Accounting True and False Questions

1. The balance sheet is also known as the statement of financial position.

Question 1 options:

	1) True
	2) False

2. The statement of cash flows discloses significant events related to the operating, investing, and financing activities of a business.

Question 2 options:

	1) True
	2) False

3. The account Wages Payable would appear on the income statement.

Question 3 options:

	1) True
	2) False

4.Independence is the avoidance of all relationships that impair or appear to impair the objectivity of the accountant.

Question 4 options:

	1) True
	2) False

5. Unearned revenues are classified as liabilities on the balance sheet.

Question 13 options:

	1) True
	2) False

6. The owners withdrawals from a partnership are shown on a statement of owners equity.

Question 14 options:

	1) True
	2) False

7. A decrease in a liability is recorded by a debit.

Question 15 options:

	1) True
	2) False

8. An increase in revenue is recorded with a credit.

Question 16 options:

	1) True
	2) False

9. A trial balance is normally prepared at the end of the day.

Question 17 options:

	1) True
	2) False

10. The journal is a chronological record of all transactions sorted by account number.

Question 18 options:

	1) True
	2) False

12. Signing an contract with a venfor that designates the price of a product and a minimum purchase level is considered a recordable transaction.

Question 19 options:

	1) True
	2) False

13. Revenue is produced and recorded only when accounts receivable are collected.

Question 25 options:

	1) True
	2) False

14. Accounting periods should be of equal length to facilitate comparisons between periods.

Question 26 options:

	1) True
	2) False

15. A contra account is an account whose balance is the opposite of its related (or partner) account.

Question 27 options:

	1) True
	2) False

16. The carrying value of equipment is the estimated dollar amount the equipment could be sold for.Question 28 options:

	1) True
	2) False

17. Closing entries result in the transfer of net income or loss into the owners Capital account or retained earnings (depending on the structure of the company).

Question 34 options:

	1) True
	2) False