CHAPTER 2: ANALYZING TRANSACTIONS
1. Accounts are records of increases and decreases in individual financial statement items.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose
ACCT.ACBSP.APC.02 - GAAP
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
2. A chart of accounts is a listing of accounts that make up the journal.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose
ACCT.ACBSP.APC.02 - GAAP
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
3. The chart of accounts should be the same for each business.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.03 - Business Forms
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 2: Analyzing Transactions
4. Accounts payable are accounts that you expect will be paid to you.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.04 - Cash vs. Accrual
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
5. Consuming goods and services in the process of generating revenues results in expenses.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
6. Prepaid expenses are an example of an expense.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.04 - Cash vs. Accrual
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 2: Analyzing Transactions
7. The Unearned Revenues account is an example of a liability.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.04 - Cash vs. Accrual
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
8. The Drawings account is an example of an expense.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
9. Accounts in the ledger are usually maintained in alphabetical order.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Chapter 2: Analyzing Transactions
10. Depending on the account title, the right side of the account is referred to as the credit side.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
11. To determine the balance in an account, always subtract credits from debits.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
12. An account in its simplest form has three parts to it: a title, an increase side, and a decrease side.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1. Accounts are records of increases and decreases in individual financial statement items.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose
ACCT.ACBSP.APC.02 - GAAP
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
2. A chart of accounts is a listing of accounts that make up the journal.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose
ACCT.ACBSP.APC.02 - GAAP
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
3. The chart of accounts should be the same for each business.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.03 - Business Forms
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 2: Analyzing Transactions
4. Accounts payable are accounts that you expect will be paid to you.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.04 - Cash vs. Accrual
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
5. Consuming goods and services in the process of generating revenues results in expenses.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
6. Prepaid expenses are an example of an expense.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.04 - Cash vs. Accrual
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 2: Analyzing Transactions
7. The Unearned Revenues account is an example of a liability.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.04 - Cash vs. Accrual
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
8. The Drawings account is an example of an expense.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
9. Accounts in the ledger are usually maintained in alphabetical order.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Chapter 2: Analyzing Transactions
10. Depending on the account title, the right side of the account is referred to as the credit side.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
11. To determine the balance in an account, always subtract credits from debits.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
12. An account in its simplest form has three parts to it: a title, an increase side, and a decrease side.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
