Accounts Exam 1

The study of accounting is not useful for a business career unless your career objective is to become an accountant

False

Debits

Increases assets and decreases liabilities

A Ledger

Is a collection of the entire group of accounts maintained by a company

A Trail Balance

Is a list of accounts with their balances at a given time.

A revenue account

Is increased by credits

Which of the following is not part of the recording process

Preparing a income statement

SOX

Sarbanes-Oxley Act

Posting

Transferring journal entries to the ledger accounts

A partnership must be more then 1 owner

True

The economic entity assumption requires that an activity of an entity be kept separate and distinct from the activities of its owners and all other economic entity

True

The monetary unit assumption states that transaction that can be measured in term of money should be recorded on the accounting records

True

The perches of office equipment on credit increases total assets and total liabilities

True

Transaction that can be measured in dollars and cents are recorded in the financial information system

True

The hiring of a new company president is an economic event recorded by the financial information system

False

Accountants do not have to worry about issues of ethics

False

Bookkeeping and accounting are one and the same because the bookkeeping function includes the accounting process

False

Owners of business firms are the only people who need accounting information

False

Owners' claims to total business assets take precedence over the claim of creditors because owners invest assets in the business and are liable for losses

False

The basic accounting equation states that Assets = Liabilities

False

The cost and fair value of an asset we the same at the time of acquisition and in all subsequent periods

False

The primary accounting standards-setting body in the United States in the International Accounting Standard Board

False

The purchase of supplies on account should result in

A debit to Supplies and a credit to Account Payable

Trail Balance

A listing of the accounts in the general ledger

Which of the following statements about an account is true

An account is an individual accounting record of increases and decreases in specific asset, liability, and owner's equity items.

Accounts that normally have debit balance are

Assets, dividends, and expenses