Accounting 26th Edition Carl Warren James M Reeve Jonathan Duchac – Test Bank

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Accounting 26th Edition Carl Warren James M Reeve Jonathan Duchac – Test Bank

 Sample Questions

Instant Download With Answers

Chapter 02

 

 

1. Accounts are records of increases and decreases in individual financial statement items.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.01 – Purpose

ACCT.ACBSP.APC.02 – GAAP

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

2. A chart of accounts is a listing of accounts that make up the journal.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.01 – Purpose

ACCT.ACBSP.APC.02 – GAAP

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

3. The chart of accounts should be the same for each business.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.03 – Business FormsACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

 

4. Accounts payable are accounts that you expect will be paid to you.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.04 – Cash vs. AccrualACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

5. Consuming goods and services in the process of generating revenues results in expenses.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

6. Prepaid expenses are an example of an expense.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.04 – Cash vs. AccrualACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

 

7. The Unearned Revenues account is an example of a liability.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.04 – Cash vs. AccrualACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

8. The Drawings account is an example of an expense.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

9. Accounts in the ledger are usually maintained in alphabetical order.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

 

 

10. Depending on the account title, the right side of the account is referred to as the credit side.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

11. To determine the balance in an account, always subtract credits from debits.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

12. An account in its simplest form has three parts to it: a title, an increase side, and a decrease side.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

 

 

13. The T account got its name because it resembles the letter “T.”
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

14. The right hand side of a T account is known as a debit and the left hand side is known as a credit.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

15. Debiting the cash account will increase the account.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

 

 

16. A credit to the cash account will increase the account.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

17. The cash account will always be debited.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

18. The recording of cash receipts to the cash account will be done by debiting the account.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

 

19. The recording of cash payments from the cash account is done by entering the amount as a credit.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

20. The balance of the account can be determined by adding all of the debits, adding all of the credits, and adding theamounts together.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Challenging

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

21. Liabilities are debts owed by the business entity.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.03 – Business FormsACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

 

22. The accounts payable account is listed in the chart of accounts as an asset.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.16 – Current Liabilities ReportingACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

23. A drawing account represents the amount of withdrawals made by the owner.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.03 – Business FormsACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

24. Revenues are equal to the difference between cash receipts and cash payments.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.04 – Cash vs. AccrualACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

 

25. Expenses result from using up assets or consuming services in the process of generating revenues.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

26. Owner’s equity will be reduced by the amount in the drawing account.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.03 – Business FormsACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

27. When an owner invests assets in the business, the capital account increases due to revenue being earned.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

 

28. When an account receivable is collected in cash, the total assets of the business increase.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.15 – Current Assets ReportingACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

29. When an account payable is paid with cash, the owner’s equity in the business decreases.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-01 – 02-01

ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.16 – Current Liabilities ReportingACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

30. For a month’s transactions for a typical medium-sized business, the salary expense account is likely to have onlycredit entries.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

31. A debit is abbreviated as Db and a credit is abbreviated as Cr.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.05 – Accounting CycleACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

32. When a business receives a bill from the utility company, no entry should be made until the invoice is paid.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.ACBSP.APC.16 – Current Liabilities ReportingACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

33. For a month’s transactions for a typical medium-sized business, the accounts payable account is likely to have onlycredit entries.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

 

34. Withdrawals decrease owner’s equity and are listed on the income statement as a deduction from revenue.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.09 – Financial StatementsACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

35. The normal balance of revenue accounts is a credit.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

36. The normal balance of an expense account is a credit.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

 

 

37. The normal balance of the drawing account is a debit.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

38. Expense accounts are increased by credits.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

39. The normal balance of a capital account is a debit.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.2-02 – 2-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

 

 

40. Revenue accounts are increased by credits.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

41. Liability accounts are increased by debits.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

42. Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

 

43. Transactions are listed in the journal chronologically.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

44. Journalizing is the process of entering amounts in the ledger.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

45. The process of recording a transaction in the journal is called journalizing.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

46. Transactions are initially entered into a record called a journal.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

47. The double-entry accounting system records each transaction twice.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

48. The increase side of an account is also the side of the normal balance.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

49. Journal entries include both debit and credit accounts for each transaction.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

50. A transaction that is recorded in the journal is called a journal entry.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

51. Assets are increased with debits and decreased with credits.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

52. Liabilities are increased with debits and decreased with credits.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

53. Debits will increase Unearned Revenues and Revenues.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.04 – Cash vs. AccrualACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

54. All owners’ equity accounts record increases to the accounts with credits.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Challenging

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

55. Journalizing always eliminates fraudulent activity.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.01 – Purpose

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

56. Journal entries can have more than two accounts as long as the debits equal the credits.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.AICPA.FN.03 – MeasurementBUSPROG: Analytic

 

 

57. Normal account balances are on the increase side of the accounts.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-02 – 02-02

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

58. The process of transferring the data from the journal to the ledger accounts is called posting.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-03 – 02-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

59. The post reference notation used in the ledger is the account number.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.02-03 – 02-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.06 – Recording TransactionsACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

chapter 04

1. Cross-referencing is useful in assuring that the debits and credits are in balance.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-01 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

2. When accounts do not appear on the unadjusted trial balance but are needed to post adjustments, they are simply added to the account title column.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-01 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

3. Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-01 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.09 – Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

4. There is really no benefit in preparing financial statements in any particular order.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

5. On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

6. The usual presentation of the statement of owner’s equity is (1) Beginning capital, (2) Net income or loss, (3) Drawing, (4) Owner’s contributions, (5) Ending capital.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

7. The difference between a classified balance sheet and one that is not classified is that the classified one has
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

8. Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the normal operations of a business, usually longer than one year, are called current assets.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.ACBSP.APC.15 – Current Assets Reporting ACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

9. Prepaid Insurance is an example of a current asset.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.15 – Current Assets Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

 

10. Land is an example of a plant asset.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.13 – Long-term Assets Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

11. Liabilities that will be due within one year or less and that are to be paid out of current assets are called current
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.16 – Current Liabilities Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

12. The amount of the net income for a period appears on both the income statement and the balance sheet for that
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

13. Accrued taxes payable are generally reported on the balance sheet as a current liability.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.ACBSP.APC.16 – Current Liabilities Reporting ACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

14. Office Equipment is an example of a current asset account.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.15 – Current Assets Reporting ACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

15. Capital and drawing are reported in the owner’s equity section of the balance sheet.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

 

16. Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.ACBSP.APC.15 – Current Assets Reporting ACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

17. Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.ACBSP.APC.15 – Current Assets Reporting ACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

18. Accrued expenses are ordinarily listed on the balance sheet as current assets.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.ACBSP.APC.15 – Current Assets Reporting ACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

 

 

 

19. Accrued revenues are ordinarily listed on the balance sheet as current liabilities.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.ACBSP.APC.16 – Current Liabilities Reporting ACCT.AICPA.FN.03 – Measurement

BUSPROG: Analytic

 

20. The income statement is prepared from the adjusted trial balance or the income statement columns on the work
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT. WARD – 04-APP

ACCT.WARD.16.04-02 – 04-01

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

21. After analyzing transactions, the next step would be to post the transactions in the ledger.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-01 – 04-01

ACCT.WARD.16.04-04 – 04-04

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

22. Examples of temporary accounts are supplies and prepaid expenses which are in the ledger for just a short time before they expire.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.02 – GAAP

ACCT.ACBSP.APC.09 – Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

23. Accumulated Depreciation is a permanent account.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.09 – Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

24. The drawing account is a temporary account.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.06 – Recording Transactions ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

25. The balance sheet accounts are referred to as real or permanent accounts.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

26. Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting period.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

27. The income summary account is closed to the owner’s capital account.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

28. The accumulated depreciation account is closed to the income summary account.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

29. The drawing account is closed to the income summary account.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

30. The trial balance prepared after all the closing entries have been posted is called a pre-closing trial balance.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

31. Entries required to close the balances of the temporary accounts at the end of the period are called final entries.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

32. Journalizing and posting closing entries must be completed before financial statements can be prepared.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

33. During the closing process, some balance sheet accounts are closed and end the period with a zero balance.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

34. Closing entries are entered directly on to the work sheet.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

35. The post-closing trial balance will generally have fewer accounts than the trial balance.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

36. A post-closing trial balance contains only asset and liability accounts.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

37. A post-closing trial balance should be prepared before the financial statements are prepared.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

38. Assets, liabilities, and owner’s capital are real accounts and do not get closed at the end of the period.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

39. The income summary account is also known as the clearing account.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.ACBSP.APC.09 – Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

40. All income statement accounts will be closed at the end of the period.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

41. Accounts reported on the balance sheet that are carried forward from year to year are known as permanent
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.09 – Financial Statements

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

42. Balance sheet accounts are not considered real accounts.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.ACBSP.APC.09 – Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

43. Real accounts are not permanent accounts.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.ACBSP.APC.09 – Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

44. It is not necessary to post the closing entries to the general ledger.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

45. The closing process is sometimes referred to as closing the books.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

46. Once an account has been closed for the period, inserting a line in the balance columns zeros out the account, making it ready for the following period.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-03 – 04-03

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.08 – Closing Entries

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

47. The last step of the accounting cycle is to prepare a post-closing trial balance.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-04 – 04-04

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

48. The most important output of the accounting cycle is the financial statements.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-04 – 04-04

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

49. The accounting cycle begins with preparing an unadjusted trial balance.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-04 – 04-04

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

50. Financial statements should be prepared before the closing entries are journalized and posted.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-04 – 04-04

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

51. The unadjusted, adjusted, and final trial balances are prepared during the accounting cycle of a period.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-04 – 04-04

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

52. Any twelve-month accounting period adopted by a company is known as its fiscal year.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-06 – 04-06

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.BB.01 – Industry

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

53. A fiscal year that ends when business activities have reached their lowest point is called the natural business year.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-06 – 04-06

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.BB.01 – Industry

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

54. All companies must use a calendar year as their fiscal year.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-06 – 04-06

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.BB.01 – Industry

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

55. The majority of businesses end their fiscal year on December 31.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-06 – 04-06

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.BB.01 – Industry

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

56. The balances of the capital accounts from the Adjusted Trial Balance of the work sheet are extended to the Statement of Owner’s Equity columns.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-APP – 04-APP

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

57. The work sheet is not considered a part of the formal accounting records.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-APP – 04-APP

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

 

58. The work sheet is a working paper that accountants can use to summarize adjusting entries and the account balances for the financial statements.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-APP – 04-APP

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.09 – Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

59. The trial balance may be listed on the work sheet instead of being prepared separately.
    1. True
    2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-APP – 04-APP

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

60. The totals of the Adjusted Trial Balance columns on a work sheet will always be the sum of the Trial Balance column totals and the Adjustments column totals.
    1. True
    2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.04-APP – 04-APP

ACCREDITING STANDARDS:  ACCT.ACBSP.APC.05 – Accounting Cycle

ACCT.ACBSP.APC.08 – Closing Entries ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic