Bookkeeping Basics UPDATED Exam Questions and CORRECT Answers
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Course
Bookkeeping
Institution
Bookkeeping
Bookkeeping Basics UPDATED Exam
Questions and CORRECT Answers
What is the first step in the accounting cycle?
a) Preparing financial statements
b) Making adjustments
c) Posting transactions to the general ledger
d) Reviewing source documents and analyzing transactions - CORRECT ANSWER - d)
...
Bookkeeping Basics UPDATED Exam
Questions and CORRECT Answers
What is the first step in the accounting cycle?
a) Preparing financial statements
b) Making adjustments
c) Posting transactions to the general ledger
d) Reviewing source documents and analyzing transactions - CORRECT ANSWER - d)
Reviewing source documents and analyzing transactions
True or False: The unadjusted trial balance should be used to create financial statements. -
CORRECT ANSWER - False
What is the name of the form or statement that lists the profit or loss for a company during a
specific period?
a) The balance sheet
b) The trial balance
c) The income statement
d) The general journal - CORRECT ANSWER - c) The income statement
Lou pays $100 to advertise in his local mailer and puts the charge on his Visa credit card. Which
two accounts are involved in this transaction?
a) Visa, Equipment
b) Visa, Advertising expense
c) Visa, cash
This transaction represents a $100 increase in advertising expense as well as a $100 increase to
the Visa account.
,Lou pays $100 to advertise in his local mailer and puts the charge on his Visa credit card. To
record the journal entry, we will ____ the advertising expense account and _____ the Visa
account.
a) Credit, credit
b) Debit, credit
c) Credit, debit
d) Debit, debit - CORRECT ANSWER - b) Debit, credit
To increase it, we debit it.
Visa is a liability account. To increase it, we credit it.
Lou pays $100 to advertise in his local mailer and puts the charge on his Visa credit card. To post
a debit to the advertising expense ledger, we would record $100 on the ___ side.
a) Depends on the situation
b) Left
c) Right - CORRECT ANSWER - b) Left
Debit on the left; credit on the right.
This ledger shows all transactions impacting the cash account this week. Calculate the balance.
Cash
Debits | Credits
200
100
50
100 - CORRECT ANSWER - The balance is $150.
On the chart of accounts, which account would you find under liabilities?
a) Equipment
, b) Landscaping Income
c) Vehicle loan
d) Paid-in capital - CORRECT ANSWER - c) Vehicle loan
The vehicle loan is considered a liability. It's an obligation between one party and another not yet
completed or paid for.
True or False: Journal entries require a good understanding of debits and credits.
a) False
b) True - CORRECT ANSWER - b) True
Having a good understanding of credits and debits is vital to an accurate general journal. In most
cases, journal entries should be entered in your accounting software at the direction of an
accountant.
When would it be acceptable to use Manual Journal entries to hide or disguise certain financial
transactions?
a) Never.
b) When the owner asks you to.
c) When you need to balance the assets against the liability and equity. - CORRECT
ANSWER - a) Never.
Intentionally misrepresenting data will have an impact on financial reporting and result in legal
issues.
True or False: Journal entries should not be used during year-end adjustments.
a) False
b) True - CORRECT ANSWER - a) False
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