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Accounting Review Sheet TrueFalse Indicate whether the sentence .rtf

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Accounting Review Sheet TrueFalse Indicate whether the sentence .rtf Powered By Docstoc
					Accounting Review Sheet

True/False
Indicate whether the sentence or statement is true or false.

____    1. The accounting equation is most often stated as: Assets + Liabilities = Owner's Equity.
____    2. After each transaction, the accounting equation must remain in balance.
____    3. When two asset accounts are changed in a transaction, there must be an increase and a decrease.
____    4. Asset accounts are listed on the right side of the accounting equation.
____    5. A balance sheet has three major sections--Assets and Liabilities are on the left side and Owner's Equity is on the
           right side.
____    6. The accounting equation must be in balance to be correct.
____    7. Asset accounts are listed on the left side of the accounting equation.
____    8. Accounting is the language of business.
____    9. Keeping personal and business records separate is an application of the business entity concept.
____ 10. The sum of the assets and liabilities of a business always equals the investment of the business owner.
____ 11. The capital account is an owner's equity account.
____ 12. A proprietorship is also known as a sole proprietorship.
____ 13. Anything of value that is owned is a liability.
____ 14. A business has two types of equities.
____ 15. In the United States, business transactions are recorded in U.S. dollars.
____ 16. The capital account is a liability account.
____ 17. The heading of the balance sheet lists the address of the business.
____ 18. Double lines below a column total mean that the totals have been verified as correct.
____ 19. An accounting device used to analyze transactions is a T account.
____ 20. Each asset account has a normal debit balance.
____ 21. Asset accounts increase on the credit side.
____ 22. Each transaction changes the balances in at least two accounts.
____ 23. Cash is an asset account with a normal credit balance.
____ 24. Common accounting practice is to record withdrawals as debits directly in the owner's capital account.
____ 25. A drawing account is decreased by debits and increased by credits.
____ 26. Increases in revenue accounts are recorded as debits because they increase the owner's capital account.
____ 27. Advertising Expense is increased with a debit.
____ 28. Recording transactions in a journal is journalizing.
____ 29. Information for each transaction recorded in a journal is an entry.
____ 30. Transactions are recorded in a journal in chronological order.
____ 31. A check is a business form ordering a bank to pay cash from a bank account.
____ 32. The source document for cash payments is a check.
____ 33. The year and the month are written only once on a general journal page.
____ 34. The day of the month is written on each general journal page only for the first entry.
____ 35. Debits must equal credits for each entry in a general journal.
____ 36. A trial balance is a proof of the equality of debits and credits in a general ledger.
____ 37. A double line ruled across both Trial Balance columns shows that the two columns are to be totaled.
____ 38. Every adjustment has debit and credit parts.
____ 39. A net loss results when total revenue is greater than total expenses.
____ 40. If the Trial Balance columns are not equal and the difference is $50.00, the error most likely is a $25.00 amount
         written in the wrong column.
____ 41. The two accounts affected by the adjustment for supplies are Supplies and Supplies Expense.
____ 42. All financial statements have four-line headings.
____ 43. The formula for calculating net income is total revenue minus total expenses equals net income.
____ 44. The formula for calculating the total expenses component percentage is: total expenses divided by total sales
         equals total expenses component percentage.
____ 45. The current capital to be reported on a balance sheet is calculated as: the capital account balance plus net income
         equals current capital.
____ 46. Double lines are ruled across the balance sheet columns to show that the column totals have been verified as
         correct.
____ 47. When petty cash is replenished, Petty Cash is debited and Cash is credited.


Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.

____ 48. The accounting equation is most often stated as ____.
         a. assets = liabilities                         c. assets = liabilities + owner's equity
         b. cash = assets                                d. liabilities + assets = owner's equity
____ 49. The account used to summarize the owner's equity in a business is ____.
         a. equity                                       c. capital
         b. owner's equity                               d. a liability
____ 50. If cash is increased by $2,000.00 when the owner invests cash in the business, then capital is ____.
         a. increased by $2,000.00                       c. increased by $1,000.00
         b. decreased by $2,000.00                       d. not changed
____ 51. Prepaid Insurance is ____.
         a. an asset account                             c. an owner's equity account
         b. a liability account                          d. none of the above
____ 52. When supplies are bought on account, the business to whom money is owed is ____.
           a. an asset account                              c. an equity account
           b. a liability account                           d. a capital account
____ 53.   When cash is paid on account, ____.
           a. two assets are changed
           b. one asset and owner's equity are changed
           c. one liability and owner's equity are changed
           d. one asset and one liability are changed
____ 54.   Assets are ____.
           a. listed on the right side of the balance sheet
           b. listed on the left side of the balance sheet
           c. listed on both sides of the balance sheet
           d. not listed on the balance sheet
____ 55.   Liabilities are ____.
           a. listed on the right side of the balance sheet
           b. listed on the left side of the balance sheet
           c. listed on both sides of the balance sheet
           d. not listed on the balance sheet
____ 56.   Owner's equity is ____.
           a. listed on the right side of the balance sheet
           b. listed on the left side of the balance sheet
           c. listed on both sides of the balance sheet
           d. not listed on the balance sheet
____ 57.   Total assets are $19,500.00. Cash is paid for $1,500.00 of supplies. The total assets are now ____.
           a. $19,500.00                                    c. $18,000.00
           b. $21,000.00                                    d. $22,500.00
____ 58.   A business has total cash of $30,000.00. Then the business pays $1,000.00 on account, buys insurance coverage
           of $750.00, buys supplies for $1,200.00, and pays $300.00 more on account. The balance of the cash account is
           now ____.
           a. $25,750.00                                    c. $28,700.00
           b. $26,750.00                                    d. none of the above
____ 59.   A business has total assets of $30,000.00. Then the business pays $1,000.00 on account, buys insurance coverage
           of $750.00, buys supplies for $1,200.00, and pays $300.00 more on account. Total assets are now ____.
           a. $25,750.00                                    c. $28,700.00
           b. $26,750.00                                    d. none of the above
____ 60.   When a business pays for insurance, Prepaid Insurance is ____.
           a. increased by a debit                          c. decreased by a debit
           b. increased by a credit                         d. decreased by a credit
____ 61.   The amount paid for rent is recorded as a debit to ____.
           a. Miscellaneous Expense                         c. Supplies
           b. Rent Expense                                  d. Cash
____ 62.   The normal balance side of any liability account is ____.
           a. the debit side                                c. the left side
           b. the credit side                               d. none of the above
____ 63.   On each general journal page, the year is written ____.
           a. for each entry                                c. only for the first entry
           b. on the first line of each column              d. none of the above
____ 64.   On each general journal page, the month is written ____.
           a. for each entry                                c. only for the first entry
           b. on the first line of each column              d. none of the above
____ 65. The account debited when cash is paid for supplies is ____.
         a. Supplies                                      c. Supplies Expense
         b. Cash                                          d. none of the above
____ 66. When cash is paid for insurance, ____.
         a. the prepaid insurance account is decreased
         b. the prepaid insurance account is credited
         c. the balance of the prepaid insurance account is increased
         d. none of the above
____ 67. When total revenue is greater than total expenses, the difference is ____.
         a. a net income                                  c. a debit balance
         b. a net loss                                    d. none of the above
____ 68. A net loss is entered in the work sheet's ____.
         a. Income Statement Debit and Balance Sheet Credit columns
         b. Income Statement Credit and Balance Sheet Debit columns
         c. Balance Sheet Debit and Trial Balance Credit columns
         d. Income Statement Debit and Trial Balance Credit columns
____ 69. The journal entry to adjust Supplies is ____.
         a. debit Supplies; credit Supplies Expense
         b. debit Supplies Expense; credit Supplies
         c. debit Income Summary; credit Supplies
         d. debit Supplies Expense; credit Income Summary
____ 70. The journal entry to adjust Prepaid Insurance is ____.
         a. debit Prepaid Insurance; credit Insurance Expense
         b. debit Insurance Expense; credit Prepaid Insurance
         c. debit Income Summary; credit Prepaid Insurance
         d. debit Insurance Expense; credit Income Summary
Accounting Review Sheet
Answer Section

TRUE/FALSE

      1.   F
      2.   T
      3.   T
      4.   F
      5.   F
      6.   T
      7.   T
      8.   T
      9.   T
     10.   F
     11.   T
     12.   T
     13.   F
     14.   T
     15.   T
     16.   F
     17.   F
     18.   T
     19.   T
     20.   T
     21.   F
     22.   T
     23.   F
     24.   F
     25.   F
     26.   F
     27.   T
     28.   T
     29.   T
     30.   T
     31.   T
     32.   T
     33.   T
     34.   F
     35.   T
     36.   T
     37.   F
     38.   T
     39.   F
     40.   T
     41.   T
    42.   F
    43.   T
    44.   T
    45.   F
    46.   T
    47.   F


MULTIPLE CHOICE

    48.   C
    49.   C
    50.   A
    51.   A
    52.   B
    53.   D
    54.   B
    55.   A
    56.   A
    57.   A
    58.   C
    59.   C
    60.   A
    61.   B
    62.   B
    63.   C
    64.   C
    65.   A
    66.   C
    67.   A
    68.   B
    69.   B
    70.   B

				
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