Question 1

Match the following principles with their correct definition.
-This principle states that accountants should take care to avoid overstating assets or income when they prepare financial statements.

Accepted Answer

The principle of conservatism guides accountants to exercise caution and choose methods that minimize the possibility of overstating assets or income, ensuring that financial statements do not present the company's financial position more favorably than it actually is.

Question 2

Match the following principles with their correct definition.
-This assumption requires that financial information be reported in monetary terms.

Accepted Answer

The monetary unit assumption is the accounting principle that concern requires all financial transactions to be recorded in a single currency. This allows for the consistent reporting and analysis of financial information.

Question 3

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.)
-Common Shares

Accepted Answer

Common Shares have a normal credit balance, and credits increase the balance in the account. This is because common shares represent equity in a company, and increases in equity are recorded as credits.

Question 4

Match the following terms with their correct definition.
-the sequence of procedures used by companies to transform the effects of business activities into financial statements

Accepted Answer

The accounting cycle is the comprehensive process used by businesses to record and process all financial transactions, from when the transaction occurs, to its representation in the financial statements, and finally to closing the accounts.

Question 5

Match the following principles with their correct definition.
-This principle requires that the activities of a company be initially measured at their exchange price at the time the activity occurs.

Accepted Answer

The historical cost principle requires that the activities of a company be initially measured at their exchange price at the time the activity occurs, reflecting the cost of the item at the time of purchase or acquisition, not its current value.

Question 6

Match the following principles with their correct definition.
-Any information that would make a difference to financial statement users should be reported.

Accepted Answer

The full disclosure principle in accounting means that all information that would affect the understanding of the financial statements must be disclosed to the users. This includes any information that could influence the decisions of investors, creditors, or other stakeholders.

Question 7

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.)
-Intangibles

Accepted Answer

Intangibles are asset accounts, and like all asset accounts, they have a normal debit balance. Increasing an asset account requires a debit entry.

Question 8

Match the following principles with their correct definition.
-This principle requires that an expense be recorded and reported in the same period as the revenue it helped generate.

Accepted Answer

The matching principle in accounting states that expenses should be matched with the revenues they help to generate within the same accounting period. This ensures that financial statements accurately reflect a company's financial performance.

Question 9

Match the following principles with their correct definition.
-This principle divides the life of a company into artificial time periods such as quarters and years.

Accepted Answer

The time period principle is the accounting principle that divides the life of a business into artificial time periods to provide timely information. This is typically done in quarters and years for reporting purposes.

Question 10

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.)
-Unearned Revenues

Accepted Answer

Unearned Revenues is a liability account, and the normal balance for liabilities is a credit. To increase this account, you would credit it.

Question 11

Match the following principles with their correct definition.
-This assumption states that each company will be accounted for separately from its owners.

Accepted Answer

The economic entity assumption is the accounting principle that separates the transactions of a business from those of its owners or other businesses. This means that the business is treated as its own entity, distinct from its owners, for accounting purposes.

Question 12

Match the following principles with their correct definition.
-This assumption states that in the absence of information to the contrary,it should be assumed that a company will continue to operate indefinitely.

Accepted Answer

The going-concern principle assumes that a company will continue to operate indefinitely, unless there is evidence to suggest otherwise. This assumption underlies the preparation of financial statements, as it affects decisions on asset valuation, depreciation, and amortization.

Question 13

Match the following principles with their correct definition.
-This principle states that users should be able to make meaningful comparisons of different companies.

Accepted Answer

Comparability allows users to identify and understand similarities and differences among items. This principle ensures that financial statements of different companies can be compared to each other.

Question 14

Match the following terms with their correct definition.
-a list of all the accounts maintained by the business

Accepted Answer

The chart of accounts is a list of all the accounts maintained by a business, organized in a way that aligns with its financial reporting needs.

Question 15

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.)
-Notes Payable

Accepted Answer

Notes Payable is a liability account, and liability accounts have a normal credit balance. To increase a liability account, you would credit it.

Question 16

Match the following terms with their correct definition.
-a collection of all the individual financial statement accounts that a company uses

Accepted Answer

The answer of Match the following terms with their correct...

Question 17

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.)
-Dividends

Accepted Answer

Dividends have a normal debit balance, and they are increased with a debit.

Question 18

Match the following principles with their correct definition.
-This system is used by companies to record the effects of transactions on the accounting equation.

Accepted Answer

Double-entry accounting is the system that companies use to record the effects of transactions on the accounting equation, ensuring that every transaction is recorded in at least two accounts: one account is debited, and another account is credited, maintaining the balance of the accounting equation.

Question 19

Match the following terms with their correct definition.
-a device used to record increases and decreases in each of the basic elements of the financial statements

Accepted Answer

An account is a device used to record increases and decreases in each of the basic elements of the financial statements.

Question 20

Match the following principles with their correct definition.
-This principle is used to determine when revenue is recorded and reported.

Accepted Answer

The revenue recognition principle dictates that revenue should be recorded and reported at the time it is earned and realized or realizable, regardless of when the cash is received. This principle ensures that financial statements provide a consistent and accurate picture of a company's revenue activities during a specific period.

Quiz 2: The Accounting Information System

Match the following principles with their correct definition. -This principle states that accountants should take care to avoid overstating assets or income when they prepare financial statements.

Match the following principles with their correct definition. -This assumption requires that financial information be reported in monetary terms.

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.) -Common Shares

Match the following terms with their correct definition. -the sequence of procedures used by companies to transform the effects of business activities into financial statements

Match the following principles with their correct definition. -This principle requires that the activities of a company be initially measured at their exchange price at the time the activity occurs.

Match the following principles with their correct definition. -Any information that would make a difference to financial statement users should be reported.

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.) -Intangibles

Match the following principles with their correct definition. -This principle requires that an expense be recorded and reported in the same period as the revenue it helped generate.

Match the following principles with their correct definition. -This principle divides the life of a company into artificial time periods such as quarters and years.

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.) -Unearned Revenues

Match the following principles with their correct definition. -This assumption states that each company will be accounted for separately from its owners.

Match the following principles with their correct definition. -This assumption states that in the absence of information to the contrary,it should be assumed that a company will continue to operate indefinitely.

Match the following principles with their correct definition. -This principle states that users should be able to make meaningful comparisons of different companies.

Match the following terms with their correct definition. -a list of all the accounts maintained by the business

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.) -Notes Payable

Match the following terms with their correct definition. -a collection of all the individual financial statement accounts that a company uses

Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.) -Dividends

Match the following principles with their correct definition. -This system is used by companies to record the effects of transactions on the accounting equation.

Match the following terms with their correct definition. -a device used to record increases and decreases in each of the basic elements of the financial statements

Match the following principles with their correct definition. -This principle is used to determine when revenue is recorded and reported.