Test Bank
Fullfileatfor
, , Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson
http://testbankscafe.eu/Test-Bank-for-Intermediate-Accounting-7th-Edition-Spiceland,-Sepe,-Nelson
,,,,,
, th
Testbank for intermediate accounting 7 edition by spiceland,
sebe and nelson
.
Chapter 01 Review of the Accounting process
,,,,,
True / False Questions
1. Owners'equitycanbeexpressed as assetsminus ,,,, , liabilities.
True False
2. Debits increase asset accounts and decrease
, liability accounts.
True False
3. Balance sheet accounts , are referred to as temporary accounts because
their balances are always changing. ,,,,,
True False
4. After an unadjusted trial balance is prepared, the next step in the acc ,
ountingprocessing cycle is the preparation of financial statements.
,
True False
5. Adjusting journal entries are required to comply with the realization and m
, ,
atching principles.
,,,,
True False
6. Accruals occur when the cash flow precedes either revenue
, or expense recog nition.
True False
7. The adjusted trial balance contains only permanent accounts.
True False
8. The income statement summarizes the operating activity of a firm at a ,
particularpoint in time. , ,
True False
,9. The balance sheet can be considered a change or flow statement.
True False
10. The statement ,of cash flows summarizes , transactions that , caused
cash to changeduring a reporting period.
True False
11. The statement of shareholders'
, equity discloses , the changes in
the temporaryshareholders' equity accounts.
True False
12. The post-closing trial balance contains only permanent , accounts.
True False
13. The closing process brings
, all temporary accounts to a zero
, balance a
nd updates thebalance in the retained earnings account. ,
True False
14. A reversing entry at the beginning of a period for salaries would include a debit
, ,
to salaries expense.
,,,,,,,,
True False
15. The sale of merchandise on account would be recorded in a sales journal.
True False
16. The payment of cash to a supplier would be recorded in a purchases journal.
True False
Multiple Choice Questions
, 17. The accounting equation , can be stated as:
A. A +L -
OE =0.
B. A -
L +OE =0.
C. -A + L - ,
O E =0. ,
D. A - L - ,,,
OE =0.
18. Examples of external transactions include all of the following except:
,
A. Paying employee ,
s salarie s.
,,,,,,,,
B. Purchasing ,
equipment
.
C. Depreciating ,,,,
equipment.
D. Collecting
areceivable
.
19. Examples of internal transactions include all of the following except:
, ,
A. Writing off an uncol
lectibleaccount.
B. Recording the expiration of prep
aidinsurance.
C. Recording unpai
d w a ge s. ,,,,,,,,
D. Paying wages to co
mpanyemployees.
20. XYZ Corporation receives $100,000 from investors for issuing them share
s of its stock.XYZ's journal entry to record this transaction would include a:
, ,
A. Debit to inv
estments.
B. Credit to retained ,
earnings.
C. Credit to capital ,
stock.
D. Credit to ,,,,,
revenue.
Fullfileatfor
, , Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson
http://testbankscafe.eu/Test-Bank-for-Intermediate-Accounting-7th-Edition-Spiceland,-Sepe,-Nelson
,,,,,
, th
Testbank for intermediate accounting 7 edition by spiceland,
sebe and nelson
.
Chapter 01 Review of the Accounting process
,,,,,
True / False Questions
1. Owners'equitycanbeexpressed as assetsminus ,,,, , liabilities.
True False
2. Debits increase asset accounts and decrease
, liability accounts.
True False
3. Balance sheet accounts , are referred to as temporary accounts because
their balances are always changing. ,,,,,
True False
4. After an unadjusted trial balance is prepared, the next step in the acc ,
ountingprocessing cycle is the preparation of financial statements.
,
True False
5. Adjusting journal entries are required to comply with the realization and m
, ,
atching principles.
,,,,
True False
6. Accruals occur when the cash flow precedes either revenue
, or expense recog nition.
True False
7. The adjusted trial balance contains only permanent accounts.
True False
8. The income statement summarizes the operating activity of a firm at a ,
particularpoint in time. , ,
True False
,9. The balance sheet can be considered a change or flow statement.
True False
10. The statement ,of cash flows summarizes , transactions that , caused
cash to changeduring a reporting period.
True False
11. The statement of shareholders'
, equity discloses , the changes in
the temporaryshareholders' equity accounts.
True False
12. The post-closing trial balance contains only permanent , accounts.
True False
13. The closing process brings
, all temporary accounts to a zero
, balance a
nd updates thebalance in the retained earnings account. ,
True False
14. A reversing entry at the beginning of a period for salaries would include a debit
, ,
to salaries expense.
,,,,,,,,
True False
15. The sale of merchandise on account would be recorded in a sales journal.
True False
16. The payment of cash to a supplier would be recorded in a purchases journal.
True False
Multiple Choice Questions
, 17. The accounting equation , can be stated as:
A. A +L -
OE =0.
B. A -
L +OE =0.
C. -A + L - ,
O E =0. ,
D. A - L - ,,,
OE =0.
18. Examples of external transactions include all of the following except:
,
A. Paying employee ,
s salarie s.
,,,,,,,,
B. Purchasing ,
equipment
.
C. Depreciating ,,,,
equipment.
D. Collecting
areceivable
.
19. Examples of internal transactions include all of the following except:
, ,
A. Writing off an uncol
lectibleaccount.
B. Recording the expiration of prep
aidinsurance.
C. Recording unpai
d w a ge s. ,,,,,,,,
D. Paying wages to co
mpanyemployees.
20. XYZ Corporation receives $100,000 from investors for issuing them share
s of its stock.XYZ's journal entry to record this transaction would include a:
, ,
A. Debit to inv
estments.
B. Credit to retained ,
earnings.
C. Credit to capital ,
stock.
D. Credit to ,,,,,
revenue.
