Question 1

Which of the following accounts is increased by a debit?
A)Liability
B)Asset
C)Retained earnings
D)Revenue

Accepted Answer

The answer of Which of the following accounts is increased...

Question 2

Some events are NOT recorded in the accounting information system because
A)the service has been provided but the cash has not yet been received.
B)the service has not been provided but the cash has already been received.
C)their measurement is too complex.
D)the amounts are not material.

Accepted Answer

Events that are not recorded in the accounting information system are those whose measurement is too complex. These events may involve intangible assets, contingencies, and other difficult-to-measure items that cannot be easily quantified or reliably estimated, and therefore cannot be accurately recorded in the financial statements.

Question 3

The book (or electronic database)containing the accounts is called the
A)ledger.
B)transaction.
C)journal.
D)financial statement.

Accepted Answer

The answer of The book (or electronic database)containing the accounts...

Question 4

An example of a temporary account is
A)Unearned Revenue.
B)Salary Expense.
C)Inventory.
D)Retained Earnings.

Accepted Answer

The answer of An example of a temporary account is
A)Unearned...

Question 5

The account credited for a receipt of cash on account is
A)Cash.
B)Service Revenue.
C)Accounts Receivable.
D)Accounts Payable.

Accepted Answer

When cash is received on account, it means a customer is paying off their outstanding balance. The cash account is debited, and the accounts receivable account is credited to reflect the reduction in the amount owed by the customer.

Question 6

Which of the following is an internal event?
A)Sale of goods or services
B)Payment of dividends
C)Using raw materials in production
D)Purchase of materials

Accepted Answer

The answer of Which of the following is an internal...

Question 7

The IASB and FASB are currently working on a joint project to complete a common conceptual framework.According to the proposed (new)definition, which of the following would be considered assets?
A)accounts receivable, accounts payable, and patents
B)insurance contracts and accounts receivable
C)land, accounts receivable and unearned revenue
D)property, plant and equipment and constructive obligations

Accepted Answer

Accounts receivable and insurance contracts are considered assets as they represent resources controlled by the entity from which future economic benefits are expected to flow.

Question 8

Which of the following criteria does NOT have to be met before an event or transaction should be recorded for accounting purposes?
A)The event or transaction must be an external event.
B)The event or transaction can be measured objectively in financial terms.
C)The event or transaction is relevant and reliable.
D)The event or transaction must meet the definition of an element.

Accepted Answer

The requirement for an event or transaction to be an external event is not a necessary criterion for recording in accounting. Transactions can be both internal and external as long as they can be measured in financial terms, are relevant and reliable, and meet the definition of an element of the financial statements.

Question 9

The debit and credit analysis of a transaction normally takes place
A)before an entry is recorded in a journal.
B)when the entry is posted to the ledger.
C)when the trial balance is prepared.
D)when the financial statements are prepared.

Accepted Answer

The debit and credit analysis needs to take place before recording the entry in a journal. This analysis determines which accounts are affected and how they are affected, thereby ensuring accuracy in financial reporting.

Question 10

The IASB and FASB are currently working on a joint project to complete a common conceptual framework.Which of the following statements best describes the proposed (new) definition of an asset?
A)The asset must involve future economic resources and the entity has a right or access to
The resources, while others do not.
B)The asset must involve future economic resources and the resource must be freely
Available to all.
C)The asset must involve present economic resources and the entity has a right or access
To the resources, while others do not.
D)The asset must involve present economic resources and the resource must be freely
Available to all.

Accepted Answer

The proposed definition of an asset emphasizes that it involves present economic resources and that the entity has a right or access to these resources, while others do not.

Question 11

A trial balance will NOT balance if
A)an amount is posted to the wrong account.
B)a transaction has been entered twice.
C)a transaction has been omitted.
D)only the debit side of a journal entry has been posted.

Accepted Answer

The answer of A trial balance will NOT balance if
A)an...

Question 12

The IASB and FASB are currently working on a joint project to complete a common conceptual framework.According to the proposed (new)definition, which of the following would be considered liabilities?
A)accounts receivable and accounts payable
B)constructive obligations, long term leases and insurance contracts
C)accounts payable, unearned revenue, and copyrights
D)lawsuits - both settled and in progress

Accepted Answer

The answer of The IASB and FASB are currently working...

Question 13

A trial balance
A)is a list of all the accounts in the ledger.
B)is a list of all the accounts and their balances at a specific date.
C)cannot be used in the preparation of financial statements.
D)cannot be used as a basis for preparation of adjusting entries.

Accepted Answer

A trial balance is a list of all accounts and their balances at a specific date, typically the end of an accounting period. It is used to ensure that the total debits and credits in the ledger are equal, and to identify any errors in the accounting records. The trial balance provides the basis for preparing financial statements and adjusting entries.

Question 14

An external event involving a transfer or exchange between two or more entities or parties is called a(n)
A)account.
B)transaction.
C)ledger.
D)accounting system.

Accepted Answer

A transaction involves the transfer or exchange of something between two or more entities or parties. An account is a record of financial transactions, a ledger is a book or system of recording financial transactions, and an accounting system is a set of procedures used to record and report financial information. None of these specifically refer to an external event involving a transfer or exchange.

Question 15

Which of the following statements is true regarding accounting information systems?
A)Both large and small firms should use the same type of accounting system.
B)All firms should have the same types of transactions.
C)The volume of data to be handled should not vary between firms.
D)The kind of information that management requires of an accounting system will vary,
Depending on the type of firm.

Accepted Answer

The answer of Which of the following statements is true...

Question 16

Which of the following equations is correct?
A)Assets plus Liabilities = Equity.
B)Assets = Liabilities minus Equity.
C)Liabilities = Assets plus Equity.
The Accounting Information System 3 - 9
D)Equity = Assets minus Liabilities.

Accepted Answer

The answer of Which of the following equations is correct?
A)Assets...

Question 17

The double-entry accounting system is
A)the procedure of transferring journal entries to the ledger accounts.
B)an accounting system first developed by Canada Revenue Agency.
C)the procedure of entering transaction data in the journal.
D)a system that records the dual effect of each transaction in appropriate accounts.

Accepted Answer

The answer of The double-entry accounting system is
A)the procedure of...

Question 18

The process of transferring the essential facts and figures from the book of original entry to the ledger accounts is called
A)journalizing.
B)posting.
C)double-entering.
D)adjusting.

Accepted Answer

The answer of The process of transferring the essential facts...

Question 19

Performing a service for a client on account will
A)increase one asset and decrease another asset.
B)decrease an asset and decrease a liability.
C)increase an asset and decrease equity.
D)increase an asset and increase equity.

Accepted Answer

The answer of Performing a service for a client on...

Question 20

The book of original entry where transactions and other selected events are first recorded is called the
A)ledger.
B)journal.
C)account.
D)statement of financial position.

Accepted Answer

The book of original entry where transactions and other selected events are first recorded is called the journal. The ledger is where those transactions are then transferred and summarized into specific accounts. The statement of financial position (also known as the balance sheet) is a financial statement that shows the company's assets, liabilities, and equity at a specific point in time.

Quiz 1: Intermediate Accounting Volume 1

Which of the following accounts is increased by a debit?

Some events are NOT recorded in the accounting information system because

The book (or electronic database) containing the accounts is called the

An example of a temporary account is

The account credited for a receipt of cash on account is

Which of the following is an internal event?

The IASB and FASB are currently working on a joint project to complete a common conceptual framework.According to the proposed (new) definition, which of the following would be considered assets?

Which of the following criteria does NOT have to be met before an event or transaction should be recorded for accounting purposes?

The debit and credit analysis of a transaction normally takes place

The IASB and FASB are currently working on a joint project to complete a common conceptual framework.Which of the following statements best describes the proposed (new) definition of an asset?

A trial balance will NOT balance if

The IASB and FASB are currently working on a joint project to complete a common conceptual framework.According to the proposed (new) definition, which of the following would be considered liabilities?

A trial balance

An external event involving a transfer or exchange between two or more entities or parties is called a(n)

Which of the following statements is true regarding accounting information systems?

Which of the following equations is correct?

The double-entry accounting system is

The process of transferring the essential facts and figures from the book of original entry to the ledger accounts is called

Performing a service for a client on account will

The book of original entry where transactions and other selected events are first recorded is called the