DOWNLOAD THE Test Bank for Fundamental Accounting Principles 24th Editi
h h h h h h h h h
on Wild h
FundamentalhAccountinghPrinciples,h24eh(Wild)hCha
pterh2 AnalyzinghandhRecordinghTransactions
1) Businesshtransactionshandheventsharehthehstartinghpointshofhfinancialhstatements.
2) Preparationhofhahtrialhbalancehishthehfirsthstephinhprocessinghahfinancialhtransaction.
3) Sourcehdocumentshidentifyhandhdescribehtransactionshandheventshenteringhthehaccountingh
process.
4) Itemshsuchhashsaleshreceipts,hbankhstatements,hchecks,handhpurchasehordersharehexampleshofhahb
usiness'shsourcehdocuments.
5) Anhaccounthishahrecordhofhincreaseshandhdecreaseshinhahspecifichasset,hliability,hequity,hrevenue,ho
rhexpensehitem.
6) Ahcustomer'shpromisehtohpayhonhcredithishclassifiedhashanhaccounthpayablehbyhthehseller.
7) Withdrawalshbyhthehownerharehahbusinesshexpense.
8) Thehpurchasehofhlandhandhbuildingshwillhgenerallyhbehrecordedhinhthehsamehledgerhaccount.
9) Unearnedhrevenuesharehclassifiedhashliabilities.
10) Cashhwithdrawnhbyhthehownerhforhpersonalhexpenseshshouldhbehtreatedhashanhexpensehofhthehb
usiness.
11) Whenhahcompanyhprovideshserviceshforhwhichhcashhwillhnothbehreceivedhuntilhsomehfuturehd
ate,hthehcompanyhshouldhrecordhthehamounthbilledhashaccountshreceivable.
12) Ownerhwithdrawalshalwayshdecreasehequity.
13) Expenseshalwayshdecreasehequity.
14) Revenueshalwayshincreasehequity.
15) Ownerhinvestmentshalwayshdecreasehequity.
16) Unearnedhrevenuehishahliabilityhthathishsettledhinhthehfuturehwhenhahcompanyhdelivershitshp
roductshorhservices.
17) Ahcompany'shcharthofhaccountshishahlisthofhallhthehaccountshusedhandhincludeshanhidentificationhn
umberhassignedhtoheachhaccount.
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18) Anhaccount'shbalancehishthehdifferencehbetweenhthehtotalhdebitshandhtotalhcreditshforhtheha
ccount,hincludinghanyhbeginninghbalance.
19) Thehrighthsidehofhanhaccounthishcalledhthehdebithside.
20) Inhahdouble-
entryhaccountinghsystem,htotalhdebitshmusthequalhtotalhcreditshforhallhentries,handhtotalhdebithaccou
nthbalanceshinhthehledgerhmusthequalhtotalhcredithaccounthbalances.
21) Increaseshinhliabilityhaccountsharehrecordedhashdebits.
22) Debitshincreasehassethandhexpensehaccounts.
23) Creditshalwayshincreasehaccounthbalances.
24) Anhexpensehaccounthnormallyhhashahcredithbalance.
25) Ahrevenuehaccounthnormallyhhashahdebithbalance.
26) Assethaccountsharehdecreasedhbyhdebits.
27) Debithmeanshincreasehandhcredithmeanshdecreasehforhallhaccounts.
28) Assethaccountshnormallyhhavehdebithbalanceshandhrevenuehaccountshnormallyhhavehcredith
balances.
29) Anhowner'shwithdrawalhaccounthnormallyhhashahdebithbalance.
30) Ahdebithentryhalwayshincreaseshanhaccount.
31) Ahtransactionhthathcreditshanhassethaccounthandhcreditshahliabilityhaccounthmusthalsohaffecthoneho
rhmorehotherhaccounts.
32) Ahtransactionhthathdecreaseshahliabilityhandhincreaseshanhassethmusthalsohaffecthonehorhmoreho
therhaccounts.
33) Ifhinsurancehcoveragehforhthehnexthtwohyearshishpaidhforhinhadvance,hthehamounthofhthehp
aymenthishdebitedhtohanhassethaccounthcalledhPrepaidhInsurance.
34) ThehpurchasehofhsupplieshonhcredithshouldhbehrecordedhwithhahdebithtohSupplieshandhahcredithtoh
AccountshPayable.
35) Ifhahcompanyhpurchaseshequipmenthpayinghcash,hthehjournalhentryhtohrecordhthishtransactionh
willhincludehahdebithtohCash.
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Copyrighth2019h©hMcGraw-
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HillhEducation.
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,DOWNLOAD THE Test Bank for Fundamental Accounting Principles 24th Editi
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on Wild h
36) Ifhahcompanyhprovideshserviceshtohahcustomerhonhcredit,hthehcompanyhprovidinghthehservicehs
houldhcredithAccountshReceivable.
37) Whenhahcompanyhbillshahcustomerhforh$700hforhserviceshperformed,hthehjournalhentryhtohr
ecordhthishtransactionhwillhincludehah$700hdebithtohServiceshRevenue.
38) Thehdebthratiohhelpshtohassesshthehriskhahcompanyhhashofhfailinghtohpayhitshdebtshandhishhelpfulht
ohbothhitshownershandhcreditors.
39) Thehhigherhahcompany'shdebthratio,hthehlowerhthehriskhofhahcompanyhnothbeinghablehtohpayhitshd
ebts.
40) Thehdebthratiohishcalculatedhbyhdividinghtotalhassetshbyhtotalhliabilities.
41) Ahcompanyhthathfinanceshahrelativelyhlargehportionhofhitshassetshwithhliabilitieshishsaidhtohhaveha
hhighhdegreehofhfinancialhleverage.
42) Ifhahcompanyhishhighlyhleveraged,hthishmeanshthathithhashrelativelyhhighhriskhofhnothbeinghableht
ohrepayhitshdebt.
43) StarkhCo.hhashliabilitieshofh$105hmillionhandhtotalhassetshofh$350hmillion.hItshdebthratiohish4
0.0%.
44) Ahjournalhentryhthathaffectshonlyhtwohaccountshishcalledhahcompoundhentry.
45) Postinghishthehtransferhofhjournalhentryhinformationhtohthehledger.
46) Transactionsharehrecordedhfirsthinhthehledgerhandhthenhtransferredhtohthehjournal.
47) Ahgeneralhjournalhgiveshahcompletehrecordhofheachhtransactionhinhonehplace,handhshowshthehd
ebitshandhcreditshforheachhtransaction.
48) Thehgeneralhjournalhishahcollectionhofhallhaccountshandhtheirhbalances.
49) Athahgivenhpointhinhtime,hahtrialhbalancehishahlisthofhallhledgerhaccountshandhtheirhbalances.
50) Errorshmadehinhjournalizinghtransactions,hpostinghtohthehledger,handhpreparinghthehtrialhbalancehc
anhstillhexisthinhahbalancedhtrialhbalance.
51) Thehtrialhbalancehcanhservehashahreplacementhforhthehbalancehsheet,hsincehtotalhdebitshmusthe
qualhtotalhcredits.
52) Ahbalancedhtrialhbalancehishproofhthathnoherrorshwerehmadehinhjournalizinghtransactions,hp
ostinghtohthehledger,handhpreparinghthehtrialhbalance.
3
Copyrighth2019h©hMcGraw-
HillhEducation.hAllhrightshreserved.hNohreproductionhorhdistributionhwithouththehpriorhwrittenhconsenthofhMcGraw-
HillhEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Fundamental Accounting Principles 24th Editi
h h h h h h h h h
on Wild h
53) Ifhcashhwashincorrectlyhdebitedhforh$100hinsteadhofhcorrectlyhdebitinghaccountshreceivablehfor
$100,hassuminghnohotherherrors,hthehtrialhbalancehwillhbalance.
54) Thehfinancialhstatemenththathsummarizeshhowhequityhchangeshoverhthehreportinghperiodhishc
alledhthehbalancehsheet.
55) Anhincomehstatementhreportshrevenueshearnedhminushexpenseshincurredhoverhahperiodhofhtime.
56) Thehdetailhofhindividualhrevenuehandhexpensehaccountshishreportedhonhthehbalancehsheet.
57) ThehheadinghonheveryhfinancialhstatementhlistshthehthreehW's—
Whoh(thehnamehofhthehbusiness);hWhath(thehnamehofhthehstatement);handhWhereh(thehorgan
ization'shaddress).
58) Ifhanhowner'shcapitalhaccounthhadhah$10,000hcredithbalancehaththehbeginninghofhthehperiod,handhd
uringhthehperiod,hthehownerhinvestshanhadditionalh$5,000,hthehbalancehinhthehcapitalhaccounthlistedho
nhthehtrialhbalancehwillhbehequalhtohahdebithbalancehofh$5,000.
59) Owner'shwithdrawalsharehnothreportedhonhahbusiness'shincomehstatement.
60) Anhincomehstatementhreportshthehrevenueshearnedhminushexpenseshincurredhbyhahbusinessh
overhahperiodhofhtime.
61) Thehbalancehsheethreportshthehfinancialhpositionhofhahcompanyhathahpointhinhtime.
62) ThehsamehfourhbasichfinancialhstatementsharehpreparedhbyhbothhU.S.hGAAPhandhIFRS.
63) NeitherhU.S.hGAAPhnorhIFRShrequirehthehusehofhaccrualhbasishaccounting.
64) Thehamounthofhnethincomehishaddedhonhthehstatementhofhowner'shequity.
65) Thehaccountinghprocesshbeginshwith:
A) Analysishofhbusinesshtransactionshandhsourcehdocuments.
B) Preparinghfinancialhstatementshandhotherhreports.
C) Analysishofhpreparedhfinancialhstatements.
D) Presentationhofhfinancialhinformationhtohdecision-makers.
E) Preparationhofhthehtrialhbalance.
66) Whichhofhthehfollowinghstatementshishnothtrue:
A) Accountshreceivableharehheldhbyhahseller.
B) Accountshreceivableharisehfromhcredithsales.
C) Accountshreceivableharehincreasedhbyhcustomerhpayments.
D) Accountshreceivableharehclassifiedhashassets.
E) Accountshreceivableharehincreasedhbyhbillingshtohcustomers.
4
Copyrighth2019h©hMcGraw-
HillhEducation.hAllhrightshreserved.hNohreproductionhorhdistributionhwithouththehpriorhwrittenhconsenthofhMcGraw-
HillhEducation.
mynursytest.store
h h h h h h h h h
on Wild h
FundamentalhAccountinghPrinciples,h24eh(Wild)hCha
pterh2 AnalyzinghandhRecordinghTransactions
1) Businesshtransactionshandheventsharehthehstartinghpointshofhfinancialhstatements.
2) Preparationhofhahtrialhbalancehishthehfirsthstephinhprocessinghahfinancialhtransaction.
3) Sourcehdocumentshidentifyhandhdescribehtransactionshandheventshenteringhthehaccountingh
process.
4) Itemshsuchhashsaleshreceipts,hbankhstatements,hchecks,handhpurchasehordersharehexampleshofhahb
usiness'shsourcehdocuments.
5) Anhaccounthishahrecordhofhincreaseshandhdecreaseshinhahspecifichasset,hliability,hequity,hrevenue,ho
rhexpensehitem.
6) Ahcustomer'shpromisehtohpayhonhcredithishclassifiedhashanhaccounthpayablehbyhthehseller.
7) Withdrawalshbyhthehownerharehahbusinesshexpense.
8) Thehpurchasehofhlandhandhbuildingshwillhgenerallyhbehrecordedhinhthehsamehledgerhaccount.
9) Unearnedhrevenuesharehclassifiedhashliabilities.
10) Cashhwithdrawnhbyhthehownerhforhpersonalhexpenseshshouldhbehtreatedhashanhexpensehofhthehb
usiness.
11) Whenhahcompanyhprovideshserviceshforhwhichhcashhwillhnothbehreceivedhuntilhsomehfuturehd
ate,hthehcompanyhshouldhrecordhthehamounthbilledhashaccountshreceivable.
12) Ownerhwithdrawalshalwayshdecreasehequity.
13) Expenseshalwayshdecreasehequity.
14) Revenueshalwayshincreasehequity.
15) Ownerhinvestmentshalwayshdecreasehequity.
16) Unearnedhrevenuehishahliabilityhthathishsettledhinhthehfuturehwhenhahcompanyhdelivershitshp
roductshorhservices.
17) Ahcompany'shcharthofhaccountshishahlisthofhallhthehaccountshusedhandhincludeshanhidentificationhn
umberhassignedhtoheachhaccount.
1
Copyrighth2019h©hMcGraw-
HillhEducation.hAllhrightshreserved.hNohreproductionhorhdistributionhwithouththehpriorhwrittenhconsenthofhMcGraw-
HillhEducation.
mynursytest.store
,DOWNLOAD THE Test Bank for Fundamental Accounting Principles 24th Editi
h h h h h h h h h
on Wild h
18) Anhaccount'shbalancehishthehdifferencehbetweenhthehtotalhdebitshandhtotalhcreditshforhtheha
ccount,hincludinghanyhbeginninghbalance.
19) Thehrighthsidehofhanhaccounthishcalledhthehdebithside.
20) Inhahdouble-
entryhaccountinghsystem,htotalhdebitshmusthequalhtotalhcreditshforhallhentries,handhtotalhdebithaccou
nthbalanceshinhthehledgerhmusthequalhtotalhcredithaccounthbalances.
21) Increaseshinhliabilityhaccountsharehrecordedhashdebits.
22) Debitshincreasehassethandhexpensehaccounts.
23) Creditshalwayshincreasehaccounthbalances.
24) Anhexpensehaccounthnormallyhhashahcredithbalance.
25) Ahrevenuehaccounthnormallyhhashahdebithbalance.
26) Assethaccountsharehdecreasedhbyhdebits.
27) Debithmeanshincreasehandhcredithmeanshdecreasehforhallhaccounts.
28) Assethaccountshnormallyhhavehdebithbalanceshandhrevenuehaccountshnormallyhhavehcredith
balances.
29) Anhowner'shwithdrawalhaccounthnormallyhhashahdebithbalance.
30) Ahdebithentryhalwayshincreaseshanhaccount.
31) Ahtransactionhthathcreditshanhassethaccounthandhcreditshahliabilityhaccounthmusthalsohaffecthoneho
rhmorehotherhaccounts.
32) Ahtransactionhthathdecreaseshahliabilityhandhincreaseshanhassethmusthalsohaffecthonehorhmoreho
therhaccounts.
33) Ifhinsurancehcoveragehforhthehnexthtwohyearshishpaidhforhinhadvance,hthehamounthofhthehp
aymenthishdebitedhtohanhassethaccounthcalledhPrepaidhInsurance.
34) ThehpurchasehofhsupplieshonhcredithshouldhbehrecordedhwithhahdebithtohSupplieshandhahcredithtoh
AccountshPayable.
35) Ifhahcompanyhpurchaseshequipmenthpayinghcash,hthehjournalhentryhtohrecordhthishtransactionh
willhincludehahdebithtohCash.
2
Copyrighth2019h©hMcGraw-
HillhEducation.hAllhrightshreserved.hNohreproductionhorhdistributionhwithouththehpriorhwrittenhconsenthofhMcGraw-
HillhEducation.
mynursytest.store
,DOWNLOAD THE Test Bank for Fundamental Accounting Principles 24th Editi
h h h h h h h h h
on Wild h
36) Ifhahcompanyhprovideshserviceshtohahcustomerhonhcredit,hthehcompanyhprovidinghthehservicehs
houldhcredithAccountshReceivable.
37) Whenhahcompanyhbillshahcustomerhforh$700hforhserviceshperformed,hthehjournalhentryhtohr
ecordhthishtransactionhwillhincludehah$700hdebithtohServiceshRevenue.
38) Thehdebthratiohhelpshtohassesshthehriskhahcompanyhhashofhfailinghtohpayhitshdebtshandhishhelpfulht
ohbothhitshownershandhcreditors.
39) Thehhigherhahcompany'shdebthratio,hthehlowerhthehriskhofhahcompanyhnothbeinghablehtohpayhitshd
ebts.
40) Thehdebthratiohishcalculatedhbyhdividinghtotalhassetshbyhtotalhliabilities.
41) Ahcompanyhthathfinanceshahrelativelyhlargehportionhofhitshassetshwithhliabilitieshishsaidhtohhaveha
hhighhdegreehofhfinancialhleverage.
42) Ifhahcompanyhishhighlyhleveraged,hthishmeanshthathithhashrelativelyhhighhriskhofhnothbeinghableht
ohrepayhitshdebt.
43) StarkhCo.hhashliabilitieshofh$105hmillionhandhtotalhassetshofh$350hmillion.hItshdebthratiohish4
0.0%.
44) Ahjournalhentryhthathaffectshonlyhtwohaccountshishcalledhahcompoundhentry.
45) Postinghishthehtransferhofhjournalhentryhinformationhtohthehledger.
46) Transactionsharehrecordedhfirsthinhthehledgerhandhthenhtransferredhtohthehjournal.
47) Ahgeneralhjournalhgiveshahcompletehrecordhofheachhtransactionhinhonehplace,handhshowshthehd
ebitshandhcreditshforheachhtransaction.
48) Thehgeneralhjournalhishahcollectionhofhallhaccountshandhtheirhbalances.
49) Athahgivenhpointhinhtime,hahtrialhbalancehishahlisthofhallhledgerhaccountshandhtheirhbalances.
50) Errorshmadehinhjournalizinghtransactions,hpostinghtohthehledger,handhpreparinghthehtrialhbalancehc
anhstillhexisthinhahbalancedhtrialhbalance.
51) Thehtrialhbalancehcanhservehashahreplacementhforhthehbalancehsheet,hsincehtotalhdebitshmusthe
qualhtotalhcredits.
52) Ahbalancedhtrialhbalancehishproofhthathnoherrorshwerehmadehinhjournalizinghtransactions,hp
ostinghtohthehledger,handhpreparinghthehtrialhbalance.
3
Copyrighth2019h©hMcGraw-
HillhEducation.hAllhrightshreserved.hNohreproductionhorhdistributionhwithouththehpriorhwrittenhconsenthofhMcGraw-
HillhEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Fundamental Accounting Principles 24th Editi
h h h h h h h h h
on Wild h
53) Ifhcashhwashincorrectlyhdebitedhforh$100hinsteadhofhcorrectlyhdebitinghaccountshreceivablehfor
$100,hassuminghnohotherherrors,hthehtrialhbalancehwillhbalance.
54) Thehfinancialhstatemenththathsummarizeshhowhequityhchangeshoverhthehreportinghperiodhishc
alledhthehbalancehsheet.
55) Anhincomehstatementhreportshrevenueshearnedhminushexpenseshincurredhoverhahperiodhofhtime.
56) Thehdetailhofhindividualhrevenuehandhexpensehaccountshishreportedhonhthehbalancehsheet.
57) ThehheadinghonheveryhfinancialhstatementhlistshthehthreehW's—
Whoh(thehnamehofhthehbusiness);hWhath(thehnamehofhthehstatement);handhWhereh(thehorgan
ization'shaddress).
58) Ifhanhowner'shcapitalhaccounthhadhah$10,000hcredithbalancehaththehbeginninghofhthehperiod,handhd
uringhthehperiod,hthehownerhinvestshanhadditionalh$5,000,hthehbalancehinhthehcapitalhaccounthlistedho
nhthehtrialhbalancehwillhbehequalhtohahdebithbalancehofh$5,000.
59) Owner'shwithdrawalsharehnothreportedhonhahbusiness'shincomehstatement.
60) Anhincomehstatementhreportshthehrevenueshearnedhminushexpenseshincurredhbyhahbusinessh
overhahperiodhofhtime.
61) Thehbalancehsheethreportshthehfinancialhpositionhofhahcompanyhathahpointhinhtime.
62) ThehsamehfourhbasichfinancialhstatementsharehpreparedhbyhbothhU.S.hGAAPhandhIFRS.
63) NeitherhU.S.hGAAPhnorhIFRShrequirehthehusehofhaccrualhbasishaccounting.
64) Thehamounthofhnethincomehishaddedhonhthehstatementhofhowner'shequity.
65) Thehaccountinghprocesshbeginshwith:
A) Analysishofhbusinesshtransactionshandhsourcehdocuments.
B) Preparinghfinancialhstatementshandhotherhreports.
C) Analysishofhpreparedhfinancialhstatements.
D) Presentationhofhfinancialhinformationhtohdecision-makers.
E) Preparationhofhthehtrialhbalance.
66) Whichhofhthehfollowinghstatementshishnothtrue:
A) Accountshreceivableharehheldhbyhahseller.
B) Accountshreceivableharisehfromhcredithsales.
C) Accountshreceivableharehincreasedhbyhcustomerhpayments.
D) Accountshreceivableharehclassifiedhashassets.
E) Accountshreceivableharehincreasedhbyhbillingshtohcustomers.
4
Copyrighth2019h©hMcGraw-
HillhEducation.hAllhrightshreserved.hNohreproductionhorhdistributionhwithouththehpriorhwrittenhconsenthofhMcGraw-
HillhEducation.
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