TEST BANK for Financial Accounting for MBAs 8th Edition by Peter Easton & John Wild contains verified questions and answers graded A+

Test Bank For Financial Accounting For Mbas 8th
Edition By Peter Easton & John Wild

,Financial Statements And The Accounting System



True / False Questions



1. The First Step To Get From Transactions And Events To Financial Statements Is To
Identify Each Transaction From Source Documents.


True False


2. Preparation Of A Trial Balance Is The First Step In Processing A Financial Transaction.


True False


3. Source Documents Identify And Describe Business Transactions And Are The Basis For
Accounting Entries.


True False


4. Items Such As Sales Tickets, Bank Statements, Checks, And Purchase Orders Are Examples
Of A Business's Source Documents.


True False


5. An Account Is A Record Of Increases And Decreases In A Specific Asset, Liability, Equity,
Revenue, Or Expense Item.


True False

,6. A Customer's Promise To Pay On Credit Is Classified As An Account Payable By The Seller.


True False


7. Dividends Paid To The Stockholders Are A Business Expense.


True False


8. The Purchase Of Land And Buildings Will Generally Be Recorded In The Same Ledger Account.


True False


9. Unearned Revenues Are Classified As Liabilities.


True False


10. Cash Paid To Stockholders By The Business Of A Corporation And Used For Personal Expenses,
Should Be Treated As An Expense Of The Business.


True False


11. When A Company Provides Services For Which Cash Will Not Be Received Until Some Future
Date, The Company Should Record The Amount Charged As Accounts Receivable.


True False


12. A Company's Chart Of Accounts Is A List Of All The Accounts Used And Includes An Identification
Number Assigned To Each Account.


True False


13. An Account's Balance Is The Difference Between The Total Debits And Total Credits For The
Account, Including Any Beginning Balance.


True False

, 14. The Right Side Of An Account Is Called The Debit Side.


True False


15. In A Double-Entry Accounting System, The Total Dollar Amount Debited Must Always Equal The
Total Dollar Amount Credited.


True False


16. Increases In Liability Accounts Are Recorded As Debits.


True False


17. Debits Increase Asset And Expense Accounts.


True False


18. Credits Always Increase Account Balances.


True False


19. Crediting An Expense Account Decreases It.


True False


20. A Revenue Account Normally Has A Debit Balance.


True False


21. Asset Accounts Are Normally Decreased By Debits.


True False


22. Debit Means Increase And Credit Means Decrease For All Accounts.


True False