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ACCT-2301-QUIZ1

Accountants refer to an economic event as a
Transaction
The process of recording transactions has become more efficient because
Computers are used in processing business events
Communication of economic events is the part of the accounting process that involves
Preparing account reports
The use of computers in recording business events
Has made the recording process more efficient
The accounting process is correctly sequenced as
Identification, recording, communication
Accounting consists of three basic activities which are related to economic events of an organization. These include
Identifying, recording, and communicating
All of the following statements are correct except
Good decision-making depends on good information
INCORRECT
Which of the following is an external user of accounting information?
Labor unions
Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?
Recording
The origins of accounting are generally attributed to the work of
Luca Pacioli
Financial accounting provides economic and financial information for all of the following except
Managers
Ethics are the standards of conduct by which one’s actions are judged as
All of these
Generally accepted accounting principles are
Standards that indicate how to report economic events
The cost principle requires that when assets are acquired, they be recorded at
Cost
The private sector organization involved in developing accounting principles is the
Financial Accounting Standards Board
GAAP stands for
Generally Accepted Accounting Principles
Financial information that is capable of making a difference in a decision is
Relevant
The proprietorship form of business organization
Represents the largest number of businesses in the US
The economic entity assumption requires that the activities
Of an entity be kept separate from the activities of its owner
The basic accounting equation may be expressed as
All of these
Liabilities
Are existing debts and obligations
A dividend is
A distribution of the company’s earnings to its stockholders.
Revenues would not result from
Issuance of common stock
Stockholders’ equity is decreased by all of the following except
Sales of stock
A net loss will result during a time period when
Expenses exceed revenues
If total liabilities increased by $15,000 and stockholders’ equity increased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?
a $25,000 decrease
INCORRECT
If total assets equal $345,000 and total stockholders’ equity equal $120,000, then total liabilities must equal
$225,000
Stockholders’ equity is increased by
Revenues
Stockholder’s equity is decreased by
Expenses
The right side of an account
Is the credit side
Credits
Decrease assets and increase liabilities
A debit to an asset account indicates
An increase in the asset
The normal balance of any account is the
Side which increases that account
The double-entry system requires that each transaction must be recorded
In at least 2 different accounts
A credit is not the normal balance for which account listed below?
Dividends Account/Drawings Account
An accountant has debited an asset account for $1,200 and credited a liability account for $500. What can be done to complete the recording of the transaction?
Credit a different asset account for $700-
An account will have a credit balance if the
Credits exceed the debits
Which account below is not a subdivision of retained earnings?
Common stock-
A credit to a liability account
Indicates an increase in the amount owed to creditors
TransAm Mail Service purchased equipment for $2,500. TransAm paid $400 in cash and signed a note for the balance. TransAm debited the Equipment account, credited Cash and
Credited a liability for $2,100-
On January 14, Edamame Industries purchased supplies of $700 on account. The entry to record the purchase will include
A Debit to supplies and a credit to Accounts Payable-
At January 1, 2014, Alligator Industries reported retained earnings of $130,000. During 2014, Alligator had a net loss of $30,000 and paid dividends of $15,000. At December 31, 2014, the amount of retained earnings is
$85,000
On July 7, 2014, Hidden Camera Enterprises performed cash services of $1,700. The entry to record this transaction would include
A debit of Cash of $1,700-
The usual sequence of steps in the transaction recording process is:
Analyze->Journal->Ledger
Another name for journal is
Book of original entry
The revenue recognition principle dictates that revenue should be recognized in the accounting period
In which the performance obligation is satisfied
In a service-type business, revenue is recognized
When the service is performed
Adjusting entries are required
Because some costs expire with the passage of time and have not yet been journalized
Accrued revenues are
Earned but not yet received or recorded
Accrued expenses are
Incurred but not yet paid or recorded

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