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Multiple Choice Identify the choice that best completes the statement or answers the question. 

1. Where does a debt account decrease?a. On the debit side

 b. On the credit sidec. Neither a. nor b.d. Both a. and b.

ANSWER: AEasy

POINTS: 0 / 1REF:  page 139 

2. In general, the asset side of the balance sheet is designed to summarize balance sheetaccounts with:a. Credit balances.

 b. Debit balances.c. Neither a. nor bd. Both a. and b

ANSWER: BEasy

POINTS: 0 / 1REF:  page 139 

3. Alf sells merchandise on credit to Bob for 100 CU. How will the transaction be recordedin Alf’s accounting records?a.   Sales of merchandise

  | Credit : 100

  Customer Bob

  Debit : 100 |

 b.   Sales of merchandise  | Credit : 100

Customer Bob

  | Credit : 100

c.   Sales of merchandise  Debit : 100 |

Customer Bob

  Debit : 100 |

d.   Sales of merchandise  Debit : 100 |

Customer Bob

  | Credit : 100

ANSWER: AModerate

POINTS: 0 / 1REF:  pages 139, 140

 

Name: Score: 0 / 10 points (0%)

Chapter 4 - The accounting process

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 4. Which mechanism is entirely based on the fundamental idea that each individual

accounting transaction has two sides, which are always balanced?a. Accrual accounting

 b. Double entry bookkeepingc. Prudence principled. Cash accounting

ANSWER: BEasy

POINTS: 0 / 1REF:  page 141 

5. Which of the following statements is false?a. If you increase an asset account, you could increase a liability account.

 b. If you decrease an asset account, you could increase a shareholders’ equityaccount.

c. If you increase an asset account, you could decrease an asset account.d. If you decrease an asset account, you could decrease a shareholders’ equity

account.

ANSWER: BModerate

POINTS: 0 / 1REF:  page 141 

6. Each accounting transaction originates in a:a. Document.

 b. Ledger.

c. Journal.d. Trial balance.

ANSWER: AEasy

POINTS: 0 / 1REF:  page 142 

7. In which order does the journal list transactions?a. Alphabetical

 b. Decreasing

c. Increasingd. Chronological

ANSWER: DEasy

POINTS: 0 / 1REF:  page 142 

8. Which of the following accounts is expected to present a debit balance?a. Bank overdrafts

 b. Financial income

c. Financial interestd. Bank borrowing

ANSWER: CModerate

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POINTS: 0 / 1REF:  page 148 

9. What is the final stage of the accounting process?a. Journal

 b. Financial statementc. Ledger d. Trial balance

ANSWER: BEasy

POINTS: 0 / 1REF:  page 149 

10. A chart of accounts is a logically organized list of all recognized accounts used inrecording all transactions in a firm.a. True

 b. False

ANSWER: AEasy

POINTS: 0 / 1REF:  page 150 

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