Question 1

The right side of an account is

Accepted Answer

A)  always used to record increases.
B)  the credit side.
C)  the debit side.
D)  always used to record decreases.

Question 2

Revenue is only recorded when cash is received.

Accepted Answer

A) True 
 B)False

Question 3

An increase in an asset is recorded by a debit.

Accepted Answer

A) True 
 B)False  True

Question 4

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.

Question 5

Which of the following journal entries is recorded correctly in the basic format (ignoring explanations)?

Accepted Answer

The answer of Which of the following journal entries is...

Question 6

Transactions recorded in a journal are done in

Accepted Answer

A)  account number order.
B)  financial statement order.
C)  alphabetical order.
D)  chronological order.

Question 7

A trial balance proves

Accepted Answer

A)  the mathematical equality of debits and credits in the ledger.
B)  the ledger is posted correctly.
C)  that all transactions have been recorded correctly.
D)  that all transactions have been posted.

Question 8

An accountant has debited an asset account for $3,000 and credited a revenue account for $6,000.What can be done to complete the recording of the transaction?

Accepted Answer

A)  Nothing further can be done.
B)  Credit a shareholders' equity account for $3,000.
C)  Debit another asset account for $3,000.
D)  Credit another asset account for $3,000.

Question 9

A debit is not the normal balance for which account listed below?

Accepted Answer

A)  Dividends
B)  Cash
C)  Accounts Receivable
D)  Service Revenue

Question 10

The sequence of steps in the transaction recording process is

Accepted Answer

A)  journal  →\rightarrow→  analyze  →\rightarrow→  ledger.
B)  analyze  →\rightarrow→  journal  →\rightarrow→  ledger.
C)  journal  →\rightarrow→  ledger  →\rightarrow→  analyze.
D)  ledger  →\rightarrow→  journal  →\rightarrow→  analyze.

Question 11

The first step in the recording process is to

Accepted Answer

A)  prepare financial statements.
B)  analyze the transaction in terms of its effect on the accounts.
C)  post to a journal.
D)  post to the ledger.

Question 12

The chart of accounts is a special ledger used in accounting systems.

Accepted Answer

A) True 
 B)False

Question 13

The chart of accounts begins with

Accepted Answer

A)  asset accounts.
B)  liability accounts.
C)  revenue accounts.
D)  expense accounts.

Question 14

Collection of an account receivable will increase total assets.

Accepted Answer

A) True 
 B)False

Question 15

A decrease in a liability account is recorded by a debit.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Recording revenue

Accepted Answer

A)  increases assets and liabilities.
B)  increases assets and shareholders' equity.
C)  increases assets and decreases shareholders' equity.
D)  has no effect on total assets. B

Question 18

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)  will always increase shareholders' equity.
D)  must be accompanied by a debit to an asset account.

Question 19

The principal purpose of posting is to

Accepted Answer

A)  help identify errors made in the journal.
B)  accumulate the effects of journalized transactions in the individual accounts.
C)  enter transactions directly into the general ledger.
D)  help determine if the financial statements are ready to be prepared.

Question 20

When a company receives a utility bill but will not pay it right away, it should

Accepted Answer

A)  debit Utilities Expense and credit Accounts Receivable.
B)  debit Utilities Expense and credit Accounts Payable.
C)  debit Accounts Payable and credit Utilities Expense.
D)  make no entry until the bill is paid. B

Exam 3: The Accounting Information System

The right side of an account is

Correct AnswerverifiedShow Answer

Revenue is only recorded when cash is received.

Correct AnswerverifiedShow Answer

An increase in an asset is recorded by a debit.

Correct AnswerverifiedTrue

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

Correct AnswerverifiedShow Answer

Which of the following journal entries is recorded correctly in the basic format (ignoring explanations)?

Correct AnswerverifiedShow Answer

Transactions recorded in a journal are done in

Correct AnswerverifiedShow Answer

A trial balance proves

Correct AnswerverifiedShow Answer

An accountant has debited an asset account for $3,000 and credited a revenue account for $6,000.What can be done to complete the recording of the transaction?

Correct AnswerverifiedShow Answer

A debit is not the normal balance for which account listed below?

Correct AnswerverifiedShow Answer

The sequence of steps in the transaction recording process is

Correct AnswerverifiedShow Answer

The first step in the recording process is to

Correct AnswerverifiedShow Answer

The chart of accounts is a special ledger used in accounting systems.

Correct AnswerverifiedShow Answer

The chart of accounts begins with

Correct AnswerverifiedShow Answer

Collection of an account receivable will increase total assets.

Correct AnswerverifiedShow Answer

A decrease in a liability account is recorded by a debit.

Correct AnswerverifiedShow Answer

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

Recording revenue

Correct AnswerverifiedB

A credit to a liability account

Correct AnswerverifiedShow Answer

The principal purpose of posting is to

Correct AnswerverifiedShow Answer

When a company receives a utility bill but will not pay it right away, it should

Correct AnswerverifiedB

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True

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B

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B