Question 1

If the trial balance balances, it proves that all of the entries have been made correctly.

Accepted Answer

A) True 
 B)False

Question 2

A debit to an asset account indicates an increase in that account.

Accepted Answer

A) True 
 B)False  True

Question 3

After a transaction has been posted, the trial balance will balance.

Accepted Answer

A) True 
 B)False

Question 4

An accountant has debited an expense account for $1,000 and credited an asset account for $500. Which of the following would be a correct way to complete the recording of the transaction?

Accepted Answer

A)   Debit an asset account for $500.
B)   Credit a liability account for $500.
C)   Debit an owner's equity account for $500.
D)   Debit a liability account for $500.

Question 5

Funds received before the delivery of goods and services would be shown as

Accepted Answer

A)   unearned revenue on the statement of earnings.
B)   unearned revenue on the balance sheet.
C)   a credit to cash.
D)   sales or service revenue on the statement of earnings.

Question 6

A chart of accounts for a company

Accepted Answer

A)   is a graph of the financial position of the company.
B)   indicates the amount of profit or loss for the period.
C)   lists the accounts and account numbers that identify their location in the ledger.
D)   shows the balance of each account in the general ledger.

Question 7

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

Accepted Answer

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

Question 8

In the second month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $500. The opening balance of the cash account was $200. The cash account has a

Accepted Answer

A)   $500 credit balance.
B)   $900 debit balance.
C)   $600 debit balance.
D)   $400 credit balance.

Question 9

Transactions are recorded for all of the following reasons except

Accepted Answer

A)   when the transaction causes a change in the financial position of the company.
B)   to make all of the accounts balance.
C)   when evidence of the transaction is available.
D)   when there is a specific effect on the accounting equation.

Question 10

A journal provides

Accepted Answer

A)   the balances for each account.
B)   information about a transaction in several different places.
C)   a list of all accounts used in the business.
D)   a chronological record of transactions.

Question 11

A chart of accounts does NOT include

Accepted Answer

A)   account balances.
B)   account numbers.
C)   account titles.
D)   list of all accounts. A

Question 12

The first step in the recording process is to enter the transaction information in a journal.

Accepted Answer

A) True 
 B)False

Question 13

An account is used as part of the recording process and is described by all except which one of the following?

Accepted Answer

A)   An account can have either a debit or credit balance.
B)   An account is a source document.
C)   An account may be part of a manual or a computerized accounting system.
D)   An account has a title. B

Question 14

A debit to an expense account

Accepted Answer

A)   decreases the owner's equity.
B)   increases owner's equity.
C)   directly affects the drawings account.
D)   has no effect on the balance sheet.

Question 15

If a journal entry is posted twice, then this error will be found when the trial balance is produced.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is NOT true about an asset?

Accepted Answer

A)   Its normal balance is a debit.
B)   To increase an asset a debit entry would be made.
C)   To increase it, a credit entry should be made.
D)   To decrease it, a credit entry should be made.

Question 17

A chart of accounts is

Accepted Answer

A)   is only necessary for manual systems.
B)   used only in companies with a complex business structure.
C)   the first step in designing an accounting system.
D)   a relatively simplistic way of classifying accounts.

Question 18

A trial balance is a listing of

Accepted Answer

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

Question 19

A three-column form of account is so named because it has columns for

Accepted Answer

A)   debit, credit, and account name.
B)   debit, credit, and reference.
C)   debit, credit, and balance.
D)   debit, credit, and date.

Question 20

A trial balance does NOT include

Accepted Answer

A)   account names.
B)   account balances.
C)   journal entries details.
D)   date of trial balance.

Exam 2: The Recording Process

If the trial balance balances, it proves that all of the entries have been made correctly.

Correct AnswerverifiedShow Answer

A debit to an asset account indicates an increase in that account.

Correct AnswerverifiedTrue

After a transaction has been posted, the trial balance will balance.

Correct AnswerverifiedShow Answer

An accountant has debited an expense account for $1,000 and credited an asset account for $500. Which of the following would be a correct way to complete the recording of the transaction?

Correct AnswerverifiedShow Answer

Funds received before the delivery of goods and services would be shown as

Correct AnswerverifiedShow Answer

A chart of accounts for a company

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the second month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $500. The opening balance of the cash account was $200. The cash account has a

Correct AnswerverifiedShow Answer

Transactions are recorded for all of the following reasons except

Correct AnswerverifiedShow Answer

A journal provides

Correct AnswerverifiedShow Answer

A chart of accounts does NOT include

Correct AnswerverifiedA

The first step in the recording process is to enter the transaction information in a journal.

Correct AnswerverifiedShow Answer

An account is used as part of the recording process and is described by all except which one of the following?

Correct AnswerverifiedB

A debit to an expense account

Correct AnswerverifiedShow Answer

If a journal entry is posted twice, then this error will be found when the trial balance is produced.

Correct AnswerverifiedShow Answer

Which of the following is NOT true about an asset?

Correct AnswerverifiedShow Answer

A chart of accounts is

Correct AnswerverifiedShow Answer

A trial balance is a listing of

Correct AnswerverifiedShow Answer

A three-column form of account is so named because it has columns for

Correct AnswerverifiedShow Answer

A trial balance does NOT include

Correct AnswerverifiedShow Answer

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B

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