Precision 2 Review-FBLA: T/F 25 Questions

The cash account is used to summarize information about the amount of money the business has available

• true

• false

The source document used when supplies bought on account are paid for is a check.

• true

• false

A journal shows in one place all the changes in a single account

• true

• false

When a business uses EFT to pay vendors, previous arrangements have been made with its bank to process the transactions.

• true

• false

Many businesses choose a one-year fiscal period that ends during a period of high business activity.

• true

• false

A double line ruled across both Trial Balance columns shows that the two columns are to be totaled

• true

• false

Double lines are ruled across the balance sheet columns to show that the column totals have been verified as correct.

• true

• false

The source document for a cash purchase is a memorandum describing the merchandise purchased.

• true

• false

The purchase invoice number assigned by the vendor should be used as the source document number in the journal entry.

• true

• false

A cash payment on account transaction increases the accounts payable account balance and decreases the cash account balance.

• true

• false