,DOWNLOAD THE Test Bank for Accounting Principles 13th Edition Weygandt
CHAPTER 2
THE RECORDING PROCESS
CHAPTER LEARNING OBJECTIVES
1. Describe how accounts, debits, and credits are used to record business transactions .
An account is a record of increases and decreases in specific asset, liability, and owner’s
equity items. The terms debit and credit are synonymous with left and right. Assets, drawings,
and expenses are increased by debits and decreased by credits. Liabilities, owner’s capital,
and revenues are increased by credits and decreased by debits.
2. Indicate how a journal is used in the recording process. The basic steps in the recording
process are (a) analyze each transaction for its effects on the accounts, (b) enter the
transaction information in a journal, and (c) transfer the journal information to the appropriate
accounts in the ledger. The initial accounting record of a transaction is entered in a journal
before the data are entered in the accounts. A journal (a) discloses in one place the complete
effects of a transaction, (b) provides a chronological record of transactions, and (c) prevents
or locates errors because the debit and credit amounts for each entry can be easily
compared.
3. Explain how a ledger and posting help in the recording process. The ledger is the entire
group of accounts maintained by a company. The ledger provides the balance in each of the
accounts as well as keeps track of changes in these balances. Posting is the transfer of
journal entries to the ledger accounts. This phase of the recording process accumulates the
effects of journalized transactions in the individual accounts.
4. Prepare a trial balance. A trial balance is a list of accounts and their balances at a given
time. Its primary purpose is to prove the equality of debits and credits after posting. A trial
balance also uncovers errors in journalizing and posting and is useful in preparing financial
statements.
TRUE-FALSE STATEMENTS
1. A new account is opened for each transaction entered into by a business firm.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
2. The recording process becomes more efficient and informative if all transactions are
recorded in one account.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
3. When the volume of transactions is large, recording them in tabular form is more efficient
than using journals and ledgers.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
4. An account is often referred to as a T-account because of the way it is constructed.
Ans: T LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
5. A debit to an account indicates an increase in that account.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
6. If a revenue account is credited, the revenue account is increased.
Ans: T LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
mynursytest.store
,DOWNLOAD THE Test Bank for Accounting Principles 13th Edition Weygandt
2-2 Test Bank for Accounting Principles, Thirteenth Edition
7. The normal balance of all accounts is a debit.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
8. Debit and credit can be interpreted to mean increase and decrease, respectively.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
9. The double-entry system of accounting refers to the placement of a double line at the end
of a column of figures.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
10. A credit balance in a liability account indicates that an error in recording has occurred.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
11. The drawing account is a subdivision of the owner’s capital account and appears as an
expense on the income statement.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement, Reporting
12. Revenues are a subdivision of owner’s capital.
Ans: T LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
13. Under the double-entry system, revenues must always equal expenses.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
14. Transactions are entered in the ledger first and then they are analyzed in terms of their
effect on the accounts.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
15. Business documents can provide evidence that a transaction has occurred.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
16. Each transaction must be analyzed in terms of its effect on the accounts before it can be
recorded in a journal.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
17. Transactions are entered in the ledger accounts and then transferred to journals.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
18. All business transactions must be entered first in the general ledger.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
19. A simple journal entry requires only one debit to an account and one credit to an account.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
20. A compound journal entry requires several debits to one account and several credits to
one account.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
21. Transactions are recorded in alphabetic order in a journal.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
22. A journal is also known as a book of original entry.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
23. The complete effect of a transaction on the accounts is disclosed in the journal.
FOR INSTRUCTOR USE ONLY
mynursytest.store
, DOWNLOAD THE Test Bank for Accounting Principles 13th Edition Weygandt
The Recording Process 2-3
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: RT AICPA BB: CT AICPA FN: Reporting
24. The account titles used in journalizing transactions do not need to be identical to the
account titles in the ledger.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
25. The chart of accounts is a special ledger used in accounting systems.
Ans: F LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
26. A general ledger should be arranged in the order in which accounts are presented in the
financial statements, beginning with the balance sheet accounts.
Ans: T LO3 BT:C K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
27. The number and types of accounts used by different business enterprises are the same if
generally accepted accounting principles are being followed by the enterprises.
Ans: F LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
28. Posting is the process of proving the equality of debits and credits in the trial balance.
Ans: F LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
29. After a transaction has been posted, the reference column in the journal should be filled
in.
Ans: T LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
30. A trial balance does not prove that all transactions have been recorded or that the ledger
is correct.
Ans: T LO4 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
31. The double-entry system is a logical method for recording transactions and results in
equal amounts for debits and credits for each transaction.
Ans: T LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
32. The normal balance of an expense is a credit.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
33. The journal provides a chronological record of transactions.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
34. The ledger is merely a bookkeeping device and therefore does not provide much useful
data for management.
Ans: F LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
35. The chart of accounts is a listing of the accounts and the account numbers which identify
their location in the ledger.
Ans: T LO3 BT: C Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
36. The primary purpose of a trial balance is to prove the mathematical equality of the debits
and credits after posting.
Ans: T LO4 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
37. The trial balance will not balance when incorrect account titles are used in journalizing or
posting.
FOR INSTRUCTOR USE ONLY
mynursytest.store
CHAPTER 2
THE RECORDING PROCESS
CHAPTER LEARNING OBJECTIVES
1. Describe how accounts, debits, and credits are used to record business transactions .
An account is a record of increases and decreases in specific asset, liability, and owner’s
equity items. The terms debit and credit are synonymous with left and right. Assets, drawings,
and expenses are increased by debits and decreased by credits. Liabilities, owner’s capital,
and revenues are increased by credits and decreased by debits.
2. Indicate how a journal is used in the recording process. The basic steps in the recording
process are (a) analyze each transaction for its effects on the accounts, (b) enter the
transaction information in a journal, and (c) transfer the journal information to the appropriate
accounts in the ledger. The initial accounting record of a transaction is entered in a journal
before the data are entered in the accounts. A journal (a) discloses in one place the complete
effects of a transaction, (b) provides a chronological record of transactions, and (c) prevents
or locates errors because the debit and credit amounts for each entry can be easily
compared.
3. Explain how a ledger and posting help in the recording process. The ledger is the entire
group of accounts maintained by a company. The ledger provides the balance in each of the
accounts as well as keeps track of changes in these balances. Posting is the transfer of
journal entries to the ledger accounts. This phase of the recording process accumulates the
effects of journalized transactions in the individual accounts.
4. Prepare a trial balance. A trial balance is a list of accounts and their balances at a given
time. Its primary purpose is to prove the equality of debits and credits after posting. A trial
balance also uncovers errors in journalizing and posting and is useful in preparing financial
statements.
TRUE-FALSE STATEMENTS
1. A new account is opened for each transaction entered into by a business firm.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
2. The recording process becomes more efficient and informative if all transactions are
recorded in one account.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
3. When the volume of transactions is large, recording them in tabular form is more efficient
than using journals and ledgers.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
4. An account is often referred to as a T-account because of the way it is constructed.
Ans: T LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
5. A debit to an account indicates an increase in that account.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
6. If a revenue account is credited, the revenue account is increased.
Ans: T LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
mynursytest.store
,DOWNLOAD THE Test Bank for Accounting Principles 13th Edition Weygandt
2-2 Test Bank for Accounting Principles, Thirteenth Edition
7. The normal balance of all accounts is a debit.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
8. Debit and credit can be interpreted to mean increase and decrease, respectively.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
9. The double-entry system of accounting refers to the placement of a double line at the end
of a column of figures.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
10. A credit balance in a liability account indicates that an error in recording has occurred.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
11. The drawing account is a subdivision of the owner’s capital account and appears as an
expense on the income statement.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement, Reporting
12. Revenues are a subdivision of owner’s capital.
Ans: T LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
13. Under the double-entry system, revenues must always equal expenses.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
14. Transactions are entered in the ledger first and then they are analyzed in terms of their
effect on the accounts.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
15. Business documents can provide evidence that a transaction has occurred.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
16. Each transaction must be analyzed in terms of its effect on the accounts before it can be
recorded in a journal.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
17. Transactions are entered in the ledger accounts and then transferred to journals.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
18. All business transactions must be entered first in the general ledger.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
19. A simple journal entry requires only one debit to an account and one credit to an account.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
20. A compound journal entry requires several debits to one account and several credits to
one account.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
21. Transactions are recorded in alphabetic order in a journal.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
22. A journal is also known as a book of original entry.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
23. The complete effect of a transaction on the accounts is disclosed in the journal.
FOR INSTRUCTOR USE ONLY
mynursytest.store
, DOWNLOAD THE Test Bank for Accounting Principles 13th Edition Weygandt
The Recording Process 2-3
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: RT AICPA BB: CT AICPA FN: Reporting
24. The account titles used in journalizing transactions do not need to be identical to the
account titles in the ledger.
Ans: F LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
25. The chart of accounts is a special ledger used in accounting systems.
Ans: F LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
26. A general ledger should be arranged in the order in which accounts are presented in the
financial statements, beginning with the balance sheet accounts.
Ans: T LO3 BT:C K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
27. The number and types of accounts used by different business enterprises are the same if
generally accepted accounting principles are being followed by the enterprises.
Ans: F LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
28. Posting is the process of proving the equality of debits and credits in the trial balance.
Ans: F LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
29. After a transaction has been posted, the reference column in the journal should be filled
in.
Ans: T LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
30. A trial balance does not prove that all transactions have been recorded or that the ledger
is correct.
Ans: T LO4 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
31. The double-entry system is a logical method for recording transactions and results in
equal amounts for debits and credits for each transaction.
Ans: T LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
32. The normal balance of an expense is a credit.
Ans: F LO1 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
33. The journal provides a chronological record of transactions.
Ans: T LO2 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
34. The ledger is merely a bookkeeping device and therefore does not provide much useful
data for management.
Ans: F LO3 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
35. The chart of accounts is a listing of the accounts and the account numbers which identify
their location in the ledger.
Ans: T LO3 BT: C Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
36. The primary purpose of a trial balance is to prove the mathematical equality of the debits
and credits after posting.
Ans: T LO4 BT: K Difficulty: Easy TOT: .5 min. AACSB: None AICPA FC: Measurement
37. The trial balance will not balance when incorrect account titles are used in journalizing or
posting.
FOR INSTRUCTOR USE ONLY
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