1
ACCT 2300 TTU Exam 1 Questions with Correct
Answers | Updated (100% Correct Answers)
A chart of accounts: Answer: lists all of an organization's accounts and account
numbers.
The first step in recording a transaction in the journal is: Answer: specifying each
account affected by the transaction and classifying the account by type.
Which financial statement answers the following question: How well did the
company perform during the year? Answer: income statement
The trial balance is used to determine if: Answer: total debits of all the accounts
equal total credits of all the accounts.
When services are performed on account: Answer: accounts receivable is
increased
The CORRECT data flow from one financial statement to the next is: Answer:
income statement, statement of retained earnings, balance sheet, statement of
cash flows.
In order to see a complete transaction in one place, you would need to look at
the: Answer: journal
The normal balance of a revenue account is a ________ because revenues increase
________. Answer: credit; retained earnings
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, 2
Which of the following is a TRUE statement regarding expenses? Answer: The
expense recognition principle recognizes expenses in the same period in which
the related revenues are earned.
When preparing the financial statements of a company: Answer: current assets
are the most liquid assets.
A trial balance has which of the following features? Answer: totals for all
accounts listed in the ledger
An important rule of debits and credits is: Answer: credits increase revenue
accounts.
A doctor performed surgery in March and did not receive cash from the patient
until July. Under accrual accounting, the doctor recognizes revenue: Answer: in
March
The normal balance of an expense account is a ________ because expenses
decrease ________. Answer: debit; retained earnings
The revenue principle deals with the following: Answer: when to record revenue
and the amount of revenue to record.
Which of the following statements, regarding the rules of debits and credits, is
CORRECT? Answer: Revenue is increased by a credit.
The beginning retained earnings balance is found on the: Answer: statement of
retained earnings.
© 2026 All rights reserved
ACCT 2300 TTU Exam 1 Questions with Correct
Answers | Updated (100% Correct Answers)
A chart of accounts: Answer: lists all of an organization's accounts and account
numbers.
The first step in recording a transaction in the journal is: Answer: specifying each
account affected by the transaction and classifying the account by type.
Which financial statement answers the following question: How well did the
company perform during the year? Answer: income statement
The trial balance is used to determine if: Answer: total debits of all the accounts
equal total credits of all the accounts.
When services are performed on account: Answer: accounts receivable is
increased
The CORRECT data flow from one financial statement to the next is: Answer:
income statement, statement of retained earnings, balance sheet, statement of
cash flows.
In order to see a complete transaction in one place, you would need to look at
the: Answer: journal
The normal balance of a revenue account is a ________ because revenues increase
________. Answer: credit; retained earnings
© 2026 All rights reserved
, 2
Which of the following is a TRUE statement regarding expenses? Answer: The
expense recognition principle recognizes expenses in the same period in which
the related revenues are earned.
When preparing the financial statements of a company: Answer: current assets
are the most liquid assets.
A trial balance has which of the following features? Answer: totals for all
accounts listed in the ledger
An important rule of debits and credits is: Answer: credits increase revenue
accounts.
A doctor performed surgery in March and did not receive cash from the patient
until July. Under accrual accounting, the doctor recognizes revenue: Answer: in
March
The normal balance of an expense account is a ________ because expenses
decrease ________. Answer: debit; retained earnings
The revenue principle deals with the following: Answer: when to record revenue
and the amount of revenue to record.
Which of the following statements, regarding the rules of debits and credits, is
CORRECT? Answer: Revenue is increased by a credit.
The beginning retained earnings balance is found on the: Answer: statement of
retained earnings.
© 2026 All rights reserved
