会计学原理练习题.pdf
True/False Questions1.Accounting records are also referred to as the books.TRUE3.Preparation of a trial balance is the first step in the analyzing and recording process.FALSE4.Source documents provide evidence of business transactions and are the basis for accountingentries.TRUE5.Items such as sales tickets,bank statements,checks,and purchase orders are sourcedocuments.TRUE6.An account is a record of increases and decreases in a specific asset,liability,equity,revenue,or expense item.TRUE7.A customers promise to pay is called an account payable to the seller.FALSE9.As prepaid expenses are used,the expired costs of the assets become expenses.TRUE1().Land and buildings are generally recorded in the same ledger account.FALSe13.Cash withdrawn by the owner of a proprietorship should be treated as an expense of thebusiness.FALSE15.The chart of accounts is a list of all the accounts used by a company and includes anidentification number assigned to each account.TRUE16.An account balance is the difference between the debits and credits for an account includingany beginning balance.TRUE18.In a double-entry accounting system,the total amount debited must always equal the totalamount credited.TRUE19.Increases in liability accounts are recorded as debits.FALSE20.Debits increase asset and expense accounts.TRUE21.Credits always increase account balances.FALS23.Double entry accounting requires that each transaction affect,and be recorded in,at leasttwo accounts.TRUE24.A revenue account normally has a debit balance.FALSE25.Accounts are normally decreased by debits.FALSE26.The owners withdrawal account normally has a credit balance since it is an equityaccount.FALSE28.An owners capital account normally has a debit balance.FALSE29.A debit entry is always favorable.FALSE30.A transaction that decreases an asset account and increases a liability account must alsoaffect one or more other accounts.TRUE31.A transaction that increases an asset and decreases a liability must also affect one or moreother accounts.TRUE34.If a company purchases land paying cash,the journal entry to record this transaction willinclude a debit to Cash.FALSEIf a company provides services to a customer on credit the selling company should creditAccounts Receivable.FALSEWhen a company bills a customer for$600 for services rendered,the journal entry to recordthis transaction will include a$600 debit to Services Revenue.FALSE37.The debt ratio helps to assess the risk a company has of failing to pay its debts and is helpfulto both its owners and creditors.TRUE38.38.The higher a companys debt ratio is,the higher the risk of a company not being able tomeet its obligations.TRUEThe debt ratio is calculated by dividing total assets by total liabilities.FALSE40.A company that finances a relatively large portion of its assets with liabilities is saidto have a high degree of financial leverage.TRUE41.If a company is highly leveraged,this means that it has relatively low risk of not being ableto repay its debt.FALSE42.Hamilton Industries has liabilities of$105 million and total assets of$35()million.Its debtratio is 40.0%.FALSE$105 million/$350 million=30.0%43.High financial leverage is always bad for a companys owners.FALSE44.A compound journal entry affects no more than two accounts.FALSE45.Posting is the transfer of journal entry information to the ledger.TRUE46.Transactions are first recorded in the ledger.FALSE47.The journal is known as a book of original entry.TRUE48.A journal gives a complete record of each transaction in one place,and shows the debits andcredits for each transaction.TRUEAICPA FN:Decision MakingDifficulty:EasyLearning Objective:Cl49.The journal is known as the book of final entry because financial statements are preparedfrom it.FALSEAICPA FN:Decision MakingDifficulty:HardLearning Objective:Cl5().A trial balance that balances is not proof of complete accuracy in recording transactions.TRUEAICPA FN:Decision MakingDifficulty:EasyLearning Objective:P251.The trial balance is a list of all accounts and their balances at a point in time taken from theledger.TRUEAICPA FN:Decision MakingDifficulty:EasyLearning Objective:P252.Generally,the ordering of accounts in a trial balance typically follows their identificationnumber from the chart of accounts,that is,assets first,then liabilities,then owners capital andwithdrawals,followed by revenues and expenses.TRUEAACSB:AnalyticAICPA FN:Decision MakingDifficulty:MediumLearning Objective:P253.The trial balance can serve as a replacement for the balance sheet,since debits must equalwith credits.FALSEAACSB:AnalyticAIC PA F N:D ecision M akingD ifficulty:M ediumLearning O bjective:P 254.A trial balance that is in balance is proof that no errors were made in journalizing thetransactions,posting to the ledger,and preparing the trial balance.FALSEAIC PA F N:D ecision M akingD ifficulty:M ediumlearning O bjective:P 255.If cash was incorrectly debited for$100 instead of correctly credited for$100,the cashaccount is out of balance by$100.FALSEAACSB:AnalyticAIC PA F N:D ecision M akingD ifficulty:M ediumLearning O bjective:P 256.The balance sheet provides a link between beginning and ending income statements.FALSEAIC PA F N:D ecision M akingD ifficulty:M ediumLearning O bjective:P 357.The heading on each financial statement lists the three Ws-Who(the name of theorganization),What(the name of the statement),and Where(the organization address)FALSED ifficulty:M ediumLearning O bjective:P 358.An income statement reports the revenues earned less expenses incurred by a business overa period of time.TRUED ifficulty:M ediumlearning O bjective:P 359.The balance sheet reports the financial position of a company at a point in time.TRUED ifficulty:M ediumLearning O bjective:P 3Multiple Choice Questions60.The accounting process begins with:A.Analysis of business transactions and source documents.B.Preparing financial statements and other reports.C.Summarizing the recorded effect of business transactions.D.Presentation of financial information to decision-makers.E.Preparation of the trial balance.AICPA FN:Decision MakingDifficulty:EasyLearning Objective:Cl61.A sales invoice:A.Is a type of source document.B.Is used by sellers to record the sale.C.Is used by buyers to record purchases.D.Gives rise to an entry in the accounting process.E All of these.AICPA FN:Decision MakingDifficulty:EasyLearning Objective:C262.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C263.Source documents:A.Include the ledger.B,Are the sources of accounting information.C.Must be in electronic form.D.Are based on accounting entries.E.Include the chart of accounts.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C264.Various types of documents and other papers that companies use when they conduct theirbusiness:A.Are called source documents.B.Can include sales tickets.C.Are the source of information for recording accounting entries.D.Can be in electronic form.E.All of these.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C265.A record of the increases and decreases in a specific asset,liability,equity,revenue,orexpense is a(n):A.Journal.B.Posting.C.Trial balance.D.Account.E.Chart of accounts.AICPA FN:Decision MakingDifficulty:Easylearning Objective:C367.The account used to record the transfers of assets from a business to its owner is:A.A revenue account.B.The owners withdrawals account.C.The owners capital account.D.An expense account.E.A liability account.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C369.Unearned revenues are:A.Revenues that have been earned and received in cash.B.Revenues that have been earned but not yet collected in cash.C.Liabilities created when a customer pays in advance for products or services before therevenue is earned.D.Recorded as an asset in the accounting records.E.Increases to owners*capital.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C370.Prepaid expenses are:A.Payments made for products and services that do not ever expire.B.Classified as liabilities on the balance sheet.C.Decreases in equity.D,Assets that represent prepayments of future expenses.E.Promises of payments by customers.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C371.A written promise to pay a definite sum of money on a specified future date is a(n):A.Unearned revenue.B.Prepaid expense.C.Credit account.D.Note payable.E Account receivable.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C372.A collection of all accounts and their balances used by a business is called a:A.Journal.B.Book of original entry.C.General Journal.D.Balance column journal.E,Ledger.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C373.A ledger is:A.A record containing increases and decreases in a specific asset,liability,equity,revenue,orexpense item.B.A journal in which transactions are first recorded.C.A collection of documents that describe transactions and events entering the accountingprocess.D.A list of all accounts with their debit balances at a point in time.E,A record containing all accounts and their balances used by a company.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C474.A list of all accounts and the identification number assigned to each account used by acompany is called a:A.Source document.B.Journal.C.Trial balance.D,Chart of accounts.E.General Journal.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C475.The numbering system used in a companys chart of accounts:A.Is the same for all companies.B.Is determined by generally accepted accounting principles.C.Depends on the source documents used in the accounting process.D.Typically begins with balance sheet accounts.E.Typically begins with income statement accounts.AICPA FN:Decision MakingDifficulty:MediumLearning Objective:C476.A debit is:A.An increase in an account.B.The right-hand side of a T-account.C.A decrease in an account.D,The left-hand side of a T-account.E.An increase to a liability account.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:EasyLearning Objective:C577.The right side of a T-account is a(n):A.Debit.B.Increase.C.Credit.D.Decrease.E.Account balance.79.A credit is used to record:A.A decrease in an expense account.B.A decrease in an asset account.C.An increase in an unearned revenue account.D.An increase in a revenue account.E All of these.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:MediumLearning Objective:C580.A simple account form widely used in accounting as a tool to understand how debits andcredits affect an account balance is called a:A.Withdrawals account.B.Capital account.C.Drawing account.D.T-account.E Balance column sheet.AICPA FN:Decision MakingDifficulty:EasyLearning Objective:C5AACSB:AnalyticAICPA FN:Decision MakingDifficulty:EasyLearning Objective:C582.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:MediumLearning Objective:C583.Of the following accounts,the one that normally has a credit balance is:A.Cash.B.Office Equipment.C.Sales Salaries Payable.D.Owner,Withdrawals.E.Sales Salaries Expense.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:MediumLearning Objective:C584.A debit is used to record:A.A decrease in an asset account.B.A decrease in an expense account.C.An increase in a revenue account.D.An increase in the balance of an owners capital account.E,An increase in the balance of the owners withdrawals account.AACSB:A/ialyticA1CPA FN:Decision MakingDifficulty:MediumLearning Objective:C585.A credit entry:A.Increases asset and expense accounts,and decreases liability,owners capital,and revenueaccounts.B.Is always a decrease in an account.C,Decreases asset and expense accounts,and increases liability,owners capital,and revenueaccounts.D.Is recorded on the left side of a T-account.E.Is always an increase in an account.AACSB:AnalyticA/CPA FN:Decision MakingDifficulty:MediumLearning Objective:C586.Double-entry accounting is an accounting system:A.That records each transaction twice.B,That records the effects of transactions and other events in at least two accounts with equaldebits and credits.C.In which each transaction affects and is recorded in two or more accounts but that couldinclude two debits and no credits.D.That may only be used if T-accounts are used.E.That insures that errors never occur.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:HardLearning Objective:C587.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:EasyLearning Objective:Al88.Management Services,Inc.provides services to clients.On May 1,a client prepaidManagement Services$60,000 for 6-months services in advance.Management Services1general journal entry to record this transaction will include aA.Debit to Unearned Management Fees for$60,000.B.Credit to Management Fees Earned for$60,000.C.Credit to Cash for$60,000.D.Credit to Unearned Management Fees for$60,000.E.Debit to Management Fees Earned for$60,000.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:EasyLearning Objective:Al89.Wisconsin Rentals purchased office supplies on credit.The general journal entry made byWisconsin Rentals will include a:A.Debit to Accounts Payable.B.Debit to Accounts Receivable.C.Credit to Cash.D.Credit to Accounts Payable.E.Credit to Wisconsin Rentals,Capital.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:EasyLearning Objective:Al90.An asset created by prepayment of an expense is:A.Recorded as a debit to an unearned revenue account.B,Recorded as a debit to a prepaid expense account.C.Recorded as a credit to an unearned revenue account.D.Recorded as a credit to a prepaid expense account.E.Not recorded in the accounting records until the earnings process is complete.AACSB:A/ialyticA1CPA FN:Decision MakingDifficulty:MediumLearning Objective:Al91.Robert Haddon contributed$70,000 in cash and land worth$130,000 to open a newbusiness,RH Consulting.Which of the following general journal entries will RH Consultingmake to record this transaction?、Assets$200,000Robert Haddon.Capital$200,000Cash and Land$200,000B Robert Haddon,Capital$200,000Cash$70,000Land130,000C Robert Haddon,Capital$200,000Robert Haddon,Capital$200,000Cash$70,000D Land130,000Robert Haddon,Capital200,000F Assets$200,000AACSB:AnalyticAICPA FN:Decision MakingDifficulty:MediumLearning Objective:Al92.AACSB:AnalyticAICPA FN:Decision MakingDifficulty:HardLearning Objective:Al93.On September 30,the Cash account of Value Company had a normal balance of$5,000.During September,the account was debited for a total of$12,200 and credited for a total of$11,50().What was the balance in the Cash account at the beginning of September?A.A$0 balance.B.A$4,300 debit balance.C.A$4,300 credit balance.D.A$5,700 debit balance.E.A$5,700 credit balance.Beg.Bal.+$12,200-$11,500=$5,000Beg.Bal.$4,300 debitAACSB:AnalyticAICPA FN:Decision MakingDifficulty:HardLearning Objective:Al94.On April 3(),Holden Company had an Accounts Receivable balance of$18,000.During themonth of May,total credits to Accounts Receivable were$52,000 from customer payments.The May 31 Accounts Receivable balance
