T es t Bank for Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson
, ,
, Testbank for intermediate accounting 7 th edition by spiceland,
sebe and nelson
.
Chapter 01 Review of the Accounting process
,,,,,
True / False Questions
1. Owners'equitycanbeexpressedas assetsminus ,,,, , liabilities.
True False
2. Debits increase asset account and decrease
, liability accounts.
s
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 ,f equation can be
fff ff stated as:
ff
A. A +L -
f f f
OE =0. ff
B. A -
f f
L +OE =0. f ff f
C. -A + L -
f f f ,f
OE =0. f,f
D. A - L -
f f,,,f f f
OE =0. ff
18. Examples of external transactions include all of the following except:
f ,f f ff ff f f f f ff
A. Paying employee
f f,f f
s salaries. f,,,,
B. Purchasing
f ,f
equipment f
.
C. Depreciating
f ,,,,f
equipment.
D. Collecting
f f
areceivable f
.
19. Examples of internal transactions
f ,f f f f,f include all of the following except:
f f f f ff
A. Writing
f off an uncol f
lectibleaccount.
B. Recording the expiration of prep
f ff f ff f f
aidinsurance.
C. Recording unpai
f ff f
d w age s. f,,,,, f f
D. Paying f wages to co f
mpanyemployees.
20. XYZ Corporation
f receives $100,000 from investors for issuing them share f
s of its stock.XYZ's journal entry to record this transaction would ,f ff f f f f f ff ,f include a:
f
A. Debit to inv
f f f f
estments.
B. Credit to retained
f f f,f f
earnings.
C. Credit to capital
f ,f f f
stock.
D. Credit to
f ,,,,, f
revenue.
, ,
, Testbank for intermediate accounting 7 th edition by spiceland,
sebe and nelson
.
Chapter 01 Review of the Accounting process
,,,,,
True / False Questions
1. Owners'equitycanbeexpressedas assetsminus ,,,, , liabilities.
True False
2. Debits increase asset account and decrease
, liability accounts.
s
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 ,f equation can be
fff ff stated as:
ff
A. A +L -
f f f
OE =0. ff
B. A -
f f
L +OE =0. f ff f
C. -A + L -
f f f ,f
OE =0. f,f
D. A - L -
f f,,,f f f
OE =0. ff
18. Examples of external transactions include all of the following except:
f ,f f ff ff f f f f ff
A. Paying employee
f f,f f
s salaries. f,,,,
B. Purchasing
f ,f
equipment f
.
C. Depreciating
f ,,,,f
equipment.
D. Collecting
f f
areceivable f
.
19. Examples of internal transactions
f ,f f f f,f include all of the following except:
f f f f ff
A. Writing
f off an uncol f
lectibleaccount.
B. Recording the expiration of prep
f ff f ff f f
aidinsurance.
C. Recording unpai
f ff f
d w age s. f,,,,, f f
D. Paying f wages to co f
mpanyemployees.
20. XYZ Corporation
f receives $100,000 from investors for issuing them share f
s of its stock.XYZ's journal entry to record this transaction would ,f ff f f f f f ff ,f include a:
f
A. Debit to inv
f f f f
estments.
B. Credit to retained
f f f,f f
earnings.
C. Credit to capital
f ,f f f
stock.
D. Credit to
f ,,,,, f
revenue.
