stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
ACCTG 201: The Accounting Information System & Accrual Accounting Concepts Flashcards | StudBud
Explore
/
ACCTG 201: The Accounting Information System & Accrual Accounting Concepts
ACCTG 201: The Accounting Information System & Accrual Accounting Concepts
84 terms
·
StudBud Administration
·
128 plays
Wiley 3,4
Flashcards
84 cards
F
Practice quiz
P
Host live
L
Questions
84
Answers
1
The procedure of transferring journal entries to the ledger accounts is called
posting
analyzing
journalizing
allocating
2
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
in two sets of books
in a journal and in a ledger
3
A T-account is
a special account used instead of a journal
a special account used instead of a trial balance
used for accounts that have both a credit and debit balance
a way of depicting the basic form of an account
4
Which of the following describes the classification and normal balance of the Unearned Revenues account?
liability, credit
expense, debit
revenues, credit
asset, debit
5
A trial balance will not balance if
accounts payable is debited for $300 and cash is credited for $300
the transaction is not posted at all
a correcting journal entry is posted twice
dividends is debited for $500 and to cash is credited for $50
6
A trial balance
will tell you if a transaction is not posted at all
proves the factual accuracy of the journalized transactions
is a list of accounts with the balances at a point in time
will not balance if a correct journal entry is posted twice
7
An investment by the stockholders in a business increases
assets and liabilities
liabilities and stockholders' equity
assets and stockholders' equity
assets only
8
The purchase or sale of long-lived assets used in operating the business is
none of the answers are correct
a financing activity
an investing activity
an operating activity
9
An asset was debited for $1,000 and a liability credited for $500. How would you complete recording the transaction?
debit a stockholders' equity account for $500
credit a different asset account for $500
nothing further must be done
debit another asset account for $500
10
Under the accrual basis of accounting
cash must be received before revenue is recognized
the ledge accounts must be adjusted to reflect cash basis
revenues are recognized in the accounting period in which they are earned.
net income is calculated by matching cash in vs cash out
11
Borrowing money and issuing shares of stock are
investing activities
financing activities
operating activities
none of the answers are correct
12
A trial balance proves
that all transactions have been posted
the mathematical equality of debits and credits after the posting process
that all transactions have been recorded correctly
the ledger is posted correctly
13
Transactions are entered into the ledger first then they are analyzed in terms of their effect on the accounts.
False
True
14
If a business pays rent in advance and debits Prepaid Rent, the company receiving the rent should credit
accrued rent revenue
unearned rent revenue
cash
prepaid rent
15
If a company fails to adjust its accrued revenues account at the end of the accounting period
assets will be understated and revenues will be understated
assets will be overstated and revenues will be understated
liabilities will be overstated and revenues will be understated
liabilities will be understated and revenues will be understated
16
Collection of a $600 Accounts Receivable
increases an asset $600; decreases a liability $600
decreases an asset $600; decreases a liability $600
decreases a liability $600; increases stockholders' equity $600
increases an asset $600; decreases an asset $600
17
An awareness of the normal balances of accounts would help you spot which of the following errors?
A credit balance in an expense account
a debit balance in the Dividends account
A credit balance in a revenue account
A credit balance in a liabilities account
18
A revenue generally
increases assets and stockholders' equity
leaves total assets unchanged
increases assets and decreases stockholders' equity
increases assets and liabilities
19
The general ledger
contains only asset and liability accounts
is a collection of the entire group of accounts maintained by a company
should show accounts in alphabetical order
provides a forensic record of transactions
20
If a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck,
equity will be reduced by $40,000
assets will be increased by $10,000
assets will be increased by $40,000
assets will be unchanged
21
The purchase of an asset for cash
increases assets and liabilities
decreases assets and increases liabilities
decreases liabilities and increases assets
leaves total assets unchanged
22
Which of the following accounts is increased with a debit?
interest payable
service revenue
common stock
dividends
23
The purchase of an asset on credit
increases assets and liabilities
increases assets and stockholder's equity
decreases assets and increases liabilities
leaves total assets unchanged
24
A credit is NOT a normal balance for which account listed below?
common stock
revenue
liability
dividends
25
Which one of the following is not a part of an account?
title
trial balance
debit side
credit side
26
Which of the following items has no effect on retained earnings?
revenue
expenses
land purchase
dividends
27
Which accounts normally have debit balances?
assets, expenses, retained earnings
assets, liabilities, dividends
assets, expenses, dividends
assets, expenses, revenues
28
Which of the following describes the classification and normal balance of the Retained Earnings account?
asset, debit
stockholders' equity, credit
revenues, credit
expense, debit
29
A debit to an asset account indicates a(n)
credit was made to a liability account
decrease in the asset
increase in the asset
error
30
The right side of an account
is the credit side
is the correct side
reflects all transactions for the accounting period
shows all the balances of the accounts in the system
31
A revenue account
is increased by debits
has anormal debit balance
is increased by credits
is decreased by credits
32
An asset is purchased on Dec 1 for $3,000, annual depreciation is expected to be $500. What is depreciation at Dec 31?
$3,000
$$6
$500
$42
33
The primary purpose of the trial balance is to
prove the equality of the debit and credit amounts after posting
make sure a journal entry is not posted twice
disclose the complete effect of a transaction in one place
transfer journal entries to the ledger accounts
34
All of the following are characteristics of every accounting information system except it is a system
that collects transaction data
that communicates financial information to decision makers
of data storage hardware for the chart of accounts
that processes transaction data
35
In its simplest form, an account consists of all of the following except
left side
account title
explanation column
right (credit) side
36
Receiving payment of a portion of an accounts receivable will
increase liabilities
not affect total assets
increase stockholders' equity
decrease net income
37
Which accounts normally have credit balances?
revenues, liabilities, expenses
revenues, liabilities, dividends
revenues, liabilities, assets
revenues, liabilities, retained earnings
38
A corporation paid dividends of $5,000. As a result of this event, the
dividends account was increased by $5,000
dividends account was decreased by $5,000
cash was increased and dividends decreased by $5,000
cash account was increased by $5,000
39
If services are rendered on account, then
liabilities will decrease
stockholder's equity will increase
assets will decrease
liabilities will increase
40
The best interpretation of the word “credit” is the
offset side of an account
right side of an account
decrease side of an account
increase side of an account
41
Service revenue should be recorded on the income statement
when cash is received
in the period the income taxes are paid
when the services generating the income have been completed
at the end of the accounting period
42
The left side of an account is
blank
the debit side
the balance of the account
a description of the account
43
Which account will have a zero balance after closing entries have been journalized and posted?
advertising supplies
accumulated depreciation
service revenue
prepaid insurance
44
An account is a part of the financial information system and is described by each one of the following except
an account has a debit and credit side
an account is a source document
an account has a title
an account consists of three parts
45
Which of the following is not part of the recording process?
analyzing transactions
preparing a trial balance
posting journal entries
entering transactions in a journal
46
A liability - revenue relationship exists with
revenue accounts
accrued expense adjusting entries
asset accounts
unearned revenue adjusting entries
47
A paid dividend
increases assets and decreases stockholders' equity
increases assets and stockholders' equity
decreases assets and stockholders' equity
decreases assets and increases stockholders' equity
48
Collection of a $600 Accounts Receivable
increases an asset $600; decreases a liability $600
decreases a liability $600; increases stockholders' equity $600
increases an asset $600; decreases an asset $600
decreases an asset $600; decreases a liability $600
49
Company A received a cash advance of $430 from a customer. As a result of this event
both assets and equity increased
liabilities decreased by $430
assets increased by $430
equity increased by $430
50
The receipt of cash in advance from a customer
increases assets and stockholders' equity
increases assets and decreases stockholders' equity
none of the answers are correct
increases assets and liabilities
51
When collection is made on Accounts Receivable,
stockholders' equity will increase
total assets will increase
total assets will remain the same
total assets will decrease
52
In recording an accounting transaction in a double-entry system
there must only be two accounts in any transaction
the amount of debits must equal the amount of credits
there must always be entries on both sides of the accounting equation
the number of debits amounts equal the number of credit amounts
53
The purpose of the post-closing trial balance is to
prove the equality of the permanent account balances
prove the equality of the temporary account balances
prove that no mistakes were made
list all the balance sheet accounts
54
A company purchased equipment for $1,800 cash. As a result of this event,
equity decreased by $1,800
total assets remained unchanged
Both assets and equity decreased by $1,800
assets increased by $1,800
55
Which of the following describes the classification and normal balance of the Unearned Rent Revenue account?
liability, credit
expense, debit
revenues, credit
asset, debit
56
An account consists of
title, right side, debit balance
title, debit side, credit side
title, debit balance, credit balance
title, left side, debit side
57
Receiving payment of a portion of an accounts receivable will
not affect toal assets
increase liabilities
increase stockholders' equity
decrease net income
58
Debits
increase both assets and liabilities
decrease assets and increase liabilities
decrease both assets and liabilities
increase assets and decrease liabilities
59
Adjusting entries can be classified as
postponements and advances
deferrals and postponements
accruals and advances
accruals and deferrals
60
If a company fails to make an adjusting entry to record supplies used that were previously recorded as an asset, then:
expenses will be understated
net income will be understated
assets will be understated
stockholders' equity will be understated
61
A $20,000 machine is purchased with $5,000 cash and a note payable for the remainder. The journal entry includes:
debit to Cash
credit to Machinery
credit to Note Payable
credit to Notes Receivable
62
Company A signed a 4 month 6% note payable for $40,000 on Sept 1. Accrued interest at Sept 30 is:
$2,400
$450
$200
$600
63
If expenses are paid in cash, then
assets will increase
liabilities will decrease
assets will decrease
stockholders' equity will increase
64
Which of the following accounts would not usually be adjusted at year end?
land
unearned revenue
prepaid advertising
office supplies
65
A debit is not the normal balance for which account listed below?
dividends
service revenue
cash
accounts receivable
66
The normal balance in any account is the
right side
side which increases the account
side which decreases the account
left side
67
The expense recognition principle matches:
assets with accrued liabilities
incurred expenses with products
customer expenses with business expenses
revenues with expenses
68
The classification and normal balance of the Dividends account is
a liability with a credit balance
stockholders' equity with a debit balance
an expense with a debit balance
revenue with a credit balance
69
A corporation received a cash advance of $500 from a customer. As a result of this event,
assets increased by $500
equity increased by $500
liabilities decreased by $500
Both assets and equity increased by $500
70
A payment of a portion of Accounts Payable will
not affect total assets
increase liabilities and decrease assets
decrease net income and increase expenses
not affect stockholders' equity
71
Accumulated depreciation
is a contra liability account
is offset against intangible assets
should always have a credit balance
has a normal debit balance
72
Which of the following accounts will most frequently have debit balances?
assets, expenses, revenues
assets, expenses, dividends
assets, expenses, and retained earnings
assets, liabilities, dividends
73
Posting
transfers ledge transaction date to the journal
enters transaction data in the journal
normally occurs after journalizing
accumulates the journalized transactions in the individual accounts
74
The normal balance of any account is the
side which increases the account balance
right side
side which decreases the account balance
left side
75
The net difference between the account balance of a plant asset and its accumulated depreciation is called
depreciation expense
a contra asset
book value
fair market value
76
A company provided consulting services and billed the client $2,500. As a result of this event
equity increased by $2,500
assets remained unchanged
Both assets and equity increased by $2,500
assets increased by $2,500
77
Which of the following describes the classification and normal balance of the Retained Earnings account?
expense, debit
asset, debit
revenues, credit
stockholders' equity, credit
78
The purchase of an asset on credit
increases assets and stockholders' equity
decreases assets and increases liabilities
leaves total assets unchanged
increases assets and liabilities
79
If services are rendered for cash, then
assets will increase
liabilities will increase
stockholders' equity will decrease
liabilities will decrease
80
A payment of a portion of an accounts payable will
decrease net income
not affect total assets
not affect stockholders' equity
increase liabilities
81
A transaction caused a $5,000 increase in both assets and total liabilities. This transaction could have been a(n)
purchased equipment for $12,000; paid $7,000 cash, issued note payable
purchased equipment for $5,000 cash
investment of $5,000 cash in business by stockholders
paid $5,000 on bank loan
82
If a company buys a $700 machine on credit, this transaction will affect the
income statement, retained earnings statement, and balance sheet
balance sheet only
income statement and retained earnings statement only
income statement only
83
Which of the following describes the classification and normal balance of the Prepaid Insurance account?
stockholders' equity, credit
liabilities, debit
expense, debit
asset, debit
84
In its simplest form, an account consists of all of the following except
explanation column
right (credit) side
left (debit) side
account title
