QUIZ 1 - Accounting Cycle

Debit and credit can be interpreted to mean increase and decrease, respectively.

• false

• true

A credit balance in a liability account indicates that an error in recording has occurred.

• True

• False

Revenues are a subdivision of owner’s capital.

• True

• False

Under the double-entry system, revenues must always equal expenses.

• True

• False

Business documents can provide evidence that a transaction has occurred.

• True

• False

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

• True

• False

All business transactions must be entered first in the general ledger.

• True

• False

Transactions are recorded in alphabetic order in a journal.

• True

• False

Posting is the process of proving the equality of debits and credits in the trial balance.

• True

• False

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

• True

• False