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18-19 A1 H6 S1 Exam Review

Total questions: 145

Worksheet time: 1hrs 19mins

Name
Class
Date
1.

What is it called when you place the account name and number on an account form?

a)

Opening an account

b)

Opening a form

c)

Starting an account

d)

Starting a form

2.

Debit balance of $100. Making an entry of a $50 credit. What's the new balance?

a)

Credit of $50

b)

Debit of $50

c)

Credit of $100

3.

Credit balance of $100. Credit entry of $100. What's the new balance?

a)

0

b)

credit of $100

c)

credit of $200

4.
You are transferring information from the general debit column to the ledger to an account.  If there is no entry in the form, what will the balance be?
a)
debit
b)
credit
5.
You are recording info in the ledger.  You are posting a debit to an account that already has a debit balance.  What do you do?
a)
add
b)
subtract
c)
just move the number
6.
You are recording info on an account form moving it from the journal to the ledger.  The account has a debit balance and you are making a credit.  What is the new balance?
a)
debit
b)
credit
7.

What is the Post. Ref. column on the account form used for?

a)

To record the date

b)

To record the page number

c)

To record the account number

d)

we don't use it

8.

What does the account number in the post reference column of the journal indicate

a)

The account number

b)

That you have recorded the item in the ledger

c)

That you need to record in the ledger

d)

we don't use it

9.

The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current is known as

a)

general ledger

b)

file maintenance

c)

opening an account

d)

proving cash

10.
A group of accounts is called a 
a)
journal
b)
ledger
c)
post
d)
entry
11.

Transferring information from a journal entry to a ledger account is called

a)

double entry accounting

b)

journalizing

c)

posting

d)

transaction entry

12.
A ledger that contains all accounts needed to prepare financial statements is called
a)
balance sheet ledger
b)
income statement ledger
c)
general ledger
d)
special items ledger
13.
Debit on the 
a)
right
b)
left
14.
Credit on the 
a)
left
b)
right
15.
The number assigned to an account is called
a)
account title
b)
chart of accounts
c)
asset
d)
account number
16.
This is a form recording transactions in chronological order.
a)
journal
b)
ledger
c)
income statement
d)
balance sheet
17.
The last step in the posting steps is to write the ledger account # in the post ref column in the journal (to show that posting is completed).
a)
True
b)
False
18.
The 100 accounts in the Chart of Accounts are liability accounts.
a)
True
b)
False
19.
A new account to be added between 530 and 540 would be assigned number 535.
a)
True
b)
False
20.
The two steps for opening an account are writing the account title and recording the balance.
a)
True
b)
False
21.
Writing the date is the first step in the posting procedure.
a)
True
b)
False
22.
Posting references in a journal are not necessary.
a)
True 
b)
False
23.
The steps for posting are to write the date, journal page number, amount, and balance. 
a)
True
b)
False
24.
The first digit in the account number 120 means that the account is in the ____division of the general ledger.
a)
expense
b)
revenue
c)
asset
d)
liability
25.
TechKnow Consulting arranges expense accounts in chronological order in its general ledger.
a)
True
b)
False
26.

Temporary accounts include assets, expenses, and owner's drawing accounts.

a)

True

b)

False

27.

Temporary accounts are also called nominal accounts.

a)

True

b)

False

28.

Journal entries used to prepare temporary accounts for a new fiscal period are closing entries.

a)

True

b)

False

29.

The balances of liability accounts must be reduced to zero to prepare the accounts for the next period.

a)

True

b)

False

30.

Permanent accounts are used to accumulate information until it is transferred to the owner’s capital account.

a)

True

b)

False

31.

The capital account’s new balance after all closing entries are posted is verified by checking it with the amount of capital shown on the balance sheet at the end of the fiscal period.

a)

True

b)

False

32.

The ending account balances of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period.

a)

True

b)

False

33.

The Income Summary account has a normal debit balance.

a)

True

b)

False

34.

A post-closing trial balance verifies the equality of debits and credits in a general ledger after the closing entries are posted.

a)

True

b)

False

35.

To close a temporary account, an amount equal to its balance is recorded in the account on the side opposite to its balance.

a)

True

b)

False

36.

The series of accounting activities included in recording financial information for a fiscal period is called an accounting cycle.

a)

True

b)

False

37.

The drawing account is a permanent account.

a)

True

b)

False

38.

Temporary accounts must start each fiscal period with a zero balance.

a)

True

b)

False

39.

At the end of a fiscal period, the balances of permanent accounts are summarized and transferred to the owner’s capital account.

a)

True

b)

False

40.

The accounts that appear on the post-closing trial balance are

a)

assets, liabilities, and owner’s capital.

b)

revenue, expenses, and owner’s drawing.

c)

all accounts in the chart of accounts.

d)

all temporary accounts.

41.

The last step in the accounting cycle is to

a)

record transactions in a journal.

b)

prepare a work sheet.

c)

journalize and post closing entries.

d)

prepare a post-closing trial balance.

42.

Income Summary is a(n)

a)

asset account.

b)

liability account.

c)

temporary account.

d)

permanent account.

43.

When the total expenses are greater than the total revenues,

a)

the Income Summary account has a credit balance.

b)

the Income Summary account has a debit balance.

c)

debits equal credits.

d)

none of these.

44.

Accounts used to accumulate information from one fiscal period to the next are

a)

revenue accounts.

b)

permanent accounts.

c)

temporary accounts.

d)

expense accounts.

45.

After the closing entries are posted, the owner’s capital account balance should be the same as shown

a)

on the balance sheet for the fiscal period.

b)

in the work sheet’s Balance Sheet Debit column.

c)

in the work sheet’s Balance Sheet Credit column.

d)

in the work sheet’s Income Statement Debit column.

46.

After closing entries are posted, the balance in the owner’s drawing account should be

a)

a debit.

b)

zero.

c)

a credit.

d)

none of these.

47.

Temporary accounts begin each new fiscal period with a

a)

debit balance.

b)

credit balance.

c)

zero balance.

d)

balance equal to the net income.

48.

The journal entry to close Income Summary when there is a net income is

a)

debit Sales; credit Income Summary.

b)

debit owner’s capital; credit Income Summary

c)

debit owner’s capital; credit Sales.

d)

debit Income Summary; credit owner’s capital.

49.
An endorsement restricting further transfer of a check's ownership.
a)
restrictive endorsement
b)
special endorsement
c)
blank endorsement
d)
cryptic endorsement
50.
An endorsement consisting only of the endorser's signature. 
a)
restrictive endorsement
b)
special endorsement
c)
blank endorsement
d)
cryptic endorsement
51.
An endorsement indicating a new owner of a check.
a)
restrictive endorsement
b)
special endorsement
c)
blank endorsement
d)
cryptic endorsement
52.
A check that a bank refuses to pay.
a)
dishonored check
b)
electronic funds transfer
c)
endorsed check
d)
none of these
53.
A bank account from which payments can be ordered by a depositor.
a)
checking account
b)
petty cash
c)
restrictive endorsement
d)
none of these
54.
A report of deposits, withdrawals, and bank balances sent to a depositor by a bank.
a)
bank statement
b)
debit card
c)
electronic funds transfer
d)
postdated check
55.
A form showing proof of a petty cash payment.
a)
petty cash slip
b)
dishonored check
c)
postdated check
d)
all of these
56.
A signature or stamp on the back of a check transferring ownership.
a)
endorsement
b)
code of conduct
c)
bank statement
d)
debit card
57.
A check with a future date on it.
a)
postdated check
b)
dishonored check
c)
cancelled check
d)
cleared check
58.
Ownership of a check cannot be transferred.
a)
True
b)
False
59.
Voided checks should be recorded in the journal.
a)
True
b)
False
60.
Using a memo as the source document for a dishonored check is an application of the accounting concept Objective Evidence.
a)
True
b)
False
61.
The petty cash fund is a liability with a normal debit balance.
a)
True
b)
False
62.
When petty cash is replenished, Petty Cash is debited and Cash is credited.
a)
True
b)
False
63.
A check with a blank endorsement can be cashed by anyone who has the check.
a)
True
b)
False
64.
An outstanding check is one that has been issued but not yet reported on a bank statement by the bank.
a)
True
b)
False
65.
A bank requires that the signature of the person authorized to sign checks be on the signature card.
a)
True
b)
False
66.
The source document for an electronic funds transfer is a memo.
a)
True
b)
False
67.
The source document for a debit card purchase is a memorandum.
a)
True
b)
False
68.
Each time cash or checks are placed in a bank account, the customer prepares a
a)
signature card
b)
deposit slip
c)
check
d)
none of these
69.
An endorsement on the back of a check consisting only of a signature is
a)
a blank endorsement
b)
a special endorsement
c)
a restrictive endorsement
d)
an incorrect endorsement
70.
A lost check with a blank endorsement on it can be cashed by
a)
anyone who has the check
b)
only the person whose name follows the words "Pay to the order of"
c)
only the person who endorsed the check
d)
no one
71.
An endorsement on the back of a check consisting of the words "Pay to the order of"and a new check owner's name is a
a)
blank endorsement
b)
special endorsement
c)
restrictive endorsement
d)
signature endorsement
72.
If any kind of error is made in preparing a check,
a)
a new check should be prepared
b)
VOID should be written on the check stub
c)
VOID should be written on the check
d)
all of the above
73.
An endorsement on the back of a check indicating that the check is to be accepted for deposit only
a)
blank endorsement
b)
special endorsement
c)
restrictive endorsement
d)
signature endorsement
74.
The entry to establish a $200.00 petty cash fund is
a)
debit Cash $200; credit Petty Cash $200
b)
debit Misc. Expense $200; credit Cash $200
c)
debit Petty Cash $200, credit Cash $200
d)
debit Petty Cash $200; credit Misc. Expense $200
75.
A petty cash fund is replenished
a)
daily
b)
weekly
c)
at the end of the month
d)
none of these
76.
The bank statement shows a checking account balance of $5500. There are outstanding checks totaling $600, an outstanding deposit of $400, and a bank service charge of $15. The Cash account balance should be
a)
$5300
b)
$5700
c)
$5285
d)
none of these
77.
An accounting device used to analyze transactions is a T account.
a)
TRUE
b)
FALSE
78.
An amount recorded on the right side of a T account is a debit.
a)
TRUE
b)
FALSE
79.
Each asset account has a normal credit balance.
a)
TRUE
b)
FALSE
80.
Each liability account has a normal debit balance.
a)
TRUE
b)
FALSE
81.
The balance of an account increases on the same side as the normal balance side.
a)
TRUE
b)
FALSE
82.
Asset accounts decrease on the credit side.
a)
TRUE
b)
FALSE
83.
Asset accounts decrease on the credit side.
a)
TRUE
b)
FALSE
84.
Each transaction changes the balances in at least two accounts.
a)
TRUE
b)
FALSE
85.
A list of accounts used by a business is a chart of accounts.
a)
True
b)
False
86.
When cash is paid for supplies, the Supplies account is increased by a credit.
a)
TRUE
b)
FALSE
87.
Common accounting practice is to record withdrawals as debits directly in the owner’s capital account.
a)
TRUE
b)
FALSE
88.
The left side of an asset account is the credit side because asset accounts are on the left side of the accounting equation.
a)
TRUE
b)
FALSE
89.
A drawing account is increased by debits and decreased by credits.
a)
TRUE
b)
FALSE
90.
Increases in expense accounts are recorded as debits because they decrease the owner’scapital account.
a)
TRUE
b)
FALSE
91.
The normal balance side of an Accounts Receivable account is a debit.
a)
TRUE
b)
FALSE
92.
Accounts Payable accounts are increased with a debit.
a)
TRUE
b)
FALSE
93.
Utilities Expense is increased with a debit.
a)
TRUE
b)
FALSE
94.
Cash is increased with a debit.
a)
TRUE
b)
FALSE
95.
Prepaid Insurance is decreased with a credit.
a)
TRUE
b)
FALSE
96.
To summarize withdrawal information separately from the other records, owner withdrawal transactions are recorded in the owner’s capital account.
a)
TRUE
b)
FALSE
97.
Decreases to liability accounts are recorded on the credit side.
a)
TRUE
b)
FALSE
98.
The left side of a T account is the
a)
a. debit side.
b)
b. credit side.
c)
c. normal balance side.
d)
d. equity side.
99.
If an amount is recorded on the side of a T account opposite the normal balance side, the account balance is
a)
a. increased.
b)
b. decreased.
c)
c. unaffected.
d)
d. correct.
100.
The normal balance side of a liability account is the
a)
a. debit side.
b)
b. credit side.
c)
c. decrease side.
d)
d. right side.
101.
When an owner invests cash in a business, the owner’s capital account is
a)
a. increased by a debit.
b)
b. increased by a credit.
c)
c. decreased by a debit.
d)
d. decreased by a credit.
102.
When a business pays cash on account, a liability account is
a)
a. increased by a debit.
b)
b. increased by a credit.
c)
c. decreased by a debit.
d)
d. decreased by a credit.
103.
When cash is received from sales, the change in the owner’s equity is usually recorded
a)
a. on the debit side.
b)
b. directly in the owner’s capital account.
c)
c. as interest revenue.
d)
d. in a separate revenue account.
104.
Increases in a revenue account are shown on a T account’s
a)
a. debit side.
b)
b. left side.
c)
c. credit side.
d)
d. none of these.
105.
When $1,500 cash is received on account,
a)
a. Sales is increased with  credit and Cash is increased with a credit.
b)
b. Accounts Receivable is increased with a debit and Cash is increased with a credit.
c)
c. Accounts Receivable is decreased with a credit and Cash is increased with a debit.
d)
d. Accounts Receivable is decreased with a debit and Cash is increased with a debit.
106.
The normal balance side of any revenue account is the
a)
a. debit side.
b)
b. credit side.
c)
c. right side.
d)
d. none of these.
107.
A list of accounts used by a business.
a)
permanent accounts
b)
chart of accounts
c)
temporary accounts
d)
T account
108.
A financial statement that reports assets, liabilities, and owner’s equity on a specific date.
a)
balance sheet
b)
income statement
c)
work sheet
d)
chart of accounts
109.
A person or business to whom a liability is owed.
a)
proprietor
b)
receiver
c)
creditor
d)
stockholder
110.
Transferring information from a journal entry to a ledger account.
a)
posting
b)
adjusting entries
c)
accounting system
d)
accrual basis of accounting
111.
A proof of the equality of debits and credits in a general ledger.
a)
balance sheet
b)
income statement
c)
trial balance
d)
closing entries
112.
An increase in equity resulting from the sale of goods or services.
a)
expense
b)
revenue
c)
owner's equity
d)
asset
113.
A planned process designed to compile financial data and summarize the results in accounting records and reports.
a)
accrual basis of accounting
b)
accounting system
c)
cash basis of accounting
d)
posting
114.
An accounting device used to analyze transactions.
a)
balance sheet
b)
chart of accounts
c)
income statement
d)
T account
115.
Accounts used to accumulate information until it is transferred to the owner’s capital account.
a)
temporary accounts
b)
chart of accounts
c)
liability accounts
d)
asset accounts
116.
Accounts used to accumulate information from one fiscal period to the next.
a)
temporary accounts
b)
chart of accounts
c)
permanent accounts
d)
T account
117.
Journal entries used to prepare temporary accounts for a new fiscal period.
a)
adjusting entries
b)
closing entries
c)
posting
d)
opening entries
118.
The cost of goods or services used to operate a business.
a)
expense
b)
liability
c)
receivable
d)
payable
119.
Reporting income when earned and expenses when incurred.
a)
cash basis of accounting
b)
accrual basis of accounting
120.
A financial statement showing the revenue and expenses for a fiscal period.
a)
income statement
b)
balance sheet
c)
trial balance
d)
post-closing trial balance
121.
Journal entries recorded to update general ledger accounts at the end of a fiscal period.
a)
adjusting entries
b)
opening entries
c)
closing entries
d)
balancing entries
122.
A transaction recorded in a journal is not considered a permanent record.
a)
T
b)
F
123.
A balance sheet reports financial information for a period of time.
a)
T
b)
F
124.
The source document for an electronic funds transfer is a memorandum.
a)
T
b)
F
125.
The drawing account is a permanent account.
a)
T
b)
F
126.
A transaction for the sale of goods or services results in a decrease in owner’s equity.
a)
T
b)
F
127.
The formula for calculating net income is total revenue minus total expenses.
a)
T
b)
F
128.
If the previous account balance and the current entry posted to an account are both credits, the new account balance is a credit.
a)
T
b)
F
129.
Adjusting entries must be posted to the general ledger accounts.
a)
T
b)
F
130.
Temporary accounts are used to accumulate information until it is transferred to the owner’s capital account.
a)
T
b)
F
131.
If an error is recorded in a journal entry
a)
cancel the error by drawing a neat line through the error.
b)
correct the entry by writing the correct item above the canceled error.
c)
do not erase the incorrect item.
d)
d. all of these.
132.
The first step in the posting procedure is writing the
a)
entry date in the Date column of the account.
b)
journal page number in the Post. Ref. column of the journal.
c)
account number in the Post. Ref. column of the account.
d)
entry amount in the Debit or Credit column of the account.
133.
Income Summary is a(n)
a)
asset account.
b)
liability account.
c)
temporary account.
d)
permanent account.
134.
Assets taken out of a business for the personal use of the owner are called
a)
net income.
b)
net loss.
c)
investments.
d)
withdrawals.
135.
The entry to establish a $200.00 petty cash fund is
a)
debit Petty Cash, $200.00; credit Cash, $200.00.
b)
debit Petty Cash, $200.00; credit Miscellaneous Expense, $200.00.
c)
debit Miscellaneous Expense, $200.00; credit Cash, $200.00.
d)
debit Cash, $200.00; credit Petty Cash, $200.00.
136.
If an amount is recorded on the side of a T account opposite the normal balance side, the account balance is
a)
increased.
b)
decreased.
c)
unaffected.
d)
correct.
137.
On a work sheet, the balance of the owner’s drawing account is extended to the
a)
Income Statement Debit column.
b)
Income Statement Credit column.
c)
Balance Sheet Debit column.
d)
Balance Sheet Credit column.
138.
Information needed to prepare an income statement’s Revenue section is obtained from a work sheet’s Account Title column and
a)
Income Statement Debit column.
b)
Income Statement Credit column.
c)
Balance Sheet Debit column.
d)
Balance Sheet Credit column.
139.
When cash is paid for insurance,
a)
Prepaid Insurance is decreased.
b)
Prepaid Insurance is credited
c)
Prepaid Insurance is increased.
d)
none of these.
140.
The first digit in the account number 410 means that the account is in the
a)
Assets division of the general ledger.
b)
Liabilities division of the general ledger.
c)
Revenue division of the general ledger.
d)
Expenses division of the general ledger.
141.
The journal entry to close Income Summary when there is a net income is
a)
debit Sales; credit Income Summary.
b)
debit owner’s capital; credit Income Summary.
c)
debit Income Summary; credit Sales.
d)
debit Income Summary; credit owner’s capital.
142.
Asset accounts include Cash, Prepaid Insurance, and
a)
Accounts Payable.
b)
Accounts Receivable.
c)
Sales.
d)
Utilities Expense.
143.
The formula for calculating the net income ratio is
a)
net income divided by total sales.
b)
total sales divided by total expenses.
c)
total sales minus total expenses divided by net income.
d)
none of these.
144.
Reporting changes in financial information for a specific period of time in the form of financial statements is an application of the accounting concept
a)
Matching Expenses with Revenue.
b)
Accounting Period Cycle.
c)
Consistent Reporting.
d)
Going Concern.
145.
The normal balance side of any expense account is
a)
the debit side.
b)
the credit side.
c)
the right side.
d)
either the debit side or credit side.

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