ACC250 Ch 3 Review

The normal balance of any account is the A. left side B. right side C. side which increases that account D. side which decreases that account.

C. side which increases that account

The principle purpose of posting is to A. help identify errors made in the journal B. accumulate the effects of journalized transactions in the individual accounts. C. enter transactions directly into the ledger D. help determine if the financial statements are ready to be prepared.

B. accumulate the effects of journalized transaction in the individual accounts

The usual sequence of steps in the transaction recording process is A. journalize, analyze, post to the ledger B. analyze, journalize, post to the ledger C. journalize, post to the ledger, analyze D. post to the ledger, journalize, analyze

B. analyze, journalize, post to the ledger

If the beginning Cash account balance of Rainbow, Inc. was $36,800, the ending balance was $20,400, and total cash received during the period was $88,000, what amount of cash was paid out during the period? A. $ 3,600 B. $ 84,800 C. $104,400 D. $ 71,600

C. $104,400

Management could determine the amounts due from customers by examining which ledger account? A. Service Revenue B. Accounts Payable C. Accounts Receivable D. Supplies

C. Accounts Receivable

The double entry system of debits and credit means that: A. Two pieces of information must be recorded for each transaction--the date and the dollar amount. B. Debits will be recorded twice as often as credits. C. At least two entries, a debit and a credit, must be made for each transaction. D. Each debit and credit will be recorded two times, once in the general ledger and once in the trial balance.

C. At least two entries, a debit and a credit, must be made for each transaction

A trial balance is a listing of A. transaction in a journal B. the chart of accounts C. general ledger accounts and balances D. the totals from the journal pages

C. general ledger accounts and balances

The purpose of the ledger is to A. record chronologically the day's transactions B. keep a record of documentation to support each transaction C. keep in one place all information about changed in specific account balances D. make sure that all assets, liabilities, etc., have normal balances at all times.

C. keep in one place all information about changed in specific account balances

The sale of an asset on credit for what it cost A. increases assets and liabilities B. decreases assets and liabilities C. leaves total asset unchanged D. decreases assets and increases liabilities

C. leaves total assets unchanged

In recording an accounting transaction in a double-entry system A. the number of debit accounts must equal the number or credit accounts B. there must always be entries made on both sides of the accounting equation C. the amount of the debits must equal the amounts of the credits D. there must only be two accounts affected by any transaction

C. the amount of the debits must equal the amount of the credits

Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not? A. yes, they are treated as revenue at the time of receipt because the company has access to the cash. B. No, the amount of revenue cannot be adequately determined until the company completes the work. C. Yes, The intent of the company is to perform the work and the customer is confident that the services will be completed. D. No, revenue cannot be recognized until the work is performed.

D. No, revenue cannot be recognized until the work is performed

If expenses are paid in cash, then A. assets will increase and stockholders' equity will increase B. liabilities will decrease and stockholders' equity will increase C. liabilities will increase and stockholders' equity will increase D. assets will decrease and stockholders' equity will decrease

D. assets will decrease and stockholders' equity will decrease.

Comstock Company provided consulting services and billed the client $2,500. As a result of this event A. assets remained unchanged B. assets increased by $2,500 C. equity increased by $2,500 D. Both assets and stockholders' equity increased by $2,500

D. both assets and stockholders' equity increased by $2,500

Transactions in a journal are initially recorded in A. account number order B. dollar amount order C. alphabetical order D. chronological order

D. chronological order