1

What is the purpose of taking off a trial balance?

Question 1 options:

a)It shows the accountant where a mistake has been made in the accounting process.

b)It is done when there is no time for an Actual Balance Sheet

c)It is a means of listing the accounts with the largest balances.

d)It is a way to check the accuracy of a ledger.

Question 2

What is another term for net income?

Question 2 options:

a)Net profit

b)Net surplus

c)Net loss

d)Net worth

Question 3

Which of the following questions is not answered by the income statement?

Question 3 options:

a)How much money was spent on advertising?

b)How much money did the firm make in its first month?

c)How much do clients owe the company?

d)How much money was spent on wages?

Question 4

A company bought equipment and paid a part of the cost in cash,

Which scenario is correct?

Question 4 options:

a)Asset debit, Asset debit, Liability debit.

b)Asset credit, Asset debit, Liability debit.

c)Asset debit, Asset credit, Revenue credit.

d)Asset credit, Asset debit, Liability credit.

Question 5

Which of the following is not considered to be a revenue account?

Question 5 options:

a)Rental revenue

b)Royalties

c)Fees earned

d)Drawings

Question 6

What is the best meaning for a chart of accounts?

Question 6 options:

a)a chart demonstrating the net income or net loss of the company.

b)a list of the ledger accounts and their numbers arranged in ledger order.

c)a chart showing the accounts affected by financial transactions.

d)a table resembling the equation analysis sheet.

Question 7

Which of the following statements is incorrect?

Question 7 options:

a)Revenues - expenses = net income, if expenses are greater than the revenues.

b)Revenues = increase in equity.

c)Drawings = decrease in equity.

d)Expenses = decrease in equity.

Question 8

Which of the following is not a date for the heading of an Income Statement?

Question 8 options:

a)on December 31^st2015.

b)for the month ending December 31^st2015.

c)for the year ending December 31^st2015.

d)for the period ending March 31^st2015.

Question 9

Which of the following statements about the journal is incorrect?

Question 9 options:

a)It provides a chronological record of business transactions.

b)It presents the financial position of the business.

c)It is the book of original entry.

d)It can be used as a reference to verify information in the ledger.

Question 10(1 point)

When an item is subject to HST, what must the seller do when recording the sale?

Question 10 options:

a)the seller need not record the tax separately.

b)debit HST Payable

c)debit HST Recoverable.

d)credit HST Payable.

Question 11(1 point)

The correct journal entry for a business remitting HST to the governmentwould be:

Question 11 options:

a)debit Tax Expense, credit HST Payable.

b)debit Tax Expense, credit Bank.

c)debit Bank, debit HST Recoverable, credit HST Payable.

d)debit HST Payable, credit HST Recoverable, credit Bank.

Question 12

A business had the following balances on the day it was to remit HST to the government: HST Recoverable $3,150; HST Payable $4,618. How much must the business remit?

Question 12 options:

a)$4 618.

b)$7 768.

c)$3 150.

d)$1 468.

Question 13

The terms "account" and "ledger" are the same and may be used interchangeably.

Question 13 options:

a) True

b) False

Question 14

Drawings are included in the income statement.

Question 14 options:

a) True

b) False

Question 15

An example of a transaction demonstrating drawings would be an owner taking equipment of the company for her/his own use.

Question 15 options:

a) True

b) False

Question 16

If revenue exceeds expenses, there will always be an increase in equity.

Question 16 options:

a) True

b) False

Question 17

If a company paid its phone bill using cash, one of the accounts affected would be a liability account.

Question 17 options:

a) True

b) False

Question 18

Equity decreases on the debit side.

Question 18 options:

a) True

b) False

Question 19(1 point)

Expenses are recorded on the credit side of the account.

Question 19 options:

a) True

b) False

Question 20

The year is only recorded on the first line of each page of the journal.

Question 20 options:

a) True

b) False

Question 21

Accounting entries are first recorded in the journal.

Question 21 options;

a) True

b) False

Question 22

In a journal entry, accounts to be debited are recorded before accounts to be credited.

Question 22 options:

a) True

b) False

Question 23

When a customer purchases an item on account, the accounting clerk for the seller will debit Accounts Receivable.

Question 23 options:

a) True

b) False

Question 24

A group or file of accounts is called a ledger.

Question 24 options:

a) True

b) False

Question 25

A ledger only keeps records for a period of one year.

Question 25 options:

a) True

b) False

Question 26

A balance sheet can be prepared from information in the ledger.

Question 26 options:

a) True

b) False

Question 27

Revenues are credited when a sale is made.

Question 27 options:

a) True

b) False

Question 28

Capital decreases on the credit side.

Question 28 options:

a) True

b) False

Question 29

Drawings are not included in the income statement.

Question 29 options:

a) True

b) False

Question 30

Drawings increase the owner's equity.

Question 30 options:

a) True

b) False