41. In a ledger, a separate "account" is maintained for each:
A. Type of asset and liability and for each element of owners' equity.
B. Business transaction.
C. Business day.
D. Journal entry.
42. In accounting, the terms
debit
and
credit
indicate, respectively:
A. Increase and decrease.
B. Left and right.
C. Decrease and increase.
D. Right and left.
43. In a ledger, debit entries cause:
A. Increases in owners' equity, decreases in liabilities, and increases in assets.
B. Decreases in liabilities, increases in assets, and decreases in owners' equity.
C. Decreases in assets, decreases in liabilities, and increases in owners' equity.
D. Decreases in assets, increases in liabilities, and increases in owners' equity.
44. Which of the following accounts normally has a credit balance?
A. Cash.
B. Service revenue.
C. Accounts receivable.
D. Utilities.
45. Which of the following is
not
true regarding the ledger account for Cash?
A. The
balance
of the account indicates the amount of cash owned by the business on a particular date.
B. Each debit entry in the Cash account represents a cash receipt.
C. Debit entries are made before credit entries.
D. Credit entries in the Cash account represent cash payments.
46. The rules of debit and credit may be summarized as follows:
A. Accounts on the left side of the balance sheet are increased by debits, whereas accounts on the right side of the balance sheet are increased by credits.
B. The balance of a ledger account is increased by debit entries and is decreased by credit entries.
C. Accounts on the left side of the balance sheet are increased by credits, whereas accounts on the right side of the balance sheet are increased by debits.
D. The balance of a ledger account is increased by credit entries and is decreased by debit entries.
47. The essential point of double-entry system of accounting is that every transaction:
A. Affects accounts on both sides of the balance sheet.
B. Is recorded in both the journal and the ledger.
C. Increases one ledger account and decreases another.
D. Affects two or more ledger accounts and is recorded by an equal dollar amount of debits and credits.
48. Double-entry accounting is characterized by which of the following?
A. Every transaction affects both an asset account and either a liability account or an owners' equity account.
B. The number of ledger accounts with debit balances is equal to the number with credit balances.
C. The total dollar amount of debit entries posted to the ledger is equal to the dollar amount of the credit entries.
D. The number of debit entries posted to the ledger equals the number of credit entries.
49. The process of originally recording a business transaction in the accounting records is termed:
A. Journalizing.
B. Footing.
C. Posting.
D. Balancing.
50. If your trial balance has a higher debit balance than credit balance, it signifies:
A. Assets are more than liabilities.
B. A profit.
C. A loss.
D. An error has been made.