When financial records for a business and for its owner's personal belongings are not mixed,
this is an application of the Business Entity accounting concept. - correct answer True
The capital account is an owner's equity account. - correct answer True
An accounting device used to analyze transactions is a T account. - correct answer True
When cash is paid for supplies, the supplies account is increased by a debit. - correct answer
True
Increases in expense accounts are recorded as debits because they decrease the owner's capital
accounts. - correct answer True
Increases in revenue accounts are recorded as debits because they increase the owner's capital
accounts. - correct answer False. Increases in revenue accounts are recorded as credits.
Accounts payable accounts are increased with a debit. - correct answer False. Accounts
payable accounts are increased with a credit because they are liabilities.
Increases in drawing accounts are recorded as credits. - correct answer False. Increases in
drawing accounts are recorded as debits.
Examples of source documents include: checks, sales invoices, memorandums, and letters. -
correct answer False. Source documents include: check, invoice, sales invoice, receipt,
memorandum
Source document ordering bank to pay cash from a bank account. - correct answer Check
Source document that describes goods or services sold, quantity, and price. - correct answer
Invoice
Source document used to record a sale on account. - correct answer Sales Invoice
Source document giving written acknowledgement for cash received. - correct answer Receipt
Source document on which a brief message is written describing a transaction. - correct
answer Memorandum
A transaction recorded in a journal is not considered a permanent record. - correct answer
False. A transaction recorded in a journal is considered a permanent record.
A journal amount column headed with an account title is a special amount column. - correct
answer True
The procedure of arranging accounts in a general ledger, assigning account numbers, and
keeping current records is posting. - correct answer False. It is file maintenance.
The day of the month is written on each journal page only for the first entry. - correct answer
False. It is written for every entry.
, Accounting Final Exam Review Questions & Answers
A journal page is proved by verifying that the total debits equals the total credits. - correct
answer True
Posting is transferring information from a journal entry to a ledger account. - correct answer
True
If the previous account balance and the current entry posted to an account are both debits, the
new account balance is a debit. - correct answer True.
The total of the General Credit column is not posted. - correct answer True
A ledger that contains all accounts needed to prepare financial statements is a general ledger. -
correct answer True
Separate amounts in general amount columns are not posted individually. - correct answer
False. Separate amounts in general amount columns are posted individually.
The posting reference should always be recorded in the journal's "Post Ref." column before
accounts are recorded in the ledger. - correct answer False. The posting reference should
always be recorded in the journal's "Post Ref." column after accounts are recorded in the
ledger.
A check mark in parentheses below a General Debit column total indicates that the total is not
posted. - correct answer True
With the exception of the totals lines, the "Post. Ref." column is completely filled in with either
an account number or a check mark. - correct answer True
Ownership of a check cannot be transferred. - correct answer False. It can be transferred.
When a bank statement is received, the depositor should verify its accuracy immediately. -
correct answer True
The petty cash fund is a liability with a normal debit balance. - correct answer False. The petty
cash fund is an asset.
When writing a check, the first step is to prepare the check stub. - correct answer True
A bank requires that the signature of the person authorized to sign checks be on the signature
card. - correct answer True
Many businesses choose a one-year fiscal period that ends during a period of high business
activity. - correct answer False. Many businesses choose a one-year fiscal period that ends
during a period of low business activity.
The column in which an account balance is recorded on a trial balance shows whether the
account has a debit or credit balance. - correct answer True
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