,DOWNLOAD THE Test Bank for Financial Accounting Information for
n n n n n n n n
Decisions 8th Edition John Wild n n n n n
Chapter 02 n
Financial Statements and the Accounting System
n n n n n n
True / False Questions
n n n
1. The first step to get from transactions and events to financial statements is to identify
n n n n n n n n n n n n n n
neachtransaction from source documents.
n n n n
True False
2. Preparation of a trial balance is the first step in processing a financial transaction.
n n n n n n n n n n n n n
True False
3. Source documents identify and describe business transactions and are the basis for
n n n n n n n n n n n
naccountingentries. n
True False
4. Items such as sales tickets, bank statements, checks, and purchase orders are examples of
n n n n n n n n n n n n n
nabusiness's source documents.
n n n
True False
5. An account is a record of increases and decreases in a specific asset, liability, equity, revenue,
n n n n n n n n n n n n n n n
norexpense item.
n n
True False
2-1
Copyright n© n2017 nMcGraw-Hill nEducation. nAll nrights nreserved. nNo nreproduction nor ndistribution nwithout nthe nprior nwritten nconsent nof
nMcGraw-HillnEducation.
mynursytest.store
,DOWNLOAD THE Test Bank for Financial Accounting Information for
n n n n n n n n
Decisions 8th Edition John Wild n n n n n
6. A customer's promise to pay on credit is classified as an account payable by the seller.
n n n n n n n n n n n n n n n
True False
7. Dividends paid to the stockholders are a business expense.
n n n n n n n n
True False
8. The purchase of land and buildings will generally be recorded in the same ledger account.
n n n n n n n n n n n n n n
True False
9. Unearned revenues are classified as liabilities.
n n n n n
True False
10. Cash paid to stockholders by the business of a corporation and used for personal expenses,
n n n n n n n n n n n n n n
nshouldbe treated as an expense of the business.
n n n n n n n n
True False
11. When a company provides services for which cash will not be received until some future date,
n n n n n n n n n n n n n n n
nthecompany should record the amount charged as accounts receivable.
n n n n n n n n n
True False
12. A company's chart of accounts is a list of all the accounts used and includes an identification
n n n n n n n n n n n n n n n n
nnumberassigned to each account.n n n n
True False
13. An account's balance is the difference between the total debits and total credits for the
n n n n n n n n n n n n n n
naccount,including any beginning balance.
n n n n
True False
2-2
Copyright n© n2017 nMcGraw-Hill nEducation. nAll nrights nreserved. nNo nreproduction nor ndistribution nwithout nthe nprior nwritten nconsent nof
nMcGraw-HillnEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Financial Accounting Information for
n n n n n n n n
Decisions 8th Edition John Wild n n n n n
14. The right side of an account is called the debit side.
n n n n n n n n n n
True False
15. In a double-entry accounting system, the total dollar amount debited must always equal the
n n n n n n n n n n n n n
totaldollar amount credited.
n n n n
True False
16. Increases in liability accounts are recorded as debits.
n n n n n n n
True False
17. Debits increase asset and expense accounts.
n n n n n
True False
18. Credits always increase account balances.
n n n n
True False
19. Crediting an expense account decreases it.
n n n n n
True False
20. A revenue account normally has a debit balance.
n n n n n n n
True False
21. Asset accounts are normally decreased by debits.
n n n n n n
True False
22. Debit means increase and credit means decrease for all accounts.
n n n n n n n n n
True False
2-3
Copyright n© n2017 nMcGraw-Hill nEducation. nAll nrights nreserved. nNo nreproduction nor ndistribution nwithout nthe nprior nwritten nconsent nof
nMcGraw-HillnEducation.
mynursytest.store
n n n n n n n n
Decisions 8th Edition John Wild n n n n n
Chapter 02 n
Financial Statements and the Accounting System
n n n n n n
True / False Questions
n n n
1. The first step to get from transactions and events to financial statements is to identify
n n n n n n n n n n n n n n
neachtransaction from source documents.
n n n n
True False
2. Preparation of a trial balance is the first step in processing a financial transaction.
n n n n n n n n n n n n n
True False
3. Source documents identify and describe business transactions and are the basis for
n n n n n n n n n n n
naccountingentries. n
True False
4. Items such as sales tickets, bank statements, checks, and purchase orders are examples of
n n n n n n n n n n n n n
nabusiness's source documents.
n n n
True False
5. An account is a record of increases and decreases in a specific asset, liability, equity, revenue,
n n n n n n n n n n n n n n n
norexpense item.
n n
True False
2-1
Copyright n© n2017 nMcGraw-Hill nEducation. nAll nrights nreserved. nNo nreproduction nor ndistribution nwithout nthe nprior nwritten nconsent nof
nMcGraw-HillnEducation.
mynursytest.store
,DOWNLOAD THE Test Bank for Financial Accounting Information for
n n n n n n n n
Decisions 8th Edition John Wild n n n n n
6. A customer's promise to pay on credit is classified as an account payable by the seller.
n n n n n n n n n n n n n n n
True False
7. Dividends paid to the stockholders are a business expense.
n n n n n n n n
True False
8. The purchase of land and buildings will generally be recorded in the same ledger account.
n n n n n n n n n n n n n n
True False
9. Unearned revenues are classified as liabilities.
n n n n n
True False
10. Cash paid to stockholders by the business of a corporation and used for personal expenses,
n n n n n n n n n n n n n n
nshouldbe treated as an expense of the business.
n n n n n n n n
True False
11. When a company provides services for which cash will not be received until some future date,
n n n n n n n n n n n n n n n
nthecompany should record the amount charged as accounts receivable.
n n n n n n n n n
True False
12. A company's chart of accounts is a list of all the accounts used and includes an identification
n n n n n n n n n n n n n n n n
nnumberassigned to each account.n n n n
True False
13. An account's balance is the difference between the total debits and total credits for the
n n n n n n n n n n n n n n
naccount,including any beginning balance.
n n n n
True False
2-2
Copyright n© n2017 nMcGraw-Hill nEducation. nAll nrights nreserved. nNo nreproduction nor ndistribution nwithout nthe nprior nwritten nconsent nof
nMcGraw-HillnEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Financial Accounting Information for
n n n n n n n n
Decisions 8th Edition John Wild n n n n n
14. The right side of an account is called the debit side.
n n n n n n n n n n
True False
15. In a double-entry accounting system, the total dollar amount debited must always equal the
n n n n n n n n n n n n n
totaldollar amount credited.
n n n n
True False
16. Increases in liability accounts are recorded as debits.
n n n n n n n
True False
17. Debits increase asset and expense accounts.
n n n n n
True False
18. Credits always increase account balances.
n n n n
True False
19. Crediting an expense account decreases it.
n n n n n
True False
20. A revenue account normally has a debit balance.
n n n n n n n
True False
21. Asset accounts are normally decreased by debits.
n n n n n n
True False
22. Debit means increase and credit means decrease for all accounts.
n n n n n n n n n
True False
2-3
Copyright n© n2017 nMcGraw-Hill nEducation. nAll nrights nreserved. nNo nreproduction nor ndistribution nwithout nthe nprior nwritten nconsent nof
nMcGraw-HillnEducation.
mynursytest.store
