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| 1.
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Cheques, invoices, and sales receipts are examples of business papers. |
| | A) | True |
| | B) | False |
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| 2.
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An account is used to record and summarize the increases and decreases in each type of revenue, expense, asset, liability, or owner's equity item. |
| | A) | True |
| | B) | False |
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| 3.
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Prepaid insurance is an example of an asset that will be consumed in the operation of the business; and as it is consumed, it will become an expense for the time period in which it was consumed. |
| | A) | True |
| | B) | False |
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| 4.
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When a firm collects money in advance of providing a service or delivering a product to a customer, the amount should be recorded as a prepaid asset. |
| | A) | True |
| | B) | False |
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| 5.
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The term credit, as it is used in recording journal entries, means to increase the balance of an account. |
| | A) | True |
| | B) | False |
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| 6.
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Any transaction, no matter how complex, can be recorded in a general journal under the double-entry accounting system. |
| | A) | True |
| | B) | False |
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| 7.
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A journal entry in which more than two accounts are involved is known as a combined journal entry. |
| | A) | True |
| | B) | False |
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| 8.
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A journal is known as a book of final entry. |
| | A) | True |
| | B) | False |
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| 9.
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The group of accounts used by a business in recording its transactions is known as the ledger. |
| | A) | True |
| | B) | False |
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| 10.
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Transcribing the debit amounts and the credit amounts from the general journal to the accounts in the ledger for summarization is known as posting. |
| | A) | True |
| | B) | False |
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| 11.
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When posting manually to the general ledger, it is not necessary to record the number of the posted account in the general journal when you are certain that you have posted to the correct account. |
| | A) | True |
| | B) | False |
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| 12.
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Electronic posting is more complicated than manual posting. |
| | A) | True |
| | B) | False |
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| 13.
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A list of all the accounts with balances, and their respective balances, is called a balance sheet or statement of financial position. |
| | A) | True |
| | B) | False |
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| 14.
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A trial balance with equal debit and credit totals is proof that no errors occurred in the journalizing or posting procedures used by the bookkeeper. |
| | A) | True |
| | B) | False |
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| 15.
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Cash, Prepaid Insurance, Office Supplies, and Rent Expense are accounts that will increase when debited. |
| | A) | True |
| | B) | False |
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| 16.
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Prepaid Insurance, Cash, Accounts Receivable, Notes Receivable, Land, and Unearned Revenues are all classified as asset accounts. |
| | A) | True |
| | B) | False |
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| 17.
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All receivables are classified as liability accounts and all payables are classified as asset accounts. |
| | A) | True |
| | B) | False |
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| 18.
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The owner's Capital account will increase with additional investment, increase with net income (revenues larger than expenses) and decrease with withdrawals by the owner. |
| | A) | True |
| | B) | False |
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| 19.
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On the chart of accounts revenues may be numbered in the 400's followed by expenses numbered in the 500's. |
| | A) | True |
| | B) | False |
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| 20.
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The left side of an account is always the debit side and always the increase side. |
| | A) | True |
| | B) | False |
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| 21.
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The normal balance for assets and expenses is a debit balance. The normal balance for liabilities, equities (except withdrawals), and revenues is a credit balance. |
| | A) | True |
| | B) | False |
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| 22.
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The Cash account has debits totaling $4,500 and credits totaling $4,600. The account balance is a normal balance of $100. |
| | A) | True |
| | B) | False |
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| 23.
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Prepaid Insurance is classified as a liability account. An increase in the account should be recorded on the credit side. |
| | A) | True |
| | B) | False |
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| 24.
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Unearned Revenue is classified as a revenue account. An increase in the account should be recorded on the credit side. |
| | A) | True |
| | B) | False |
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| 25.
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Kate Sutton, Withdrawal is classified as an equity (withdrawals) account. An increase in the account should be recorded on the debit side. |
| | A) | True |
| | B) | False |
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| 26.
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Accounts Payable is classified as an asset account. A decrease in the account should be recorded on the credit side. |
| | A) | True |
| | B) | False |
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| 27.
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Accounts Receivable is classified as an asset account. An increase in the account should be recorded on the debit side. |
| | A) | True |
| | B) | False |
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| 28.
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Kate Sutton, Capital is classified as an equity (Capital) account. An increase in the account should be recorded on the debit side. |
| | A) | True |
| | B) | False |
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