Volume of Transactions - Basics of Accounting - Quiz, Exercises of Accounting

Download Volume of Transactions - Basics of Accounting - Quiz and more Exercises Accounting in PDF only on Docsity! TRUE-FALSE STATEMENTS 1. A new account is opened for each transaction entered into by a business firm. 2. The recording process becomes more efficient and informative if all transactions are recorded in one account. 3. When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers. 4. An account is often referred to as a T-account because of the way it is constructed. 5. A debit to an account indicates an increase in that account. 6. If a revenue account is credited, the revenue account is increased. 7. If an expense account is credited, the expense account is increased. 8. Debit and credit can be interpreted to mean increase and decrease, respectively. 9. The double-entry system of accounting refers to the placement of a double line at the end of a column of figures. 10. Liability accounts are increased by debits and have normal debit balances. Multiple Choice Questions 11. Which one of the following is not a part of an account? a. Credit side b. Trial balance c. Debit side d. Title 12. A T-account is a. a way of depicting the basic form of an account. b. what the computer uses to organize bytes of information. c. a special account used instead of a trial balance. d. used for accounts that have both a debit and credit balance. Docsity.com 13. Credits a. decrease both assets and liabilities. b. decrease assets and increase liabilities. c. increase both assets and liabilities. d. increase assets and decrease liabilities 14. A debit to an asset account indicates a. an error. b. a credit was made to a liability account. c. a decrease in the asset. d. an increase in the asset. 15. The normal balance of any account is the a. left side. b. right side. c. side which increases that account. d. side which decreases that account. 16. The double-entry system requires that each transaction must be recorded a. in at least two different accounts. b. in two sets of books. c. in a journal and in a ledger. d. first as a revenue and then as an expense. 17. Which of the following correctly identifies normal balances of accounts? a. Assets Debit Liabilities Credit Stockholders’ equity Credit Revenues Debit Expenses Credit b. Assets Debit Liabilities Credit Stockholders’ equity Credit Revenues Credit Expenses Credit c. Assets Credit Liabilities Debit Stockholders’ equity Debit Revenues Credit Expenses Debit d. Assets Debit Liabilities Credit Stockholders’ equity Credit Revenues Credit Expenses Debit Docsity.com