True False Questions

Chapter 02 – Accounting for Transactions

2-1 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 02 Accounting for Transactions

True / False Questions

[Question]

• Accounting records are also referred to as the books.

Answer: TRUE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 02-C1

Topic: Accounting Records

[Question]

• The first step in the analyzing and recording process is to analyze each transaction and

event from source documents.

Answer: TRUE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 02-C1

Topic: Source Documents

Topic: Accounting Records

Financial Accounting Fundamentals 4th Edition Wild Test Bank Visit TestBankDeal.com to get complete for all chapters

Chapter 02 – Accounting for Transactions

2-2 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

[Question]

• Preparation of a trial balance is the first step in the analyzing and recording process.

Answer: FALSE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 02-C1

Topic: Accounting Records

[Question]

• Items such as sales slips, invoices, checks, and purchase orders are source documents.

Answer: TRUE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 02-C1

Topic: Source Documents

[Question}

• An account is a record of increases and decreases in a specific asset, liability, equity,

revenue, or expense item.

Answer: TRUE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 02-C2

Topic: Account

Chapter 02 – Accounting for Transactions

2-3 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

[Question]

• According to the seller, a customer's promise to pay is called an account payable.

Answer: FALSE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 02-C2

Topic: Account Receivable

Topic: Account Payable

Topic: Account

[Question]

• Dividends are a type of business expense.

Answer: FALSE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 02-C2

Topic: Dividends

Topic: Account

[Question]

• As prepaid expenses are used up, the costs of these assets become expenses.

Answer: TRUE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 02-C2

Topic: Prepaid Expenses

Topic: Account

Chapter 02 – Accounting for Transactions

2-4 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

[Question]

• Land and buildings are generally recorded in the same ledger account.

Answer: FALSE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 02-C2

Topic: Land

Topic: Building

Topic: Account

[Question]

• It is not necessary to keep separate accounts for all items of importance for business

decisions.

Answer: FALSE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 02-C2

Topic: Account

[Question]

• Unearned revenues are classified as liabilities.

Answer: TRUE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 02-C2

Topic: Unearned Revenue