Question 1

A journal is also known as a book of original entry.

Accepted Answer

A) True 
 B)False  True

Question 2

The normal balance of any account is the

Accepted Answer

A)   left side.
B)   right side.
C)   side which increases that account.
D)   side which decreases that account.

Question 3

A list of accounts and their balances at a given time is called a(n)

Accepted Answer

A)   journal.
B)   posting.
C)   trial balance.
D)   income statement.

Question 4

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to

Accepted Answer

A)   the company's bank.
B)   stockholders' equity.
C)   ledger accounts.
D)   financial statements.

Question 5

Customarily, a trial balance is prepared

Accepted Answer

A)   at the end of each day.
B)   after each journal entry is posted.
C)   at the end of an accounting period.
D)   only at the inception of the business.

Question 6

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 7

Transactions are recorded in alphabetic order in a journal.

Accepted Answer

A) True 
 B)False

Question 8

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.

Question 9

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 10

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.

Question 11

Business documents can provide evidence that a transaction has occurred.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)   Asset account
B)   Dividends account
C)   Expense account
D)   Common stock account

Question 13

An account is often referred to as a T-account because of the way it is constructed.

Accepted Answer

A) True 
 B)False  True

Question 14

TransAm Mail Service purchased equipment for $2,500. TransAm paid $400 in cash and signed a note for the balance. TransAm debited the Equipment account, credited Cash and

Accepted Answer

A)   nothing further must be done.
B)   debited the retained earnings account for $2,100.
C)   credited another asset account for $400.
D)   credited a liability account for $2,100. D

Question 15

A simple journal entry requires only one debit to an account and one credit to an account.

Accepted Answer

A) True 
 B)False

Question 16

On June 1, 2015, Portugal Inc. reported a cash balance of $12,000. During June, Portugal made deposits of $5,000 and made disbursements totalling $14,000. What is the cash balance at the end of June?

Accepted Answer

A)   $3,000 debit balance
B)   $17,000 debit balance
C)   $3,000 credit balance
D)   $2,000 credit balance

Question 17

A numbering system for a chart of accounts

Accepted Answer

A)   is prescribed by GAAP.
B)   is uniform for all businesses.
C)   usually starts with income statement accounts.
D)   usually starts with balance sheet accounts.

Question 18

The ledger should be arranged in

Accepted Answer

A)   alphabetical order.
B)   chronological order.
C)   dollar amount order.
D)   financial statement order.

Question 19

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 20

European companies rely

Accepted Answer

A)   less on historical cost and more on fair values than U.S. companies.
B)   less on fair values and more on historical cost than U.S. companies.
C)   completely on fair values for financial reporting.
D)   completely on historical cost for financial reporting.

Exam 2: The Recording Process

A journal is also known as a book of original entry.

Correct AnswerverifiedTrue

The normal balance of any account is the

Correct AnswerverifiedShow Answer

A list of accounts and their balances at a given time is called a(n)

Correct AnswerverifiedShow Answer

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to

Correct AnswerverifiedShow Answer

Customarily, a trial balance is prepared

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

Transactions are recorded in alphabetic order in a journal.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A credit to a liability account

Correct AnswerverifiedShow Answer

A journal provides

Correct AnswerverifiedShow Answer

Business documents can provide evidence that a transaction has occurred.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An account is often referred to as a T-account because of the way it is constructed.

Correct AnswerverifiedTrue

TransAm Mail Service purchased equipment for $2,500. TransAm paid $400 in cash and signed a note for the balance. TransAm debited the Equipment account, credited Cash and

Correct AnswerverifiedD

A simple journal entry requires only one debit to an account and one credit to an account.

Correct AnswerverifiedShow Answer

On June 1, 2015, Portugal Inc. reported a cash balance of $12,000. During June, Portugal made deposits of $5,000 and made disbursements totalling $14,000. What is the cash balance at the end of June?

Correct AnswerverifiedShow Answer

A numbering system for a chart of accounts

Correct AnswerverifiedShow Answer

The ledger should be arranged in

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

European companies rely

Correct AnswerverifiedShow Answer

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D

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