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Chapter 02 – Analyzing and Recording Transactions
2-1 Chapter 02 Analyzing and Recording Transactions
True / False Questions
[Question]
- Accounting records are also referred to as the books.
Answer: TRUE
Bloom’s Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C1
[Question]
- The first step in the analyzing and recording process is to analyze each transaction and
event from source documents.
Answer: TRUE
Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C1
Financial Accounting Information for Decisions 6th Edition Wild Visit TestBankDeal.com to get complete for all chapters
Chapter 02 – Analyzing and Recording Transactions
2-2 [Question]
- Preparation of a trial balance is the first step in the analyzing and recording process.
Answer: FALSE
Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C1
[Question]
- Source documents provide evidence of business transactions and are the basis for
accounting entries.
Answer: TRUE
Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C2
[Question]
- Items such as sales slips, invoices, checks and purchase orders are source documents.
Answer: TRUE
Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C2
Chapter 02 – Analyzing and Recording Transactions
2-3 [Question}
- An account is a record of increases and decreases in a specific asset, liability, equity,
revenue or expense item.
Answer: TRUE
Bloom’s Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C2
[Question]
- According to the seller, a customer's promise to pay is called an account payable.
Answer: FALSE
Bloom’s Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C2
[Question]
- Dividends are a type of business expense.
Answer: FALSE
Bloom’s Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C2
Chapter 02 – Analyzing and Recording Transactions
2-4 [Question]
- As prepaid expenses are used up, the costs of these assets become expenses.
Answer: TRUE
Bloom’s Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
[Question]
- Land and buildings are generally recorded in the same ledger account.
Answer: FALSE
Bloom’s Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
[Question]
- It is not necessary to keep separate accounts for all items of importance for business
decisions.
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