Question 1

Which of the following is a nominal (temporary)  account?

Accepted Answer

A)  Unearned Revenue
B)  Salary Expense
C)  Inventory
D)  Retained EarningsE) None of the above
F) A) and D)

Question 2

Maintaining a set of accounting records is

Accepted Answer

A)  optional.
B)  required by the Internal Revenue Service.
C)  required by the Foreign Corrupt Practices Act.
D)  required by the Internal Revenue Service and the Foreign Corrupt Practices Act.E) B) and C)
F) None of the above

Question 3

The book value of any depreciable asset is the difference between its cost and its salvage value.

Accepted Answer

A) True 
 B)False  False

Question 4

With a perpetual inventory system, a company records purchases and sales directly in the Inventory account as the purchases and sales occur.

Accepted Answer

A) True 
 B)False

Question 5

The debit and credit analysis of a transaction normally takes place

Accepted Answer

A)  before an entry is recorded in a journal.
B)  when the entry is posted to the ledger.
C)  when the trial balance is prepared.
D)  at some other point in the accounting cycle.E) All of the above
F) B) and C)

Question 6

Nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed.

Accepted Answer

A) True 
 B)False

Question 7

A journal entry to record a receipt of rent revenue in advance will include a

Accepted Answer

A)  debit to rent revenue.
B)  credit to rent revenue.
C)  credit to cash.
D)  credit to unearned rent.E) None of the above
F) All of the above

Question 8

A trial balance

Accepted Answer

A)  proves that debits and credits are equal in the ledger.
B)  supplies a listing of open accounts and their balances that are used in preparing financial statements.
C)  is normally prepared three times in the accounting cycle.
D)  all of these.E) B) and D)
F) All of the above

Question 9

At December 31, 2007, Sue's Boutique had 1,000 gift certificates outstanding, which had been sold to customers during 2007 for $50 each.Sue's operates on a gross margin of 60% of its sales.What amount of revenue pertaining to the 1,000 outstanding gift certificates should be deferred at December 31, 2007?

Accepted Answer

A)  $0.
B)  $20,000.
C)  $30,000.
D)  $50,000.E) B) and C)
F) A) and C)

Question 10

Stockholders' equity is not affected by all

Accepted Answer

A)  cash receipts.
B)  dividends.
C)  revenues.
D)  expenses.E) A) and C)
F) A) and B)

Question 11

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

Accepted Answer

A)  a liability account and an asset account.
B)  an asset or contra asset account and an expense account.
C)  a liability account and an expense account.
D)  a receivable account and a revenue account.E) B) and D)
F) All of the above

Question 12

An adjusted trial balance

Accepted Answer

A)  is prepared after the financial statements are completed.
B)  proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made.
C)  is a required financial statement under generally accepted accounting principles.
D)  cannot be used to prepare financial statements.E) A) and B)
F) B) and C)

Question 13

A ledger is where the company initially records transactions and selected other events.

Accepted Answer

A) True 
 B)False

Question 14

A trial balance may prove that debits and credits are equal, but

Accepted Answer

A)  an amount could be entered in the wrong account.
B)  a transaction could have been entered twice.
C)  a transaction could have been omitted.
D)  all of these.E) C) and D)
F) B) and D) D

Question 15

Nominal accounts are also called

Accepted Answer

A)  temporary accounts.
B)  permanent accounts.
C)  real accounts.
D)  none of these.E) A) and B)
F) A) and D)

Question 16

A general journal chronologically lists transactions and other events, expressed in terms of debits and credits to accounts.

Accepted Answer

A) True 
 B)False

Question 17

The double-entry accounting system means

Accepted Answer

A)  Each transaction is recorded with two journal entries.
B)  Each item is recorded in a journal entry, then in a general ledger account.
C)  The dual effect of each transaction is recorded with a debit and a credit.
D)  More than one of the above.E) None of the above
F) C) and D)

Question 18

Factors that shape an accounting information system include the

Accepted Answer

A)  nature of the business.
B)  size of the firm.
C)  volume of data to be handled.
D)  all of these.E) None of the above
F) All of the above

Question 19

Which of the following criteria must be met before an event or item should be recorded for accounting purposes?

Accepted Answer

A)  The event or item can be measured objectively in financial terms.
B)  The event or item is relevant and reliable.
C)  The event or item is an element.
D)  All of these must be met.E) C) and D)
F) A) and D)

Question 20

Which of the following is a recordable event or item?

Accepted Answer

A)  Changes in managerial policy
B)  The value of human resources
C)  Changes in personnel
D)  None of theseE) C) and D)
F) All of the above D

Exam 3: The Accounting Information System

Which of the following is a nominal (temporary) account?

Correct Answer
verified

Maintaining a set of accounting records is

Correct Answer
verified

The book value of any depreciable asset is the difference between its cost and its salvage value.

Correct Answer
verified
False

With a perpetual inventory system, a company records purchases and sales directly in the Inventory account as the purchases and sales occur.

Correct Answer
verified

The debit and credit analysis of a transaction normally takes place

Correct Answer
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Nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed.

Correct Answer
verified

A journal entry to record a receipt of rent revenue in advance will include a

Correct Answer
verified

A trial balance

Correct Answer
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Correct Answer
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Stockholders' equity is not affected by all

Correct Answer
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If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

Correct Answer
verified

An adjusted trial balance

Correct Answer
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A ledger is where the company initially records transactions and selected other events.

Correct Answer
verified

A trial balance may prove that debits and credits are equal, but

Correct Answer
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D

Nominal accounts are also called

Correct Answer
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A general journal chronologically lists transactions and other events, expressed in terms of debits and credits to accounts.

Correct Answer
verified

The double-entry accounting system means

Correct Answer
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Factors that shape an accounting information system include the

Correct Answer
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Which of the following criteria must be met before an event or item should be recorded for accounting purposes?

Correct Answer
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Which of the following is a recordable event or item?

Correct Answer
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D

Exam 3: The Accounting Information System

Which of the following is a nominal (temporary) account?

Correct AnswerverifiedShow Answer

Maintaining a set of accounting records is

Correct AnswerverifiedShow Answer

The book value of any depreciable asset is the difference between its cost and its salvage value.

Correct AnswerverifiedFalse

With a perpetual inventory system, a company records purchases and sales directly in the Inventory account as the purchases and sales occur.

Correct AnswerverifiedShow Answer

The debit and credit analysis of a transaction normally takes place

Correct AnswerverifiedShow Answer

Nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed.

Correct AnswerverifiedShow Answer

A journal entry to record a receipt of rent revenue in advance will include a

Correct AnswerverifiedShow Answer

A trial balance

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Stockholders' equity is not affected by all

Correct AnswerverifiedShow Answer

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

Correct AnswerverifiedShow Answer

An adjusted trial balance

Correct AnswerverifiedShow Answer

A ledger is where the company initially records transactions and selected other events.

Correct AnswerverifiedShow Answer

A trial balance may prove that debits and credits are equal, but

Correct AnswerverifiedD

Nominal accounts are also called

Correct AnswerverifiedShow Answer

A general journal chronologically lists transactions and other events, expressed in terms of debits and credits to accounts.

Correct AnswerverifiedShow Answer

The double-entry accounting system means

Correct AnswerverifiedShow Answer

Factors that shape an accounting information system include the

Correct AnswerverifiedShow Answer

Which of the following criteria must be met before an event or item should be recorded for accounting purposes?

Correct AnswerverifiedShow Answer

Which of the following is a recordable event or item?

Correct AnswerverifiedD

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False

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D

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D