MEDSTUDY.COM
Test BFuallnfikleaftohtrtpI:n//teesrtm
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Nelson
,MEDSTUDY.COM
Test bank for intermediate accounting 19th 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
,MEDSTUDY.COM
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
, MEDSTUDY.COM
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 age 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. Creditto capital
stock.
D. Credit to
,
revenue.
Test BFuallnfikleaftohtrtpI:n//teesrtm
, ,, banekdsciaaftee
.euA
/Tc
escto
-Bu
annkt-fionr-gInt7
ertm
heE
diadtei-tAio
ccn Stipnigc-7ethl-aEndidtio,nS-Sepipceela,nN
oun d ,-Seelpseo,-n
Nelson
,MEDSTUDY.COM
Test bank for intermediate accounting 19th 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
,MEDSTUDY.COM
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
, MEDSTUDY.COM
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 age 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. Creditto capital
stock.
D. Credit to
,
revenue.
