Deck 2: Analyzing Transactions

Question 1

To determine the balance in a prepaid expense account,subtract credits from debits.

Answer 1

False

Question 2

Debiting the cash account will increase the account.

Answer 2

True

Question 3

The dividends account is an example of an expense.

Answer 3

False

Question 4

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

Question 5

A credit to the cash account will increase the account.

Question 6

The cash account will always be debited

Question 7

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

Question 8

Accounts in the ledger are usually maintained in alphabetical order.

Question 9

An account has three parts to it;a title,an increase side,and a decrease side.

Question 10

Accounts are records of increases and decreases in individual financial statement items.

Question 11

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

Question 12

The unearned revenues account is an example of a liability.

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

Prepaid expenses are an example of an expense.

Question 20

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

Question 21

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

Question 22

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

Question 23

Journalizing is the process of entering amounts in the ledger.

Question 24

Transactions are listed in the journal chronologically.

Question 25

Retained earnings will be reduced by the amount in the dividends account.

Question 26

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

Question 27

The increase side of all accounts is the normal balance.

Question 28

When a company issues new shares of stock,the capital stock account increases due to revenue being earned.

Question 29

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

Question 30

Expense accounts are increased by credits.

Question 31

Liability accounts are increased by debits.

Question 32

Revenue accounts are increased by credits.

Question 33

Transactions are initially entered into a record called a journal.

Question 34

Expenses use up assets or consume services in the process of generating revenues.

Question 35

The double-entry accounting system records each transaction twice.

Question 36

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

Question 37

Journalizing eliminates fraud.

Question 38

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

Question 39

When an accounts payable account is paid in cash,company expenses increase.

Question 40

Liabilities are debts owed by the business entity.

Question 41

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

Question 42

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

Question 43

The normal balance of revenue accounts is a credit.

Question 44

The normal balance of a capital stock account is a debit.

Question 45

Assets are increased with debits and decreased with credits.

Question 46

The journal includes both debit and credit accounts for each transaction.

Question 47

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

Question 48

Dividends decrease retained earnings and are listed on the income statement as a deduction from revenue.

Question 49

Debits will increase Unearned Revenues and Revenues.

Question 50

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

Question 51

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

Question 52

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

Question 53

The normal balance of an expense account is a credit.

Question 54

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

Question 55

Normal balances appear on the side that increases the account balance.

Question 56

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

Question 57

The normal balance of the dividends account is a debit.

Question 58

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

Question 59

Retained earnings account increases with debits.

Question 60

Liabilities are increased with debits and decreased with credits.

Question 61

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

Question 62

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 63

Accounts are classified in the ledger

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

Question 64

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 65

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

Question 66

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 67

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 financial statement items
D)are only used by large entities with many transactions

Question 68

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

Question 69

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 70

Posting a transaction twice will cause the trial balance totals to be equal.

Question 71

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 72

A trial balance determines the accuracy of the numbers.

Question 73

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

Question 74

A group of related accounts that make up a complete unit is called a trial balance.

Question 75

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

A)Cash
B)Accounts Payable
C)Prepaid Insurance
D)Dividends

Question 76

Once journal entries are posted to accounts,each account will show a new balance after each entry.

Question 77

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

Question 78

The gross increases in retained earnings attributable to business activities are called

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

Question 79

Revenue should be recognized when

A)cash is received
B)the service is performed
C)the customer places an order
D)the customer charges an order

Question 80

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