True/False
Indicate whether the sentence or statement is true
or false.
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1.
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The
Objective Evidence accounting concept requires that there be proof that a transaction did
occur.
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2.
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Examples of source documents include checks, sales invoices, memorandums, and
letters.
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3.
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The
source document for all cash payments is a sales invoice.
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4.
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A
receipt is the source document for cash received from transactions other than sales.
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5.
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A
calculator tape is the source document for daily cash sales.
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6.
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The
source document used when supplies are bought on account is a memorandum.
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7.
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The
source document used when supplies bought on account are paid for is a check.
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8.
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The
journal columns used to record receiving cash from sales are cash debit and sales
credit.
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9.
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The
source document sales invoice is abbreviated as SI in a journal entry.
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10.
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The
journal columns used to record paying cash for rent are general debit and cash credit.
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11.
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The
journal columns used to record paying cash to the owner for personal use are general debit and cash
credit.
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12.
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To
correct an error in a journal, simply erase the incorrect item and write the correct item in the same
place.
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13.
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Dollars and cents signs and decimal points should be used when writing amounts on
ruled accounting pages.
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14.
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Recording transactions in a journal is called journalizing.
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15.
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A
transaction recorded in a journal is not considered a permanent record.
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16.
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A
journal amount column headed with an account title is a special amount column.
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17.
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A
journal amount column that is not headed with an account title is a general amount
column.
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18.
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Transactions are recorded in a journal in alphabetical order.
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19.
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Information for each transaction recorded in a journal is an entry.
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20.
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Double-entry accounting assures that the debits equal credits.
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21.
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A
check is a business form ordering a bank to pay cash from a bank account.
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22.
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The
source document for cash payment transactions is a receipt.
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23.
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A
calculator tape is not used as the source document for cash sales transactions.
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24.
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A
business form giving written acknowledgement for cash received is a receipt.
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25.
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A
receipt is the source document for cash received from sales transactions.
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26.
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A
complete entry consists of the date, the debit amount, and the credit amount.
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27.
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Before a transaction is recorded in a journal, it is analyzed into its debit and
credit parts.
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28.
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The
year and the month are written only once on a journal page.
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29.
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The
day of the month is written on each journal page only for the first entry.
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30.
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A
journal page is proved by verifying that the total debits equal the total credits.
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31.
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Double lines are ruled across a journal's amount columns to indicate that the totals
have been verified as correct.
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32.
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Cash
is always proved at the end of a month.
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33.
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A
source document is a form for recording transactions in chronological order.
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34.
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A
memorandum is a business form giving written acknowledgment for cash received.
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35.
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When
an amount to be recorded in a journal is in even dollars, there is no need to record anything in the
cents column.
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Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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36.
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The
recording of debit and credit parts of a transaction is ____. a. | checking
equality | c. | single-entry
accounting | b. | double-entry accounting | d. | transaction analysis | | | | |
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37.
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Preparing source documents for each transaction is an application of the accounting
concept ____. a. | Business
Entity | c. | Objective
Evidence | b. | Unit of Measurement | d. | Going Concern | | | | |
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38.
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A
business form ordering a bank to pay cash from a bank account is a ____. a. | check | c. | receipt | b. | memorandum | d. | all of the above | | | | |
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39.
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A
journal entry includes ____. a. | the debit part of a transaction recorded under one date and
credit part recorded under a later date | b. | the debit and credit parts of a transaction recorded in one
place | c. | more debits than credits | d. | none of the
above | | |
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40.
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On
each journal page, the year is written ____. a. | for each entry | c. | only for the first entry | b. | on the first
line of each column | d. | none of the
above | | | | |
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41.
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On
each journal page, the month is written ____. a. | for each entry | c. | only for the first entry | b. | on the first
line of each column | d. | none of the
above | | | | |
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42.
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The
entry to record receipt of cash from the owner as an investment is ____. a. | debit Capital,
credit Cash | c. | debit Cash,
credit Accounts Payable | b. | debit Cash, credit Capital | d. | none of the above | | | | |
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43.
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The
account debited when cash is paid for supplies is ____. a. | Supplies | c. | Supplies
Expense | b. | Cash | d. | none of the above | | | | |
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44.
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When
cash is paid for insurance, ____. a. | the Prepaid Insurance account is
decreased | b. | the Prepaid Insurance account is
credited | c. | the balance of the Prepaid Insurance account is
increased | d. | none of the above | | |
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45.
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When
supplies are bought on account, the account debited is ____. a. | Cash | c. | Accounts
Payable | b. | Supplies | d. | none of the above | | | | |
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46.
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A
single line ruled across the journal's amount columns indicates ____. a. | the date is the
last day of the month | b. | the totals have been verified as
correct | c. | a cash sales transaction is to be
recorded | d. | none of the above | | |
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47.
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At
the end of a month, even if the journal page is not filled, ____. a. | cash is paid to
the owner for personal use | b. | cash is paid on account for a
liability | c. | the journal page is proved and ruled | d. | none of the
above | | |
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48.
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Determining that the amount of cash agrees with the accounting records is
____. a. | proving a
journal | b. | proving that debits equal credits | c. | forwarding
totals to a new journal page | d. | proving cash | | |
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49.
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At
the end of a month, if the amount of cash is the same as the balance shown on the next check stub,
____. a. | the journal is
proved | c. | debits equal
credits | b. | cash is proved | d. | none of the above | | | | |
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50.
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If an
error is recorded in a journal entry, ____. a. | cancel the error by drawing a neat line through the
error | b. | correct the entry by writing the correct item above the
canceled error | c. | do not erase the incorrect item | d. | all of the
above | | |
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51.
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When
cash is paid on account, the amount is recorded in the ____. a. | Sales Credit
column and Cash Debit column | b. | General Debit column and Cash Credit
column | c. | General Credit column and Cash Debit
column | d. | General Debit column and Accounts Payable Debit
column | | |
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52.
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When
cash is paid for utilities, the amount is recorded in the ____. a. | Cash Credit
column and General Debit column | b. | Sales Credit column and General Debit
column | c. | General Credit column and Cash Debit
column | d. | General Credit column and Sales Credit
column | | |
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53.
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When
cash is received on account, the amount is recorded in the ____. a. | Accounts
Receivable Debit column and Cash Credit column | b. | Sales Credit
column and Cash Debit column | c. | General Debit column and Cash Credit
column | d. | Cash Debit column and General Credit
column | | |
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