Multiple Choice Questions
34.The sequence of accounting procedures used to record, classify, and summarize accounting information is called the:
A. Accounting cycle.
B. Accounting period.
C. Accrual accounting.
D. Double-entry bookkeeping.
35.Which of the following is
not
a step in the accounting cycle?
A. Prepare a trial balance.
B. Prepare a purchase order.
C. Prepare financial statements.
D. Prepare an adjusted trial balance.
36.Steps in the accounting cycle include (1) prepare financial statements, (2) post each journal entry to the appropriate ledger account, and (3) journalize transactions. Which of the following reflects the correct order of these steps?
A. (1), (2), (3).
B. (3), (2), (1).
C. (2), (1), (3).
D. (3), (1), (2).
37.The accounting cycle begins with the
A. Posting of journal entries to ledger accounts.
B. Formation of a business.
C. Initial recording of business transactions.
D. Preparation of a trial balance.
38.In the general 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.
39.Which of the following is
not
true regarding the general 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.
40.The cash account of Grande Home Improvement Store shows the following: a debit on June 1 for $25,000; a credit on June 5 for $10,000, a debit on June 16 for $14,000, and a credit on June 27 for $8,000. What is the balance in the cash account at the end of June?
A. $39,000 debit.
B. $21,000 debit.
C. $18,000 credit.
D. $21,000 credit.
41.The purchase of equipment on credit is recorded by a:
A. Debit to Equipment and a credit to Accounts Payable.
B. Debit to Accounts Payable and a credit to Equipment.
C. Debit to Equipment and a debit to Accounts Payable.
D. Credit to Equipment and a credit to Accounts Payable.
42.The collection of accounts receivable is recorded by a:
A. Debit to Cash and a debit to Accounts Receivable.
B. Credit to Cash and a credit to Accounts Receivable.
C. Debit to Cash and a credit to Accounts Receivable.
D. Credit to Cash and a debit to Accounts Receivable.
43.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.