Basic Bookkeeping-16

The normal balance of an account is ?
1. left side
2. right side
3. side that increases the account's balance
4. side that decreases the account's balance
The double entry system requires that each transaction must be recorded ?
1. in at least two accounts
2. in a journal and the ledger
3. as an asset and a liability
4. all othe answers are correct
The term Debit always means an increase and the term Credit always means a decreases.
1. True
2. False
Draws and Dividends do NOT affect the profit/loss for a period.
1. True
2. False
Sales less operating expenses equals Gross Profit.
1. True
2. False
Using the Periodic Inventory System, detailed records are maintained of the items purchased and sold.
1. True
2. False
Large inventory amounts are an indicator of large profits.
1. True
2. False
The First-in, First-out (FIFO) inventory costing method results in assigning the most recent costs to Cost Of Goods Sold.
1. True
2. False
The specific identification method of inventory valuation method is normally used by businesses that sell large quantities of low cost items.
1. True
2. False
Inventories affect ?
1. only the balance sheet
2. only the income statement
3. both the balance sheet and the income statement
4. neither the balance sheet or the income statement
Using a computerized accounting system eliminates the need for strong internal controls.
1. True
2. False
The responsibility for keeping the records for an asset should be separated from the physical custody of the asset.
1. True
2. False
A business's assets need to be safeguarded from employee theft and unauthorized use.
1. True
2. False
Internal controls are only concerned with manual accounting systems.
1. True
2. False
All of the following are example of normal petty cash exenditures EXCEPT ?
1. purchase of office supplies
2. purchase of stamps
3. purchase of gas for company vehicle
4. purchase of office furniture
Monthly and quarterly time periods are called ?
1. calendar periods
2. interim periods
3. quarterly periods
4. fiscal periods
Income will always be greater using the cash basis of accounting than using the accrual basis of accounting.
1. True
2. False
The information for preparing a trial balance is obtained from ?
1. financial reports
2. general ledger accounts
3. special journals
4. subsidiary ledgers
Accountants refer to an economic event as a ?
1. transaction
2. purchase
3. sale
4. receipt of cash
The process of recording transactions has become more efficient due the the use of computers and accounting software being used.
1. True
2. False
Temporary accounts begin each new period with a ?
1. debit balance
2. credit balance
3. zero balance
4. positive balance
5. negative balance
A general ledger account that summarizes all accounts in a subsidiar ledger is called a ?
1. control account
2. detail account
3. summary account
4. contra account
Estimating the amount of uncollectible customer accounts at the end of a period is an application of the rule that matches expenses with revenues.
1. True
2. False
The standards and rules that are recognized as a general guide for financial reporting are called generally accepted accounting principles (GAAP).
1. True
2. False
Summary amounts are posted (transferred ) from the Journals to the Trial Balance.
1. True
2. False

Basic Bookkeeping-16

Quiz