ACC 221 Exam 1

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in all asset accounts, if the amount is placed on the right (credit) side of the account, the balance in the account is decreased

true

in an accounting system that uses debits and credits, only positive numbers will be put into the accounts

true

the sequence of steps a company's accounting system goes through each accounting period is called the accounting cycle

true

the temporary accounts should always have a zero balance on the post-closing trial balance

true

Asset accounts track the dollar amount of a physical asset and who has a claim to that physical asset

False

a company's accounting period must must always be one month long

false

a transaction which decreases the retained earnings account must always decrease an asset account to keep the accounting system in balance

false

all entries must affect both the asset side and the liabilities + equity side of the accounting equation for the accounting system to stay in balance

false

as a result of the closing process, all general ledger accounts will be reset to zero

false

entries are posted from the general journal to the trial balance

false

the balance sheet is produced from the account balances shown in the general journal

false

the collection of cash from a customer will always result in an increase in retained earnings

false

the common stock account is decreased by a debit; while the retained earnings account is increased by a debit

false

the common stock account tracks the owners' claim to assets that result from the operation of the business

false

the debit side of an asset account is the left side and the debit side of the liability account is the right side

false

the largest transaction occurring during the accounting period is always entered first in the general journal

false

the note payable account is increased by a debit entry

false

the post-closing trial balance should be prepared after the income statement is prepared but before the balance sheet is prepared

false

the retained earnings account is an asset account similar to the inventory account

false

the retained earnings account is increased by a debit and decreased by a credit

false

when a transaction increases a company's accounts recevable account the retained earnings account must be decreased to keep the accounting system in balance

false

during the closing process for expense accounts, the retained earnings account is debited, which decreases retained earnings

true

during the closing process for revenue accounts, the retained earnings account is credited, which increases retained earnings

true

for each entry in the general journal, the total dollar amount of the debits and the total dollar amounts of the credits must always be equal

true

in a traditional accounting system all entries must be first put in the general journal

true

in all asset accounts, if the amount is placed on the left (debit) side of the account, the balance in the amount is increased

true

in all liability accounts and all in equity accounts, if the amount is placed on the left (debit) side of the account, the balance in the account is decreased

true

in all liability accounts and all in equity accounts, if the amount is placed on the right side (credit) side of the account, the balance in the account is increased

true

the after close balance for both revenue and expense account should always be zero balance

true

the balance sheet is a point in time financial report

true

the balance sheet is produced from the account balances shown in the general ledger

true

the credit side of all accounts is the right side

true

the equipment account is increased by a debit entry

true

the inventory account is decreased by a credit entry

true

the main purpose of equity accounts is to keep track of owners' claims to an organization's assets

true

the main purpose of liability accounts is to keep track of non-owners' claims to an organization's assets

true

the payment of wages to employees for work they performed during the current accounting period will result in a credit to the cash account

true

the primary reason the accountant prepares a trial balance is to determine if the accounting system is in balance

true

the retained earnings account is similar to the common stock account, in that they are both owners' claim to assets accounts

true

the retained earnings account tracks the owners' claim to assets that result from the operation of the business

true

after certain types of transactions it is OK for the accounting system to have more Total Assests than Total Liabilities + Owners' Equity

False


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