Reference no: EM13854055

Question 1.1. Information about cash receipts can be obtained from check stubs and carbon copies of checks.
True
False

Question 2.2. Purchase invoices received from suppliers provide information about 

cash receipts.
sales of goods.
purchases of goods or services.
cash payments.

Question 3.3. Purchase invoices received from suppliers provide information about cash payments.
True
False

Question 4.4. Source documents provide objective, verifiable evidence of business transactions.
True
False

Question 5.5. Source documents provide the input for the accounting process.
True
False

Question 6.6. Check stubs and carbon copies of checks provide information about
cash payments.
cash receipts.
sales of goods or services.
purchases of goods or services.

Question 7.7. The Posting Reference column of the journal provides a cross-reference between the
ledger and accounts.
journal and ledger.
ledger and financial statements.
journal and financial statements.

Question 8.8. The general ledger is kept to supply management with desired information in summary form.
True
False

Question 9.9. Posting from the journal to the ledger does NOT involve which of the following steps?
Enter the date of each transaction in the accounts.
Enter the amount of each transaction in the accounts.
Enter the page of the journal from which each transaction is posted in the accounts.
Enter the description of the entry.

Question 10.10. A chronological record of financial transactions expressed as debits and credits to accounts is provided by the
ledger.
journal.
balance sheet.
trial balance.

Question 11.11. The Description column of a two-column journal is used to enter the titles of the accounts affected by each transaction, together with a description of the transaction.
True
False

Question 12.12. After posting journal information to the ledger accounts, a check mark should be entered in the Posting Reference column of the journal to indicate that the transaction item has been posted.
True
False

Question 13.13. All transactions must be posted before preparing a trial balance.
True
False

Question 14.14. A complete set of all the accounts used by a business is known as the general ledger.
True
False

Question 15.15. If the owner of a company invested cash in a business enterprise, the transaction would include
debiting Cash and crediting Capital.
debiting Capital and crediting Cash.
debiting Cash and crediting Revenue.
debiting Revenue and crediting Cash.

Question 16.16. Each entry in the journal affects two or more accounts.
True
False

Question 17.17. A contra-asset appears on the income statement.
True
False

Question 18.18. The owner's capital account in the last two columns of the work sheet is an up-to-date account and includes net income and withdrawals of the current period.
True
False

Question 19.19. A net loss is shown on the work sheet as a(n)
debit in the Balance Sheet columns.
credit in the Balance Sheet columns.
debit and a credit in the Balance Sheet columns.
adjustment to owner's equity.

Question 20.20. In completing the work sheet, what is the reason for adding the net income for the year to the Balance Sheet Credit column?
Owner's equity is not up-to-date.

Cash is not up-to-date.

Owner's withdrawal is not up-to-date.

Sales is not up-to-date.

Question 21.21. Depreciation expense is recorded for a specific period of time.
True
False

Question 22.22. The cost of plant assets less the accumulated depreciation is called the salvage value of the asset.
True
False

Question 23.23. Net income is shown on the work sheet as a
debit in the Balance Sheet column.

credit in the Income Statement column.

debit in the Income Statement column.

debit in the Adjustments column.

Question 24.24. The matching principle in accounting requires the matching of
revenue earned with the expenses incurred to produce the revenue.

revenue earned with the assets used to produce the revenue.

revenue earned with the liabilities incurred to produce the revenue.

revenue earned with the assets used less the liabilities incurred.

Question 25.25. Assets, liabilities, and the owner's capital account are permanent accounts.
True
False

Question 26.26. The accuracy of the statement of cash flows can be proved by comparing the cash provided by operating activities with the change in the cash balance.
True
False

Question 27.27. Owner's equity can be increased through
withdrawals by the owner.

investments by the owner.

expenses exceeding revenues.

purchases of assets for cash.

Question 28.28. Current assets include cash and other assets that will be converted into cash or consumed within one year or the normal operating cycle of the business, whichever is longer.
True
False

Question 29.29. Revenues and expenses are temporary accounts and are closed at the end of the accounting period.
True
False

Question 30.30. After the accounts are closed and the journal entries have been posted, which of the following accounts would have a balance?
Payroll Taxes Expense

Miscellaneous Expense

Professional Expense

Supplies

Question 31.31. A customer returns merchandise that was delivered in poor condition and that does not meet specification. The account that the seller would debit for the amount of the return is
Sales Returns and Allowances.

Purchase Returns and Allowances.

Sales.

Purchases.

Question 32.32. The amounts for sales returns and allowances, sales discounts, and net sales added together equal gross sales.
True
False

Question 33.33. After the posting of the accounts receivable ledger and the general ledger is completed, the total of the accounts receivable ledger balances should equal the Accounts Receivable balance in the general ledger.
True
False

Question 34.34. To encourage customers who purchase merchandise on account to pay promptly, a cash discount is usually offered.
True
False

Question 35.35. Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The amount that should be added to Accounts Receivable would be
$5.40.

$94.60.

$93.60.

$95.40.

Question 36.36. Merchandise returned by the customer for a refund is called a
sales return.

sales allowance.

credit memo.

debit memo.

Question 37.37. Sales Tax Payable is an asset account.
True
False

Question 38.38. A list showing the amount due from each customer as of a specified date is known as a
trial balance.

schedule of accounts payable.

schedule of accounts receivable.

work sheet.

Question 39.39. While sales returns and allowances can be debited directly to the sales account, it is better to debit a separate sales returns and allowances account.
True
False

Question 40.40. For the merchant, bank credit card sales are treated in a manner similar to
sales on account.

cash sales.

installment sales.

layaway sales.

Question 41.41. Gross profit is a measure of the amount of sales dollars available to cover expenses after covering the cost of the goods sold.
True
False

Question 42.42. The supplier or vendor is the person or firm from whom the merchandise or other property is ordered.
True
False

Question 43.43. When the merchandise is received, a receiving report indicating what has been received is prepared.
True
False

Question 44.44. Which of the following indicates that a shipment is free on board at the destination of the shipment and the seller will pay the transportation costs?
COD

FOB shipping point

FOB destination

4/10, EOM

Question 45.45. The entry to record the purchase on account of merchandise for resale under the periodic inventory system includes
debiting Purchases and crediting Cash.

debiting Purchases and crediting Accounts Payable.

debiting Merchandise Inventory and crediting Cash.

debiting Merchandise Inventory and crediting Accounts Payable.

Question 46.46. A list showing the amount due to each supplier as of a specified date is known as the
schedule of accounts receivable.

trial balance.

balance sheet.

schedule of accounts payable.

 

Question 47.47. If the terms of an invoice dated April 10 are 3/10, n/30, the invoice must be paid on or before April 20 in order to be entitled to a discount.
True
False

Question 48.48. An account number in the Posting Reference column of the general journal indicates that the account has been posted to the general ledger.
True
False

Question 49.49. A schedule of accounts payable is used to prove that the sum of the accounts payable ledger balances equals the Accounts Payable balance in the general ledger.
True
False

Question 50.50. After the posting of the accounts payable ledger and the general ledger is completed, the total of the accounts payable ledger balances should equal the Accounts Payable balance in the general ledger.

True
False