Accounting final-true/false
T/F: if there are errors in the work sheet's Trial Balance column, it might be because not all general ledger account balances were extended into the Trial Balance column correctly
TRUE
T/F: most errors occur when doing arithmetic
TRUE
T/F: not only do banks charge a fee for handling a dishonored check, but they also deduct the amount of the check from the account as well
TRUE
T/F: the amount of a check is written twice on each check
TRUE
T/F: the best way to prevent errors is to work carefully; when possible, use a calculator.
TRUE
T/F: the source document for a debit card purchase is a memorandum
TRUE
T/F: the source document for an electronic transfer is a memorandum
TRUE
T/F: the two accounts affected by the adjustment for supplies for Supplies and Supplies Expense
TRUE
T/F: totaling and ruling the Adjustments columns of a work sheet are necessary to prove the equality of debits and credit
TRUE
T/F: two financial statements are prepared form the information on the work sheet
TRUE
T/F: when a deposit is made in a bank account, the bank issues a receipt
TRUE
T/F: when two column totals are not in balance on a work sheet, the difference between the two totals is calculated and checked
TRUE
T/F: when writing a check, the first step is to prepare the check stub
TRUE
T/F: the journal entry for a payment on account using electric funds is exactly the same as when the payment is made by check
FALSE
T/F: the two accounts affected by the adjustment for insurance are Prepaid Insurance Expense and Insurance
FALSE
T/F: there are four types of endorsements commonly used; bank, special, original and restrictive
FALSE
T/F: when the petty cash fund is replenished, the balance of the petty cash account increases
FALSE
T/F: When a business has two different sources of revenue, both revenue accounts are listed on the income statement
TRUE
T/F: When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515
TRUE
T/F: When cash is paid for supplies, the Cash account is credited
TRUE
T/F: When cash is received from sales, both the Cash account and the Sales account are increased.
TRUE
T/F: When cash is received on account, one asset account increases and another asset account decreases.
TRUE
T/F: When making a correcting entry, the same four steps are followed as when making any journal entry
TRUE
T/F: When services are sold on account, an asset account and a revenue account are affected.
TRUE
T/F: Whenever the credits in an account exceeded the debits, the balance is a credit
TRUE
T/F: a check that contains errors must be marked with the word "VOID" and another check must be written
TRUE
T/F: a check with a blank endorsement can be cashed by anyone who has possession of the check
TRUE
T/F: accounting is the language of business
TRUE
T/F: all general ledger account titles are listed in a trial balance in the same order as listed in the chart of accounts
TRUE
T/F: an accounting period is also known as a fiscal period
TRUE
T/F: an important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement
TRUE
T/F: an outstanding check is one that has been issued by not yet reported on a bank statement by the bank
TRUE
T/F: anytime a payment is made from the petty cash fund, a petty cash slip is prepared showing proof of a petty cash payment
TRUE
T/F: banks deduct service charges from customers' checking accounts without requiring customers to write a check for the account
TRUE
T/F: because an account form has columns for the debit and credit balance of an account, it is often referred to as the balance-ruled account form.
TRUE
T/F: businesses use petty cash when writing a check is not time or cost effective
TRUE
T/F: errors in general ledger accounts should never be erased
TRUE
T/F: he income statement's account balances are obtained from the work sheet's Income Statement columns
TRUE
T/F: if error are found on a work sheet, they must be erased and corrected before any further work is completed
TRUE
T/F: if the cash balance in the checkbook equals the cash balance in the cash account, cash is proved.
TRUE
T/F: The source document used when supplies bought on account are paid for is a check
TRUE
T/F: the accounting concept Consistent Reporting is being applied when a deliveries made one year and the about of revenue received for deliveries made the next year
FALSE
T/F: the four questions asked when analyzing an adjustment are: why? where? when? and how?
FALSE
T/F: An income statement reports information on a specific date, indicating the financial condition of a business
FALSE
T/F: Dollars and cents sighs and decimal points should be used when writing amounts on ruled accounting pages.
FALSE
T/F: Examples of source documents include checks, sales invoices, memorandums, and letters.
FALSE
T/F: Financial ratios on an income statement are calculated by dividing sales and total expenses by net income
FALSE
T/F: If there is only one blank line remaining in a jornal page, it is standard practice to split the entry and record the second line of entry on the next page.
FALSE
T/F: Internal users of accounting information include company managers, officers, and creditors
FALSE
T/F: Journal errors discovered before the entries are posted are corrected by first preparing a memorandum describing the correction to be made
FALSE
T/F: No company should have a vertical analysis ratio for total expenses higher than 48.0%
FALSE
T/F: TechKnow Consulting arranges expense accounts in chronological order in its general ledger
FALSE
T/F: TechKnow Consulting maintains a petty cash fund for making large cash payments without writing checks
FALSE
T/F: The Full Disclosure accounting concept is applied when a company always prepares financial statements at the end of each monthly fiscal period
FALSE
T/F: The Owner's Equity section of a balance sheet is the same for all businesses
FALSE
T/F: The cash account is the first account and is numbered 100
FALSE
T/F: The income statement for a service business has five sections: heading, Revenue, Expenses, Net Income or Net Loss, and Capital
FALSE
T/F: The net income on an income statement is verified by checking the balance sheet
FALSE
T/F: The only reason for the Post. Ref. columns of the journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted
FALSE
T/F: The owner's capital amount reported on a balance sheet is calculated as: capital account balance plus drawing account balance less net income
FALSE
T/F: The second division of TechKnow Consulting's chart of accounts is the owner's Equity division
FALSE
T/F: To correct an error in a journal, simply erase the incorrect item and write the correct item in the same place.
FALSE
T/F: When cash is used to pay for insurance, the asset account Prepaid Insurance Decreases.
FALSE
T/F: a memorandum is the source document for the entry to record establishing a petty cash fund
FALSE
T/F: because cash transactions occur more frequently than other transactions, the changes for making recording errors affecting cash are less
FALSE
T/F: he two steps for opening an account are writing the account title and recording the balance
FALSE
T/F: if the difference between the totals of Debit and Credit columns on a work sheet can be evenly divided by 9, then the error is most likely in addition
FALSE
T/F: journals, ledgers, and work sheets are considered permanent records
FALSE
T/F: most banks do not look at the date the check is written and will withdraw money from the depositor's account anytime
FALSE
T/F: net income on a work sheet is calculated by subtracting the Income Statement Credit column total from the Income Statement Debit column total
FALSE
T/F: A balance sheet reports financial information on a specific date and includes the assets, liabilities, and owner's equity
TRUE
T/F: A balance sheet reports information about the elements of the accounting equation
TRUE
T/F: A blank in the Post. Ref. column of the journal indicates that posting for that line still needs to be completed
TRUE
T/F: A calculator tape is the source document for daily sales.
TRUE
T/F: A check is the source document used when items are paid in cash
TRUE
T/F: A financial ratio is a comparison between two components of financial information
TRUE
T/F: A receipt is the source document for cash received from transactions other than sales.
TRUE
T/F: An amount written in parentheses on a financial statement indicates a negative amount
TRUE
T/F: Cash can be proved at any time
TRUE
T/F: Checks and sales invoices are prenumbered in sequence to help account for them.
TRUE
T/F: Double lines are ruled across the balance sheet columns to show that the column totals have been verified as correct
TRUE
T/F: Double lines ruled across both amount columns of an income statement indicate that the amount has been verified
TRUE
T/F: Each amount in the Debit and Credit columns of a general journal is posted to the account written in the Account Title column
TRUE
T/F: Information in a journal includes the debit and credit parts of each transaction recorded in one place.
TRUE
T/F: Information needed to prepare an income statement comes from the Account Title column and the Income Statement columns of a work sheet
TRUE
T/F: Posting sorts journal entries so that all debits and credits affecting each account are brought together in one place
TRUE
T/F: Recording the posting reference is always the last step in the posting procedure
TRUE
T/F: The Matching Expenses with Revenue accounting concept is applied when the revenue earned and the expenses incurred to earn that revenue are reported in the same fiscal period
TRUE
T/F: The Objective Evidence accounting concept requires that there be proof that a transaction did occur.
TRUE
T/F: The accounts affected when cash is receive from the owner as an investment are Cash and capitol account.
TRUE
T/F: The accounts affected when paying cash for rent are Rent Expense and Cash
TRUE
T/F: The accounts affected when paying cash to the owner for personal use are the drawing and Cash
TRUE
T/F: The asset division accounts for TechKnow consulting are numbered in the 100s
TRUE
T/F: The first digit of account numbers for accounts in the owner's equity ledger division is 3
TRUE
T/F: The first step to post an amount from the Credit column is to write the date in the date column of the account
TRUE
T/F: The last two digits in a 3-digit account number indicate the general ledger division of the account
TRUE
T/F: The position of the total asset line on the balance sheet is determined after the Equities section is prepared
TRUE
T/F: The source document Sales Invoice No. 1 is abbreviated as S1 in a journal entry.
TRUE
T/F: The source document used when supplies are ordered by telephone on account is a memorandum.
TRUE