THE ACCOUNTING INFORMATION SYSTEM

A ledger is where the company initially records transactions and selected other events.

• TRUE
• False

Nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed.

• TRUE
• False

All liability and stockholders’ equity accounts are increased on the credit side and decreased on the debit side..

• TRUE
• False

All liability and stockholders’ equity accounts are increased on the credit side and decreased on the debit side..

• TRUE
• False

The first step in the accounting cycle is the journalizing of transactions and selected other events.

• TRUE
• False

A general journal chronologically lists transactions and other events, expressed in terms of debits and credits to accounts.

• TRUE
• False

Adjusting entries for prepayments record the portion of the prepayment that represents the expense incurred or the revenue earned in the current accounting period.

• TRUE
• False

The book value of any depreciable asset is the difference between its cost and its salvage value.

• TRUE
• False

The ending retained earnings balance is reported on both the retained earnings statement and the balance sheet.

• TRUE
• False

All revenues, expenses, and the dividends account are closed through the Income Summary account.

• TRUE
• False