correct AnswerverifiedShow Answer

Which of the following is not true of the terms debit and credit?

Correct AnswerverifiedShow Answer

On July 7, 2011, Anaya Enterprises performed cash services of $1,400.The entry to record this transaction would include

Correct AnswerverifiedShow Answer

A journal provides

Correct AnswerverifiedD

Which one of the following is not a part of an account?

Correct AnswerverifiedShow Answer

The primary purpose of a trial balance is to prove the mathematical equality of the debits and credits after posting.

Correct AnswerverifiedShow Answer

Errors on the statement of financial position are called transpositions and errors on the income statement are called irregularities.

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

In the first month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $600.The cash account has a(n)

Correct AnswerverifiedC

When a company pays dividends

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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B

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D

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C

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