CHAPTER 2 : ANALYZING TRANSACTIONS
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TEST BANK FOR Il` Il` Il`
ACCOUNTING 26TH EDIT ION Il` Il` Il`
CARL S. WARREN, JAME S M. Il` Il` Il` Il` Il`
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REEVE, JONATHAN DUCH AC Il` Il`
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, 1. Accounts are records of increases and decreases in individual financial statement items.
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a. True Il`
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b. False Il`
ANSWER: True Il` Il`
DIFFICULTY: Easy Il` Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
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ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose Il` Il` Il` Il`
ACCT.ACBSP.APC.02 - GAAP Il` Il` Il` Il`
ACCT.AICPA.FN.03 - Measurement Il` Il` Il`
BUSPROG: Analytic Il` Il`
2. A chart of accounts is a listing of accounts that make up the journal. a. True
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b. FalseIl` Il`
ANSWER: False
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DIFFICULTY: Easy Il` Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
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ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose Il` Il` Il` Il`
ACCT.ACBSP.APC.02 - GAAP Il` Il` Il` Il`
ACCT.AICPA.FN.03 - Measurement Il` Il` Il`
BUSPROG: Analytic Il` Il`
3. The chart of accounts should be the same for each business.
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a. True Il`
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b. False Il`
ANSWER: False Il` Il`
DIFFICULTY: Moderate Il` Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
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ACCT.ACBSP.APC.02 GAAP Il` Il`
ACCT.ACBSP.APC.03 Business Forms Il` Il` Il`
ACCT.AICPA.FN.03 Il`
BUSPROG: Analytic Il`
4. Accounts payable are accounts that you expect will be paid to you. a. True
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b. FalseIl` Il`
ANSWER: Il` False Il`
DIFFICULTY: Il` Moderate Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: Il` Il` ACCT.WARD.16.02-01 - 02-01 Il` Il` Il`
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP Il` Il` Il` Il` Il`
ACCT.ACBSP.APC.04 - Cash vs. Accrual Il` Il` Il` Il` Il`
ACCREDITING STANDARDS: Il` Il` - Il`
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- Measurement
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, ACCT.AICPA.FN.03 - Measurement Il` Il` Il`
BUSPROG: Analytic Il` Il`
5. Consuming goods and services in the process of generating revenues results in expenses.
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a. True
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b. False Il` Il`
ANSWER: True
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DIFFICULTY: Easy Il` Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
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ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP Il` Il` Il` Il` Il`
ACCT.ACBSP.APC.06 - Recording Transactions Il` Il` Il` Il`
ACCT.AICPA.FN.03 - Measurement Il` Il` Il` Il`
BUSPROG: Analytic Il` Il`
6. Prepaid expenses are an example of an expense.
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a. True Il`
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b. False Il`
ANSWER: False
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DIFFICULTY: Moderate Il` Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
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ACCT.ACBSP.APC.02 GAAP Il` Il`
ACCT.ACBSP.APC.04 Cash vs. Accrual Il` Il` Il` Il`
ACCREDITING STANDARDS: Il` Il` - Il`
- Il`
ACCT.AICPA.FN.03 - Measurement BUSPROG: Il` Il` Il`
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Analytic
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, 7. The Unearned Revenues account is an example of a liability.
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a. True Il`
b. False Il`
ANSWER: Il` True Il`
DIFFICULTY: Il` Moderate Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: Il` Il` ACCT.WARD.16.02-01 - 02-01 Il` Il` Il`
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP Il` Il` Il` Il` Il`
ACCT.ACBSP.APC.04 - Cash vs. Accrual Il` Il` Il` Il` Il`
ACCT.AICPA.FN.03 - Measurement BUSPROG: Il` Il` Il`
Analytic Il` Il`
8. The Drawings account is an example of an expense.
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a. True Il`
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b. False Il`
ANSWER: False
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DIFFICULTY: Moderate Il` Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
Il` Il` Il` Il` Il`
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP Il` Il` Il` Il` Il`
ACCT.ACBSP.APC.06 - Recording Transactions Il` Il` Il` Il`
ACCT.AICPA.FN.03 - Measurement BUSPROG: Il` Il` Il` Il`
Analytic Il` Il`
9. Accounts in the ledger are usually maintained in alphabetical order.
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a. True Il`
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b. False Il`
ANSWER: Il`False Il`
DIFFICULTY: Moderate Il` Il`
Bloom’s: Remembering Il` Il`
LEARNING OBJECTIVES: ACCT.WARD.16.02-01 - 02-01
Il` Il` Il` Il` Il`
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP Il` Il` Il` Il` Il`
ACCT.ACBSP.APC.06 - Recording Transactions Il` Il` Il` Il`
ACCT.AICPA.FN.03 - Measurement BUSPROG: Il` Il` Il` Il`
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Analytic Il` Il`
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