Deck 2: Analyzing Transactions

Question 1

The chart of accounts should be the same for each business.

Answer 1

False

Question 2

A chart of accounts is a listing of accounts that make up the journal.

Answer 2

False

Question 3

The balance of the account can be determined by adding all of the debits, adding all of the credits, and adding the amounts together.

Answer 3

False

Question 4

The recording of cash receipts to the cash account will be done by debiting the account.

Question 5

Accounts in the ledger are usually maintained in alphabetical order.

Question 6

Accounts payable are accounts that you expect will be paid to you.

Question 7

The right side of a T account is known as a debit and the left side is known as a credit.

Question 8

The cash account will always be debited.

Question 9

Prepaid expenses are an example of an expense.

Question 10

Accounts are records of increases and decreases in individual accounting equation elements.

Question 11

Debiting the cash account will increase the account.

Question 12

Consuming goods and services in the process of generating revenues results in expenses.

Question 13

An account in its simplest form has three parts to it: a title, an increase side, and a decrease side.

Question 14

The recording of cash payments from the cash account is done by entering the amount as a credit.

Question 15

The Unearned Revenues account is an example of a liability.

Question 16

To determine the balance in an account, always subtract credits from debits.

Question 17

The Dividends account is an expense.

Question 18

A credit to the cash account will increase the account.

Question 19

The T account got its name because it resembles the letter "T."

Question 20

Depending on the account title, the right side of the account is referred to as the credit side.

Question 21

The normal balance of the dividends account is a debit.

Question 22

Liability accounts are increased by debits.

Question 23

When an account receivable is collected in cash, the total assets of the business increase.

Question 24

When a business receives a bill from the utility company, no entry should be made until the invoice is paid.

Question 25

A dividends account represents the amount of earnings paid to the stockholders.

Question 26

Revenue accounts are increased by credits.

Question 27

When an owner invests assets in the business, the retained earnings account increases due to revenue being earned.

Question 28

For a month's transactions for a typical medium-sized business, the accounts payable account is likely to have only credit entries.

Question 29

Revenues are equal to the difference between cash receipts and cash payments.

Question 30

Liabilities are debts owed by the business entity.

Question 31

Expenses result from selling services or products to customers.

Question 32

The accounts payable account is listed in the chart of accounts as an asset.

Question 33

Dividends decrease stockholders' equity and are listed on the income statement as a deduction from revenue.

Question 34

Expense accounts are increased by credits.

Question 35

A debit is abbreviated as Db. and a credit is abbreviated as Cr.

Question 36

When an account payable is paid with cash, the stockholders' equity in the business decreases.

Question 37

The normal balance of revenue accounts is a credit.

Question 38

Stockholders' equity is reduced by the amount in the dividends account.

Question 39

For a month's transactions for a typical medium-sized business, the salary expense account is likely to have only credit entries.

Question 40

The normal balance of an expense account is a credit.

Question 41

The post reference notation used in the journal is the page number.

Question 42

Journal entries include both debit and credit accounts for each transaction.

Question 43

A transaction that is recorded in the journal is called a journal entry.

Question 44

The increase side of an account is also the side of the normal balance.

Question 45

A notation in the post reference column of the general journal indicates that the amount has been posted to the ledger.

Question 46

Assets are increased with debits and decreased with credits.

Question 47

The process of transferring the data from the journal to the ledger accounts is called posting.

Question 48

The process of recording a transaction in the journal is called journalizing.

Question 49

The post reference notation used in the ledger is the account number.

Question 50

The order of the flow of accounting data is (1) record in the ledger, (2) record in the journal, (3) prepare the financial statements.

Question 51

Transactions are listed in the journal chronologically.

Question 52

Debits will increase unearned revenues and revenues.

Question 53

The double-entry accounting system records each transaction twice.

Question 54

Transactions are initially entered into a record called a journal.

Question 55

All stockholders' equity accounts record increases to the accounts with credits.

Question 56

Journalizing always eliminates fraudulent activity.

Question 57

Journalizing is the process of entering amounts in the ledger.

Question 58

Journal entries can have more than two accounts as long as the debits equal the credits.

Question 59

Liabilities are increased with debits and decreased with credits.

Question 60

Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

Question 61

Even when a trial balance is in balance, there may be errors in the individual accounts.

Question 62

Postings made to standard account forms show a new balance after each entry.

Question 63

The erroneous moving of an entire number one or more spaces to the right or left, such as writing $85 as $850, is called a transposition.

Question 64

Journalizing a transaction with both the debit and the credit for $69 instead of $96 will cause the trial balance to be out of balance.

Question 65

Which side of the account increases the cash account?

A)credit
B)neither a debit nor a credit
C)debit
D)either a debit or a credit

Question 66

The process of transferring the debits and credits from the journal entries to the accounts is known as posting.

Question 67

The erroneous arrangement of digits, such as writing $45 as $54, is called a slide.

Question 68

Accounts

A)do not reflect money amounts
B)are not used by entities that manufacture products
C)are records of increases and decreases in individual accounting equation elements
D)are only used by large entities with many transactions

Question 69

Posting a part of a transaction to the wrong account will cause the trial balance totals to be unequal.

Question 70

A trial balance determines the complete accuracy of the numbers.

Question 71

Accounts are classified in the ledger

A)chronologically
B)alphabetically
C)in accordance with their appearance in the financial statements
D)with the accounts used most often listed first

Question 72

The totals at the bottom of the trial balance and the totals at the bottom of the balance sheet both show equality and balancing, and therefore should be equal.

Question 73

Which of the following accounts is a stockholders' equity account?

A)Cash
B)Accounts Payable
C)Prepaid Insurance
D)Common Stock

Question 74

The increases in stockholders' equity attributable to selling services or products to customers are called

A)assets
B)liabilities
C)revenues
D)expenses

Question 75

The debit side of an account

A)depends on whether the account is an asset, liability, or stockholders' equity
B)can be either side of the account depending on how the accountant set up the system
C)is the right side of the account
D)is the left side of the account

Question 76

An account is said to have a debit balance if

A)the amount of the debits exceeds the amount of the credits
B)there are more entries on the debit side than on the credit side
C)there are more entries on the credit side than on the debit side
D)the first entry of the accounting period was posted on the debit side

Question 77

If the trial balance is in balance, it can be assumed that all journal entries were posted correctly and no errors were made.

Question 78

Which statement(s) concerning cash is (are) true?

A)cash will always have more debits than credits
B)cash will never have a credit balance
C)cash is increased with a debit
D)all are true

Question 79

A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a balance sheet.

Question 80

A chart of accounts is

A)the same as a balance sheet
B)usually a listing of accounts in alphabetical order
C)usually a listing of accounts in financial statement order
D)used in place of a ledger