Question 1

A T account consists of

Accepted Answer

A)  a title, a debit balance, and a credit balance.
B)  a title, a left side, and a debit balance.
C)  a title, a debit side, and a credit side.
D)  a title, a right side, and a debit balance.E) A) and D)
F) A) and C)

Question 2

The journal is a chronological record of all transactions.

Accepted Answer

A) True 
 B)False

Question 3

An investment by the shareholders in a business increases

Accepted Answer

A)  assets and shareholders' equity.
B)  assets and liabilities.
C)  liabilities and shareholders' equity.
D)  assets only.E) A) and B)
F) All of the above

Question 4

When a corporation pays a dividend, the

Accepted Answer

A)  cash account will be increased with a debit.
B)  dividends account will be increased with a credit.
C)  retained earnings account will be directly increased with a debit.
D)  dividends account will be increased with a debit.E) B) and C)
F) A) and D)

Question 5

The double-entry system requires that each transaction must be recorded

Accepted Answer

A)  in at least two different accounts.
B)  in a T account.
C)  first as a revenue and then as an expense.
D)  twice.E) A) and C)
F) All of the above

Question 6

A credit to an asset account indicates a(n)

Accepted Answer

A)  error.
B)  credit was made to a liability account.
C)  decrease in the asset.
D)  increase in the asset.E) All of the above
F) B) and C)

Question 7

A chart of accounts

Accepted Answer

A)  is a chart created in Excel.
B)  indicates the amount of profit or loss for the period.
C)  lists the accounts in the ledger.
D)  shows the balance of each account in the general ledger.E) A) and B)
F) B) and C)

Question 8

The normal balance of any account is the

Accepted Answer

A)  left side.
B)  right side.
C)  side which increases the account.
D)  side which decreases the account.E) B) and C)
F) A) and B)

Question 9

In the first month of operations, the total of the debit entries to the cash account amounted to $1,900 and the total of the credit entries to the cash account amounted to $1,500. Therefore, at the end of the month, the cash account has a

Accepted Answer

A)  $500 credit balance.
B)  $900 debit balance.
C)  $400 debit balance.
D)  $400 credit balance.E) A) and B)
F) A) and C)

Question 10

A debit is not the normal balance for which account listed below?

Accepted Answer

A)  Dividends
B)  Cash
C)  Accounts receivable
D)  Service revenueE) C) and D)
F) A) and C)

Question 11

Which of the following accounts probably would be listed before the others in a chart of accounts?

Accepted Answer

A)  Buildings.
B)  Insurance expense.
C)  Dividends.
D)  Revenue from services.E) All of the above
F) A) and B)

Question 12

After transaction information has been recorded in the journal, it is transferred to the

Accepted Answer

A)  chart of accounts.
B)  income statement.
C)  book of original entry.
D)  ledger.E) A) and D)
F) All of the above

Question 13

A person who wants to determine the balance of a particular account should refer to the

Accepted Answer

A)  ledger.
B)  source document.
C)  chart of accounts.
D)  journal.E) A) and D)
F) None of the above

Question 14

Accounting systems should record

Accepted Answer

A)  all economic events.
B)  events that result in a change in assets, liabilities, or shareholders' equity items.
C)  only events that involve cash.
D)  only events that include revenues, expenses and cash.E) B) and D)
F) None of the above

Question 15

An accountant has debited an asset account for $1,000 and credited an expense account for $2,000. Which of the following would be an incorrect way to complete the recording of the transaction?

Accepted Answer

A)  Credit an asset account for $1,000.
B)  Credit a liability account for $1,000.
C)  Credit a shareholders' equity account for $1,000.
D)  Debit a shareholders' equity account for $1,000.E) A) and B)
F) None of the above

Question 16

The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

Accepted Answer

A) True 
 B)False

Question 17

Prepaid expenses are reported as assets on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 18

The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

Accepted Answer

A) True 
 B)False

Question 19

An accounting report that lists all assets, liabilities, and shareholders' equity accounts and their balances at a specific date is called a

Accepted Answer

A)  trial balance.
B)  general journal.
C)  general ledger.
D)  chart of accounts.E) B) and D)
F) All of the above

Question 20

A trial balance is a listing of the

Accepted Answer

A)  transactions in a journal.
B)  chart of accounts.
C)  general ledger accounts and balances.
D)  totals from the journal pages.E) B) and C)
F) B) and D)

Exam 3: The Accounting Information System

An investment by the shareholders in a business increases

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The normal balance of any account is the

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The journal is a chronological record of all transactions.

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In the first month of operations, the total of the debit entries to the cash account amounted to $1,900 and the total of the credit entries to the cash account amounted to $1,500. Therefore, at the end of the month, the cash account has a

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Accounting systems should record

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A debit is not the normal balance for which account listed below?

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An accounting report that lists all assets, liabilities, and shareholders' equity accounts and their balances at a specific date is called a

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An accountant has debited an asset account for $1,000 and credited an expense account for $2,000. Which of the following would be an incorrect way to complete the recording of the transaction?

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A credit to an asset account indicates a(n)

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When a corporation pays a dividend, the

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The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

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The double-entry system requires that each transaction must be recorded

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A trial balance is a listing of the

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After transaction information has been recorded in the journal, it is transferred to the

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Prepaid expenses are reported as assets on the statement of financial position.

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Which of the following accounts probably would be listed before the others in a chart of accounts?

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A T account consists of

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A person who wants to determine the balance of a particular account should refer to the

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The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

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A chart of accounts

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