The accounting process involves all of the following except:

recording nonquantifiable economic events.

identifying economic transactions that are relevant to the business.

communicating financial information to users by preparing financial reports.

analyzing and interpreting financial reports.

If an individual asset is increased, then:

there must be an equal decrease in another asset.

there must be an equal decrease in a specific liability.

there must be an equal decrease in owner's equity.

All of these answer choices are possible.

If total liabilities increased by $6,000, then:

assets must have increased by $6,000, or owner's equity must have decreased by $6,000.

assets must have decreased by $6,000.

owner's equity must have increased by $6,000.

assets and owner's equity each increased by $3,000.

Collection of a $1,500 Accounts Receivable

increases an asset $1,500; decreases an asset $1,500.

increases an asset $1,500; decreases a liability $1,500.

decreases a liability $1,500; increases owner's equity $1,500.

ecreases an asset $1,500; decreases a liability $1,500.

Which of the following events is not a business transaction?

Investment of cash by the owner.

Incurred utility expenses for the month.

Earned revenue for services provided.

The ending owner's equity amount is shown on:

both the balance sheet and the owner's equity statement.

the owner's equity statement only.

both the income statement and the owner's equity statement.

The balance sheet is frequently referred to as:

he statement of financial position.

the statement of owner's equity.

If owner's equity increases from the beginning of the year to the end of the year, then:

net income plus investments is greater than owner drawings

net income is less than owner drawings.

a net loss is less than owner drawings.

additional owner investments are less than net losses.

Juggernaut Company buys a $29,000 van on credit. The transaction will affect the:

income statement and owner's equity statement only.

income statement, owner's equity statement, and balance sheet.

A balance sheet shows:

assets, liabilities, and owner's equity.

revenues, liabilities, and owner's equity.

expenses, drawings, and owner's equity.

revenues, expenses, and drawings.

presents the revenues and expenses for a specific period of time.

summarizes the changes in owner's equity for a specific period of time.

reports the changes in assets, liabilities, and owner's equity over a period of time.

reports the assets, liabilities, and owner's equity at a specific date.

decrease assets and increase liabilities.

decrease both assets and liabilities.

increase both assets and liabilities.

increase assets and decrease liabilities.

The right side of an account

reflects all transactions for the accounting period.

shows all the balances of the accounts in the system.

a way of depicting the basic form of an account.

what the computer uses to organize bytes of information.

a special account used instead of a trial balance.

used for accounts that have both a debit and credit balance

The double-entry system requires that each transaction must be recorded:

in at least two different accounts.

first as a revenue and then as an expense.

A debit to an asset account indicates:

a credit was made to a liability account.

A trial balance would only help in detecting which one of the following errors?

A transposition error when transferring the debit side of journal entry to the ledger

A transaction that is not journalized

A journal entry that is posted twice

Offsetting errors are made in recording the transaction

A trial balance may balance even when each of the following occurs except when:

a transaction is not journalized.

a journal entry is posted twice.

incorrect accounts are used in journalizing.

A trial balance is a listing of:

general ledger accounts and balances.

the totals from the journal pages.

The final step in the recording process is to:

transfer journal information to ledger accounts.

enter the transaction in a journal.

Principles of Accounting

Authored by Thinh Le

Business

Professional Development

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The basic accounting equation states that Assets = Liabilities.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Accountants refer to an economic event as a:

purchase.

sale.

transaction.

change in ownership.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Accounting communicates financial information about a business enterprise to both internal and external users.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Communication of economic events is the part of the accounting process that involves:

identifying economic events.

quantifying transactions into dollars and cents.

preparing accounting reports.

recording and classifying information.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Owner's equity is best depicted by the following:

Assets = Liabilities.

Liabilities + Assets.

Residual equity + Assets.

Assets – Liabilities.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The starting point of the accounting process is:

communicating information to users.

identifying economic events.

recording economic events.

None of these answers are correct.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The origins of accounting are attributed to Luca Pacioli, a famous mathematician.

True

False

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Principles of Accounting

The basic accounting equation states that Assets = Liabilities.

Accountants refer to an economic event as a:

Accounting communicates financial information about a business enterprise to both internal and external users.

Communication of economic events is the part of the accounting process that involves:

Owner's equity is best depicted by the following:

The starting point of the accounting process is:

The origins of accounting are attributed to Luca Pacioli, a famous mathematician.

Management of a business enterprise is the major external user of information.

Owners of business firms are the only people who need accounting information.

The accounting process involves all of the following except:

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