Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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Where does a debt account decrease?
a. | On the debit side | b. | On the credit side | c. | Neither a. nor
b. | d. | Both a. and b.
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2.
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In general, the asset side of the balance sheet is
designed to summarize balance sheet accounts with:
a. | Credit balances. | b. | Debit balances. | c. | Neither a. nor
b | d. | Both a. and b
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3.
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Alf sells merchandise on credit to Bob for 100 CU.
How will the transaction be recorded in Alf’s accounting records?
a.
Sales of merchandise |
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Credit : 100 |
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Sales of merchandise |
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Credit : 100 |
Customer Bob |
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Credit : 100 |
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Sales of merchandise |
Debit : 100 |
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| d.
Sales of merchandise |
Debit : 100 |
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Customer Bob |
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Credit : 100 |
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4.
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Which mechanism is entirely based on the
fundamental idea that each individual accounting transaction has two sides, which are always
balanced?
a. | Accrual accounting | b. | Double entry bookkeeping | c. | Prudence
principle | d. | Cash accounting
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5.
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Which of the following statements is
false?
a. | If you increase an asset account, you could increase a
liability account. | b. | If you decrease an
asset account, you could increase a shareholders’ equity account. | c. | If you increase an asset account, you could decrease an asset
account. | d. | If you decrease an asset account, you could decrease a
shareholders’ equity account.
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6.
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Each accounting transaction originates in
a:
a. | Document. | b. | Ledger. | c. | Journal. | d. | Trial
balance. |
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7.
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In which order does the journal list
transactions?
a. | Alphabetical | b. | Decreasing | c. | Increasing | d. | Chronological
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8.
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Which of the following accounts is expected to
present a debit balance?
a. | Bank overdrafts | b. | Financial income | c. | Financial
interest | d. | Bank borrowing
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9.
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What is the final stage of the accounting
process?
a. | Journal | b. | Financial statement | c. | Ledger | d. | Trial
balance |
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10.
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A chart of accounts is a logically organized list
of all recognized accounts used in recording all transactions in a firm.
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