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College Accounting

John Price, University of North Texas
M. David Haddock, Chattanooga State Technical Comm. College
Horace Brock, University of North Texas
Connie Hahn, Southern Alberta Institute of Technology
Traven Reed, Canadore College

The General Ledger and Financial Statements

Multiple Choice Questions


1	Which statement tests the accuracy of total debits and credits after transactions have been recorded?
		A)	Income Statement
		B)	Balance Sheet
		C)	Trial Balance
		D)	Owner's Equity


2	What is it called that has all accounts used by a business to record its financial transactions?
		A)	Income Summary
		B)	Book of accounts
		C)	Permanent accounts
		D)	Chart of accounts


3	What are the entries called that are made to record business transactions that are not recorded during the accounting period?
		A)	Adjusting entries
		B)	Correcting entries
		C)	Posting entries
		D)	Matching entries


4	What are the two principles of accounting that affect adjustments?
		A)	Revenue recognition principle and going concern principle
		B)	Matching principle and cost principle
		C)	Revenue recognition and matching principles
		D)	Cost principle and revenue recognition principle


5	An item's value to a firm at the end of the item's useful life is called?
		A)	Residual value
		B)	Salvage value
		C)	Amortized value
		D)	Book value


6	The process of allocating the cost of a long-term asset to operations during its expected useful life is known as
		A)	Dispensing
		B)	Amortization
		C)	Capitalizing
		D)	Accumulating the asset


7	If an asset was purchased for $5000, has a salvage value of $ 800 and a useful life of seven years, what is the yearly amortization expense?
		A)	$ 1200
		B)	$ 800
		C)	$ 600
		D)	$ 950


8	What is the book value of an asset after the fifth year that originally cost $10000, salvage value of $2000 and a life of ten years?
		A)	$ 6000
		B)	$ 4000
		C)	$ 8000
		D)	$ 2000


9	What account is credited when recording amortization?
		A)	Equipment
		B)	Amortization Expense
		C)	Asset
		D)	Accumulated amortization


10	Where do we prepare an adjusted trial balance from?
		A)	General journal
		B)	Chart of accounts
		C)	Balance sheet
		D)	General ledger

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