Module 2: Mastery Exercise

Questions 1-10 of 10 | Page 1 of 1

Question 1 (1 point)

In recording accounting transactions, evidence that a transaction has taken place is obtained from ______.

a	source documents
b	the Internal Revenue Service
c	the public relations department
d	the Securities and Exchange Commission

Question 2 (1 point)

The purchase of an asset for cash ______.

a	increases assets and stockholders equity
b	increases assets and liabilities
c	decreases assets and increases liabilities
d	leaves total assets unchanged

Question 3 (1 point)

Debits _____.

a	increase both assets and liabilities
b	decrease both assets and liabilities
c	increase assets and decrease liabilities
d	decrease assets and increase liabilities

Question 4 (1 point)

In its simplest form, an account consists of all of the following except _____.

a	right (credit) side
b	account title
c	left side
d	explanation column

Question 5 (1 point)

If services are rendered on account, the _____.

a	assets will decrease
b	liabilities will increase
c	stockholders equity will increase
d	liabilities will decrease

Question 6 (1 point)

Which of the following is not part of the recording process?

a	analyzing transactions
b	preparing a trial balance
c	entering transactions in a journal
d	Posting journal entries

Question 7 (1 point)

Which statement about an account is true?

a	In its simplest form, an account consists of two parts.
b	An account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders equity items.
c	There are separate account for specific assets and liabilities, but only one account for stockholders equity items.
d	The left side of an account is the credit or decrease side.

Question 8 (1 point)

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n) ______.

a	cash register sales tape
b	bill
c	advertising brochure
d	check

Question 9 (1 point)

The final step in the recording process is to _____.

a	prepare financial statements
b	analyze the transaction in terms of its effect on the accounts
c	post to a journal
d	prepare a trial balance

Question 10 (1 point)

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to ______.

a	the company's bank
b	stockholders equity
c	ledger accounts
d	financial statements