Quiz 1 questions

Question 1

A calendar year is based on the months of:

Answer 1

Jan 1 to Dec 31

Question 2

The normal financial procedures that take place over a period of time are known as:

Answer 2

Accounting Cycle

Question 3

True or False
When journalizing a transaction, the credit is recorded first.

Answer 3

False

Question 4

The accounting cycle takes place in a period of time called the

Answer 4

Accounting Period

Question 5

What separates each transaction recorded in the journal?

Answer 5

One line space

Question 6

When we transfer the transaction from the journal to the ledger the activity is called_____.

Answer 6

Posting

Question 7

In the ledger, how we are able to determine the balance of an account?

Answer 7

By adding the debits and credits and determining the difference between the two.

Question 8

The list of the individual accounts with their balances taken from the ledger to the worksheet is referred to as
the ________________.

Answer 8

Trial Balance

Question 9

True or False
In the Trial Balance, debits and credits do not have to be equal.

Answer 9

False

Question 10

True or False
To make a correction before posting simply draw a line through the incorrect entry, write the correct information above the line and place your initials near the change.

Answer 10

True

Question 11

True or False
To make a correction after posting, draw a line through the error and write the correct figure above it. Change the running balance to reflect the corrected posting.

Answer 11

True

Question 12

A business transaction occurs and generates a document in what step of the accounting cycle?

Answer 12

Step 1

Question 13

Analyzing and recording business transactions into a journal occurs in what step of the accounting cycle?

Answer 13

Step 2

Question 14

In step four of the accounting cycle a(n) _________________ is prepared.

Answer 14

Trial Balance

Question 15

Which of the following is not a part of the worksheet?

Answer 15

Statement of Owner’s Equity

Question 16

True or False
Adjustments from the worksheet are journalized in the same journal as step 2.

Answer 16

True

Question 17

True or False
Financial statements are not prepared from the worksheet.

Answer 17

False

Question 18

Which of the following are not included on the balance sheet section of the worksheet?

Answer 18

Expenses

Question 19

True or False
The Income Statement only includes assets and liabilities.

Answer 19

False

Question 20

True or False
The balance sheet section totals on the worksheet do not match the formal balance sheet.

Answer 20

False

Question 21

The correct formula for the straight-line method of depreciation consists of:

Answer 21

Cost of equipment – Residual value / Estimated years of depreciation

Question 22

The Formal Income Statement lists the following two account categories:

Answer 22

Revenue and expenses

Question 23

When accumulated depreciation is ___________ from equipment, the balance of the equipment is then __________.

Answer 23

Subtracted – decreased

Question 24

Withdrawals from the Owner’s Equity account:

Answer 24

Reduce the balance

Question 25

Journalizing and posting adjusting entries occurs in step _________.

Answer 25

Step 7

Question 26

Step 8 in the accounting cycle consists of:

Answer 26

Journalizing and posting closing entries

Question 27

Preparing a post-closing trial balance occurs in step ________.

Answer 27

9

Question 28

The Post Closing Trial Balance lists only ___________ accounts in the ledger and their balances after adjusting and closing entries have been posted.

Answer 28

Permanent (real)

Question 29

When the closing process is complete, the accounting equation will be reduced to:

Answer 29

A = L + Ending Capital

Question 30

True or False:
An accounting period is based on the balance sheet.

Answer 30

False