Question 1

An account consists of

Accepted Answer

A)  a title, a debit balance, and a credit balance.
B)  a title, a left side, and a debit balance.
C)  a title, a debit side, and a credit side.
D)  a title, a right side, and a debit balance.E) C) and D)
F) A) and B)

Question 2

The recording process occurs

Accepted Answer

A)  once a year.
B)  once a month.
C)  repeatedly during the accounting period.
D)  infrequently in a manual accounting system.E) A) and D)
F) A) and C)

Question 3

During 2011, its first year of operations, Yaspo's Bakery had revenues of $80,000 and expenses of $44,000.The business paid dividends of $24,000.What is the amount of equity at December 31, 2011?

Accepted Answer

A)  $0
B)  $24,000 debit
C)  $12,000 credit
D)  $36,000 creditE) B) and D)
F) A) and C)

Question 4

Which of the following is incorrect regarding a trial balance?

Accepted Answer

A)  It proves that the debits equal the credits after posting.
B)  It proves that the company has recorded all transactions.
C)  A trial balance uncovers errors in journalizing and posting.
D)  A trial balance is useful in the preparation of financial statements.E) A) and C)
F) B) and C)

Question 5

If a company has overdrawn its bank balance, then

Accepted Answer

A)  its cash account will show a debit balance.
B)  its cash account will show a credit balance.
C)  the cash account debits will exceed the cash account credits.
D)  it cannot be detected by observing the balance of the cash account.E) All of the above
F) None of the above

Question 6

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 7

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

Accepted Answer

A) True 
 B)False

Question 8

All business transactions must be entered first in the general ledger.

Accepted Answer

A) True 
 B)False

Question 9

After a transaction has been posted, the reference column in the journal should not be blank.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

The complete effect of a transaction on the accounts is disclosed in the journal.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

Accepted Answer

A)  no errors have been made.
B)  no errors can be discovered.
C)  that all accounts reflect correct balances.
D)  the mathematical equality of the accounting equation.E) A) and B)
F) A) and C)

Question 14

Which of the following statements is not true?

Accepted Answer

A)  Expenses increase equity.
B)  Expenses have normal debit balances.
C)  Expenses decrease equity.
D)  Expenses are a negative factor in the computation of net income.E) A) and D)
F) None of the above

Question 15

When three or more accounts are required in one journal entry, the entry is referred to as a

Accepted Answer

A)  compound entry.
B)  triple entry.
C)  multiple entry.
D)  simple entry.E) C) and D)
F) B) and C)

Question 16

Compound entries

Accepted Answer

A)  Would include an entry to record the purchase of a computer for cash.
B)  Include at least two debits or two credits.
C)  Require that all credits be listed before the debits for entries affecting the statement of financial position.
D)  Should be broken into their component parts and recorded as simple entries.E) B) and D)
F) None of the above

Question 17

Posting of journal entries should be done in

Accepted Answer

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

Question 18

A debit is not the normal balance for which of the following?

Accepted Answer

A)  Asset account
B)  Dividends account
C)  Expense account
D)  Share capital-ordinary accountE) C) and D)
F) B) and C)

Question 19

The double-entry system requires that each transaction must be recorded

Accepted Answer

A)  in at least two different accounts.
B)  in two sets of books.
C)  in a journal and in a ledger.
D)  first as a revenue and then as an expense.E) C) and D)
F) A) and B)

Question 20

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

Accepted Answer

A)  cash register sales tape.
B)  bill.
C)  advertising brochure.
D)  check.E) A) and B)
F) A) and C)

Exam 2: The Recording Process

The complete effect of a transaction on the accounts is disclosed in the journal.

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If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

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When three or more accounts are required in one journal entry, the entry is referred to as a

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If a company has overdrawn its bank balance, then

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Which of the following is incorrect regarding a trial balance?

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The recording process occurs

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

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All business transactions must be entered first in the general ledger.

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An account consists of

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Compound entries

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A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

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Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

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Which of the following statements is not true?

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

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Posting of journal entries should be done in

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

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A debit is not the normal balance for which of the following?

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The double-entry system requires that each transaction must be recorded

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After a transaction has been posted, the reference column in the journal should not be blank.

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During 2011, its first year of operations, Yaspo's Bakery had revenues of $80,000 and expenses of $44,000.The business paid dividends of $24,000.What is the amount of equity at December 31, 2011?

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