Assignemnt
Question 1
The purpose of the ledger is to
record chronologically the day's transactions.
keep a record of documentation to support each transaction.
keep in one place all information about changes in specific account balances.
make sure that all assets, liabilities, etc., have normal balances at all times.
Question 2
An expense
decreases assets and liabilities.
decreases stockholders' equity.
leaves stockholders' equity unchanged.
is basically the same as a liability.
Question 3
Operating activities are the types of activities the company performs to generate profits.
True
False
Question 4
The primary purpose of the trial balance is to
disclose the complete effect of a transaction in one place.
make sure a journal entry is not posted twice.
transfer journal entries to the ledger accounts.
prove the equality of the debit and credit amounts after posting.
Question 5
Which one of the following represents the expanded basic accounting equation?
Assets = Liabilities + Common Stock + Dividends - Revenue - Expenses
Assets + Dividends + Expenses = Liabilities + Common Stock + Revenues
Assets= Liabilities + Common Stock + Revenues - Expenses - Dividends
Assets = Revenues + Expenses - Liabilities
Question 6
Borrowing money and issuing shares of stock are
operating activities.
investing activities.
financing activities.
None of these answer choices are correct.
Question 7
Economic events that require recording in the financial statements are called accounting transactions.
True
False
Question 8
Which of the following statements is not true?
Expenses increase stockholders' equity.
Expenses have normal debit balances.
Expenses decrease stockholders' equity.
Expenses are a negative factor in the computation of net income.
Question 9
Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not?
Yes, they are treated as revenue at the time of receipt because the company has access to the cash.
No, the amount of revenue cannot be adequately determined until the company completes the work.
Yes, The intent of the company is to perform the work and the customer is confident that the services will be completed.
No, revenue cannot be recognized until the work is performed.
Question 10
Match the items below by entering the appropriate code letter in the space provided.
Account
Normal account balance
Debit
Revenue account
Ledger
Journal
Posting
Chart of accounts
Trial balance
Source document
A. An accounting record of increases and decreases in specific assets, liabilities, and stockholders' equity items.
B. Transferring journal entries to ledger accounts.
C. Evidence that a transaction has taken place.
D. Shows the debit and credit effects of specific transactions.
E. A list of accounts and their balances at a given time.
F. Has a credit normal balance
G. Left side of an account.
H. A list of all the accounts used by a company.
I. The side which increases an account.
J. The entire group of accounts maintained by a company.
Question 11
On June 1, 2014, England Inc. reported a cash balance of $21,000. During June, England made deposits of $8,000 and made disbursements totaling $24,000. What is the cash balance at the end of June?
$5,000 credit balance
$29,000 debit balance
$5,000 debit balance
$3,000 credit balance
Question 12
Salaries and wages payable is a type of expense.
True
False
Question 13
If total liabilities decreased by $4,000, then
stockholders' equity must have decreased by $4,000.
assets must have decreased by $4,000, or stockholders' equity must have increased by $4,000.
assets and stockholders' equity each increased by $2,000.
assets must have increased by $4,000.
Question 14
An account is often referred to as a T-account because of the way it is constructed.
True
False
Question 15
All of the following statements regarding the double-entry system are true except
a two-sided effect of each transaction is recorded in appropriate accounts when using the double-entry system.
the double-entry system provides a logical method for recording transactions.
both sides of the accounting equation must be affected when recording a transaction using the double-entry system.
when using the double-entry system, the sum of all debits to the accounts must equal the sum of all credits.
Question 16
Revenues are a subdivision of stockholders' equity.
True
False
Question 17
Which of the following is not an example of a source document that provides evidence of a transaction?
A cancelled check
A sales slip
A trial balance
A cash register tape
Question 18
All of the following are characteristics of every accounting information system except it is a system
that collects transaction data.
that processes transaction data.
that communicates financial information to decision makers.
of data storage hardware for the chart of accounts.