72 test bank for financial accounting fundamentals 3rd edition đề trắc nghiệm có đáp án

The normal balance of common stock is a credit A record of the increases and decreases in a specific asset, liability, equity, revenue or expense is an: 1.. Record relevant transactions

72 Test Bank for Financial Accounting Fundamentals 3rd Edition Wild Multiple Choice Questions -

Which of the following statements is incorrect?

1 A The normal balance of accounts receivable is a debit

2 B The normal balance of dividends is a debit

3 C The normal balance of unearned revenues is a credit

4 D The normal balance of an expense account is a credit

5 E The normal balance of common stock is a credit

A record of the increases and decreases in a specific asset, liability, equity, revenue or expense is a(n):

1 A Journal

2 B Posting

3 C Trial balance

4 D Account

5 E Chart of accounts

Source documents include all of the following except:

1 A Sales tickets

2 B Ledgers

3 C Checks

4 D Purchase orders

5 E Bank statements

A credit entry:

1 A Increases asset and expense accounts and decreases liability, common stock and revenue accounts

2 B Is always a decrease in an account

3 C Decreases asset and expense accounts and increases liability, common stock and revenue accounts

4 D Is recorded on the left side of a T-account

5 E Is always an increase in an account

Source documents:

1 A Include the ledger

2 B Are the sources of accounting information

3 C Must be in electronic form

4 D Are based on accounting entries

5 E Include the chart of accounts

Prepaid expenses are:

1 A Payments made for products and services that do not ever expire

2 B Classified as liabilities on the balance sheet

3 C Decreases in retained earnings

4 D Assets that represent prepayments of future expenses

5 E Promises of payments by customers

Unearned revenues are:

1 A Revenues that have been earned and received in cash

2 B Revenues that have been earned but not yet collected in cash

3 C Liabilities created when a customer pays in advance for products or

services before the revenue is earned

4 D Recorded as an asset in the accounting records

5 E Increases to retained earnings

A collection of all accounts (with account balances) used by a

business is called a:

1 A Journal

2 B Book of original entry

3 C General Journal

4 D Balance column journal

5 E Ledger

A ledger is:

1 A A record containing increases and decreases in a specific asset, liability, equity, revenue or expense item

2 B A journal in which transactions are first recorded

3 C A collection of documents that describe transactions and events during the accounting process

4 D A list of all accounts with their debit balances at a point in time

5 E A list of all accounts a company uses and includes an identification number assigned to each account

A written promise to pay a definite sum of money on a specific

future date is a(n):

1 A Unearned revenue

2 B Prepaid expense

3 C Credit account

4 D Note payable

5 E Account receivable

For what reason do most sellers require customers to have their receipts in order to exchange or return purchased items?

1 A The receipt contains coded information which the seller needs to prepare and analyze the trial balance

2 B Sellers wish to ensure that the sale in question was rung up on the register

in the first place

3 C This is a legal requirement mandated by a federal law

4 D The receipt is serving as a promissory note

5 E To create an environment in which customer's do not want to return items

Double-entry accounting is an accounting system:

1 A That records each transaction twice

2 B That records the effects of transactions and other events in at least two accounts with equal debits and credits

3 C In which the impact of each transaction is recorded in two or more

accounts but that could include two debits and no credits

4 D That may only be used if T-accounts are used

5 E That insures that errors never occur

Rocky Industries received its telephone bill in the amount of $300 and immediately paid it Rocky's general journal entry to record this transaction will include a

1 A Debit to Telephone Expense for $300

2 B Credit to Accounts Payable for $300

3 C Debit to Cash for $300

4 D Credit to Telephone Expense for $300

5 E Debit to Accounts Payable for $300

An account used to record the owner's investments in the business

is called:

1 A Dividends

2 B Common Stock

3 C Revenue

4 D Expense

5 E Liability

A debit is:

1 A An increase in an account

2 B The right-hand side of a T-account

3 C A decrease in an account

4 D The left-hand side of a T-account

5 E An increase to a liability account

A simple account form widely used in accounting to illustrate how debits and credits work is called a:

1 A Dividend account

2 B Common stock account

3 C Drawing account

4 D T-account

5 E Balance column sheet

The right side of a T-account is a(n):

1 A Debit

2 B Increase

3 C Credit

4 D Decrease

5 E Account balance

An asset created by prepayment of an expense is:

1 A Recorded as a debit to an unearned revenue account

2 B Recorded as a debit to a prepaid expense account

3 C Recorded as a credit to an unearned revenue account

4 D Recorded as a credit to a prepaid expense account

5 E Not recorded in the accounting records until the earnings process is

complete

Which of the following is a true statement regarding debits and credits?

1 A If a company earned a profit, debits will not equal credits

2 B For a business, debits are better than credits

3 C A company's books are not in balance if they have a current period loss

4 D Assets and expenses are both increased with a debit

5 E Liabilities and equity are both increased with a debit

A list of all accounts used by a company and the identification

number assigned to each account is called a:

1 A Ledger

2 B Journal

3 C Trial balance

4 D Chart of accounts

5 E General Journal

Of the following accounts, the one that normally has a credit

balance is:

1 A Cash - Given

2 B Office Equipment

3 C Sales Salaries Payable

4 D Dividends

5 E Sales Salaries Expense

Management Services, Inc provides services to clients On May 1,

a client prepaid Management Services $60,000 for 6-months

contract in advance Management Services' general journal entry to record this transaction will include a

1 A Debit to Unearned Management Fees for $60,000

2 B Credit to Management Fees Earned for $60,000

3 C Credit to Cash for $60,000

4 D Credit to Unearned Management Fees for $60,000

5 E Debit to Management Fees Earned for $60,000

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

1 A Recorded as a debit to an unearned revenue account

2 B Recorded as a debit to a prepaid expense account

3 C Recorded as a credit to an unearned revenue account

4 D Recorded as a credit to a prepaid expense account

5 E Not recorded in the accounting records until the earnings process is

complete

Various types of documents and other papers that companies use when they conduct their business:

1 A Are called source documents

2 B Can include sales tickets

3 C Are the source of information for recording accounting entries

4 D Can be in electronic form

5 E All of the above

The general ledger of a business

1 A Is a collection of all accounts used in a company's information system

2 B Must be kept in a computer file

3 C A and B

4 D Is a set standard not affected by a company's size and diversity

5 E A, B and D

Which of the following statements is correct?

1 A The left side of a T-account is the credit side

2 B Debits decrease asset and expense accounts and increase liability, equity and revenue accounts

3 C The left side of a T-account is the debit side

4 D Credits increase asset and expense accounts and decrease liability, equity and revenue accounts

5 E In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction

Wisconsin Rentals purchased office supplies on credit The general journal entry made by Wisconsin Rentals will include a:

1 A Debit to Accounts Payable

2 B Debit to Accounts Receivable

3 C Credit to Cash

4 D Credit to Accounts Payable

5 E Credit to Retained Earnings

Which of the following list of events properly reflects the early steps taken in the accounting process?

1 A Record relevant transactions, Post journal information to ledger accounts Analyze each transaction, Prepare and analyze the trial balance

2 B Post journal information to ledger accounts, Analyze each transaction, Post journal information to ledger accounts, Prepare and analyze the trial balance

3 C Prepare and analyze the trial balance, Analyze each transaction, Post journal information to ledger accounts, Record relevant transactions

4 D Analyze each transaction, Post journal information to ledger accounts, Record relevant transactions, Prepare and analyze the trial balance

5 E Analyze each transaction, Record relevant transactions, Post journal information to ledger accounts, Prepare and analyze the trial balance

Which of the following statements about the Cash account is true?

1 A Because most companies earn their fees in cash, the cash account is categorized as revenue

2 B For any given transaction Accounts Receivable and Cash can be used interchangeably because both accounts are measured in terms of cash

3 C The cash account includes the value of any medium of exchange that a bank accepts for deposit

4 D Both A and B are true statements

5 E Both B and C are true statements

An account balance is:

1 A The total of the credit side of the account

2 B The total of the debit side of the account

3 C The difference between the total debits and total credits for an account including the beginning balance

4 D Assets = liabilities + equity

5 E Always a credit

A debit is used to record:

1 A A decrease in an asset account

2 B A decrease in an expense account

3 C An increase in a revenue account

4 D An increase in the balance of common stock

5 E A decrease in the balance of retained earnings

A sales invoice:

1 A Is a type of use document

2 B Is used by sellers for recording purposes

3 C Is not needed by buyers

4 D Gives rise to an entry in the accounting process

5 E Is not necessary in accounting

The accounting process begins with:

1 A Analysis of business transactions and events

2 B Preparation of financial statements and other reports

3 C Summarizing the recorded effects of business transactions

4 D Presentation of financial information to decision-makers

5 E Preparation of the trial balance

The account used to record the transfers of assets from a business

to its stockholders is:

1 A A revenue account

2 B The retained earnings account

3 C Common stock account

4 D An expense account

5 E A liability account

A credit is used to record:

1 A An increase in an expense account

2 B An increase in an asset account

3 C An increase in an unearned revenue account

4 D An increase in a revenue account

5 E A decrease to retained earnings

Which of the following statements is correct?

1 A When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense

2 B Promises of future payment are called accounts payable

3 C Increases and decreases in cash are always recorded in the retained earnings account

4 D An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business

5 E Accrued liabilities include accounts receivable

72 Free Test Bank for Financial Accounting

Fundamentals 3rd Edition Wild Multiple Choice

Questions - Page 2

According to IFRSs, comparative information on financial

statements is:

1 A Not required

2 B Required for publicly traded companies only

3 C Required for the preceding period only

4 D Required for the last five years

5 E Not required, but considered a hallmark for companies of excellence

A company has total liabilities of $550 million and total equity of

$300 million Calculate this company's debt ratio

1 A 64.7%

2 B 100%

3 C 54.5%

4 D 1.83 to 1

5 E The debt ratio cannot be determined without additional information

6 $550/($550 + $300) = 64.7%

The record in which transactions are first recorded is the:

1 A Account balance

2 B Ledger

3 C Journal

4 D Trial balance

5 E Cash account

Listed below are two pieces of information Where is the best place

to locate this information, in the journal or the ledger? Details of a transaction which took place on October 3rd All of the sales activity which took place during the current month

1 A 1 Journal 2 Journal

2 B 1 Journal 2 Ledger

3 C 1 Ledger 2 Ledger

4 D 1 Ledger 2 Journal

5 E This information is only available on the financial statements

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a

$4,700 debit What effect would this error have on the trial

balance?

1 A The total of the Debit column of the trial balance will exceed the total of the Credit column by $4,700

2 B The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700

3 C The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400

4 D The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400

5 E The total of the Debit column of the trial balance will equal the total of the Credit column

If the Debit and Credit column totals of a trial balance are equal, then:

1 A All transactions have been recorded correctly

2 B All entries from the journal have been posted to the ledger correctly

3 C All ledger account balances are correct

4 D The total debit entries and total credit entries are equal

5 E The balance sheet would be correct

A column in journals and ledger accounts used to cross reference journal and ledger entries is the:

1 A Account balance column

2 B Debit column

3 C Posting reference column

4 D Credit column

5 E Description column

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 $11,500 What was the balance in the Cash account at the beginning of September?

1 A A $0 balance

2 B A $4,300 debit balance

3 C A $4,300 credit balance

4 D A $5,700 debit balance

5 E A $5,700 credit balance

6 Normal balance = debit

Of the following errors, which one on its own will cause the trial balance to be out of balance?

1 A A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense

2 B A $100 cash receipt from a customer in payment of his account posted as

a $100 debit to Cash and a $10 credit to Accounts Receivable

3 C A $75 cash receipt from a customer in payment of his account posted as a

$75 debit to Cash and a $75 credit to Cash

4 D A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash

5 E An $800 prepayment from a customer for services to be rendered in the future was posted as an $800 debit to Unearned Revenue and an $800 credit

to Cash

The process of transferring general journal information to the ledger is:

1 A Double-entry accounting

2 B Posting

3 C Balancing an account

4 D Journalizing

5 E Not required unless debits do not equal credits

Which of the following statements is true?

1 A If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions

2 B The trial balance is a book of original entry

3 C Another name for trial balance is chart of accounts

4 D The trial balance is a list of all accounts from the ledger with their balances

at a point in time

5 E The trial balance is another name for the balance sheet as long as debits balance with credits

Accountants at Amalgamated Corporation incorrectly journalized a

$50,000 equipment purchase as a debit to Buildings This error was not discovered before the journal entry was posted What is the correcting entry?

1 A Debit Buildings and Credit Equipment for $50,000 each

2 B Debit Equipment and Credit Buildings for $50,000 each

3 C Debit Buildings and Credit Equipment for $100,000 each

4 D Debit Equipment and Credit Buildings for $100,000 each

5 E Debit Equipment for $100,000 and Credit Buildings for $50,000