question

when financial records for a business and for it's owners personal belongings are not mixed,this is an application of the business entity accounting concept

answer

true

question

the equation must be in balance to be correct

answer

true

question

assets such as cash and supplies have value because they can be used to acquire other assets or to operate a business

answer

true

question

anything of value that is owned is a liability

answer

false-asset

question

assets have value because they can be used to acquire other assets or to operate the business

answer

true

question

individuals or other businesses owes money have rights to the business's assets

answer

true

question

amount in an account is an account balance

answer

true

question

Capital account is a liability

answer

false-owners equity

question

A transaction for the sale of goods or services results in an increase in owners equity

answer

true

question

A withdrawal is an expense

answer

false-owners equity

question

regardless of when payment is made when services are sold the revenue should be recorded at the time of the sale

answer

true

question

An accounting device used to analyze transactions is a T account

answer

true

question

each liability account has a normal credit balance

answer

true

question

The balance on the account increases on the same side as a normal balance side

answer

true

question

asset accounts increase on the credit side

answer

false-debit

question

The balance on an account decreases on the side opposite the normal balance side

answer

true

question

Capital is an owners equity account with a normal debit balance

answer

false-credit

question

when cash is paid for supplies the supplies account is increased by a debit

answer

true

question

common accounting practice is to record withdrawals as debits directly in the owners capital account

answer

false-credit

question

The balance of a drawing account represents the total value of assets taken out of a business by the owner

answer

true

question

increases in expense accounts are recorded directly in the owners capital account

answer

false-expense

question

The normal balance side of an Accounts Receivable account is a credit

answer

false-debit

question

The normal balance side of an Accounts Payable account is a credit

answer

true

question

accounts Receivable accounts are increased with a debit

answer

true

question

accounts payable accounts are increased with a debit

answer

false-credit

question

advertising expenses increased with a debit

answer

true

question

Stena Jones drawing is decreased with the credit

answer

true

question

accounts Receivable is increased with a debit

answer

true

question

prepaid insurance is decreased with a credit

answer

true

question

A receipt is the source document for cash received from transactions other than sales

answer

true

question

The source document for sales invoice is abbreviated as S I in a journal entry

answer

false-s

question

if there is only one blank line remaining on a journal page is a standard practice to split the entry and record the second line of the entry on the next page

answer

false-wait for next page

question

A source document is a form for recording transactions in chronological order

answer

false

question

A chart of accounts is the list of account titles and number showing the location of each account in the ledger

answer

true

question

The procedure of arranging accounts in the general ledger assigning account numbers and keeping records current is post

answer

false-journalizing

question

The business has only two asset accounts cash and supplies the two accounts are numbered 110 and 120

answer

true

question

because an account form has columns for the debit and credit balance of an account is often return referred to as the balance-ruled account form

answer

true

question

each amount in the debit and credit columns of a general journal is posted to the account written in the account title column

answer

true

question

if the cash balance in the checkbook equals the cash balance in the cash account cash is proved

answer

true

question

Ledger is a group of accounts

answer

true

question

A ledger that contains all accounts needed to prepare financial statements is a general ledger

answer

true

question

when making a correcting entry the same four steps are followed as when making any journal entry

answer

true

question

The second division in the chart of accounts is the owners equity's division

answer

false-liability

question

most businesses make major payments with cash

answer

false-check

question

A check with a future date on it is a post dated check

answer

true

question

most banks will except postdated checks

answer

false

question

banks usually refused to except altered checks

answer

true

question

voided check should be recorded in the journal

answer

true

question

when a bank statement is received the depositor should verify its accuracy immediately

answer

true

question

The petty cash fund is a liability with a normal debit balance

answer

false-asset

question

A signature card for businesses checking account should only show the signature of the business owner

answer

false-all who can use account

question

because cash transactions occur more frequently than other transactions the chances for making recording errors affecting cash or less

answer

false-more

question

A check with the blank endorsement can be cashed by anyone who has the check

answer

true

question

not only do banks charge a fee for handling a dishonor check but they also deduct the amount of the check from their account

answer

true

question

if any kind of error is made in preparing a check a new check should be prepared and the old check should be thrown away immediately

answer

false-voided

question

A bank requires that the signature of the person authorized to sign checks be on the signature card

answer

true

question

The only difference in the journal entry for cash payment by check into cash payment by electronic funds transfer is the source document

answer

true

question

A fiscal is also known as the accounting period

answer

true

question

all fiscal periods must begin on January 1

answer

false

question

all account balances are written in the trial balance credit column

answer

false

question

when the income statement credit column total is greater than the income statement debit column total on a worksheet the business has a net income

answer

true

question

A net loss results when total revenue is greater than total expenses

answer

false-other way

question

two financial statements are prepared from the information on the worksheet

answer

true

question

when two column totals are not in balance on the worksheet the difference between the two totals is calculated and checked

answer

true

question

if the difference between the totals of debit and credit columns can even be evenly divided by nine then the error is most likely in addition

answer

false-2 numbers switched

question

Errors in general ledger account should never be erased

answer

true

question

most errors occur in doing arithmetic

answer

true

question

reporting in the same fiscal period the revenue earned and the expenses incurred to earn that revenue is an application of the accounting concept matching expenses with revenue

answer

true

question

amounts for the worksheets income statement debit column are used in preparing the expense section of an income statement

answer

true

question

for service business the revenue reported on the income statement includes components for total expenses and net income

answer

true

question

information needed to prepare the assets section of the balance sheet is obtained from the worksheets account title column and the balance sheet credit column

answer

false

question

A component percentage is the percentage relationship between one financial statement item and the total that includes that item

answer

true

question

The income statement for a service business has 5 Sections: Heading revenue expenses net income or loss and capital

answer

false-no capital

question

The worksheet is used to assist in preparing the revenue expenses and net income sections on income statement

answer

true

question

single lines ruled across an amount column of an income statement indicate the amounts are to be added

answer

true

question

The ending account balances of a permanent accounts for one fiscal. Are the beginning account balances for the next fiscal

answer

true

question

The end of the fiscal period the balance of temporary accounts are summarized and transferred to the owners capital account

answer

true

question

to close a temporary account an amount equal to its balance is recorded in the account on the side opposite of its balance

answer

true

question

A source document is prepared for closing entries

answer

false

question

The balances of the expense accounts must be reduced to zero to prepare the accounts for the next fiscal period

answer

true

question

all accounts in a general ledger are listed on a post closing trial balance

answer

false-permenant

question

The cost account purchases is used only to record the selling price of the merchandise sold

answer

false-merchandise paid by cash

question

when purchases are recorded at their cost including any related shipping costs and taxes the historical cost accounting concept is being applied

answer

true

question

A purchase invoice list only the total cost of the merchandise

answer

false-discount too

question

what supplies are purchased for the use in the business the amount is recorded in the purchases account

answer

false-supplies-office

question

A special journal entry is made to show the amount of a trade discount

answer

false

question

purchases discounts are recorded in a general journal account called purchases discount

answer

false-cash payments purchase disc. column

question

The normal account balance of purchases returns and allowances is a debit

answer

false-credit

question

when store supplies are purchased on account the store supplies account balance increases and then counts payable account balance increases

answer

true

question

to begin a new journal page the totals from the previous journal page are carried forward to the next journal page

answer

true

question

purchases and sales of merchandise are the two major activities of a merchandising business

answer

true

question

The amount of sales tax collected is recorded in a separate liability account titled sales tax payable

answer

true

question

A customer uses a credit card promises to pay the bank that issued the credit card at a later date

answer

true

question

sales for cash and credit cards are recorded as a single cash sales transaction

answer

true

question

sales tax is a tax on sale of merchandise or services

answer

true

question

A credit card sale is a sale at which cash is received for the total amount of the sale at the time of the transaction

answer

false-later

question

A cash sale is a sale in which a credit card is used little amount of the sale at the time of the transaction

answer

false-cash

question

accounts Receivable is an asset account with a normal debit balance

answer

true

question

when cash is received on account cash increases and Accounts Receivable is increased

answer

false- accounts recievable is decreased

question

A special journal used to record only cash receipts transactions is a cash receipts journal

answer

true

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