.png){kind=logo}
Copyright © 2018 McGraw-Hill Education. All rights reserved.No reproduction or distribution without the prior written consent of McGraw-Hill Education 2-1 Chapter 2
ACCOUNTING FOR BUSINESS TRANSACTIONS
True /False Questions 1.The first step in the processing of a transaction is to analyze the transaction and source documents.
Answer: True
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Analyzing and Recording Process
2.Preparation of a trial balance is the first step in processing a financial transaction.
Answer: False
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Analyzing and Recording Process
3.Source documents identify and describe transactions and events entering the accounting process.
Answer: True
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Analyzing and Recording Process
Financial Accounting Fundamentals 6th Edition Wild Test Bank Visit TestBankDeal.com to get complete for all chapters
Copyright © 2018 McGraw-Hill Education. All rights reserved.No reproduction or distribution without the prior written consent of McGraw-Hill Education 2-2 4.Items such as sales tickets, bank statements, checks, and purchase orders are examples of a business’s source documents.
Answer: True
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Analyzing and Recording Process
5.An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.
Answer: True
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C2
Topic: The Account and Its Analysis
6.A customer’s promise to pay on credit is classified as an account payable by the seller.
Answer: False
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C2
Topic: The Account and Its Analysis
7.Dividends paid to stockholders are a business expense.
Answer: False
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C2
Topic: The Account and Its Analysis
Copyright © 2018 McGraw-Hill Education. All rights reserved.No reproduction or distribution without the prior written consent of McGraw-Hill Education 2-3 8.The purchase of land and buildings will generally be recorded in the same ledger account.
Answer: False
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C2
Topic: The Account and Its Analysis
9.Unearned revenues are classified as liabilities.
Answer: True
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C2
Topic: The Account and Its Analysis
10.Dividends distributed to stockholders should be treated as an expense of the business.
Answer: False
Blooms: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty: 1 Easy
Learning Objective: 02-C2
Topic: The Account and Its Analysis
11.When a company provides services for which cash will not be received until some future date, the company should record the amount billed as accounts receivable.
Answer: True
Blooms: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty:2 Medium
Learning Objective: 02-C2
Topic: The Account and Its Analysis
Copyright © 2018 McGraw-Hill Education. All rights reserved.No reproduction or distribution without the prior written consent of McGraw-Hill Education 2-4 12.Dividends always decrease equity.
Answer: True
Blooms: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty:2 Medium
Learning Objective: 02-C2
Topic: The Account and Its Analysis
13.Expenses always decrease equity.
Answer: True
Blooms: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty:2 Medium
Learning Objective: 02-C2
Topic: The Account and Its Analysis
14.Revenues always increase equity.
Answer: True
Blooms: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Decision Making
Difficulty:2 Medium
Learning Objective: 02-C2
Topic: The Account and Its Analysis
15.Stockholder investments always decrease equity.
.png)