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Chapter 2: Measurement Concepts: Recording Business Transactions

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Question;16. The;normal balance of an account is the side (debit or credit) used to decrease the;account.;True False;17. The;general ledger is the basic storage unit for accounting data and is used to accumulate;amounts from similar transactions.;True False;18. One;of the general rules of the double-entry system is that total debits must;always be equal to total credits.;True False;19. Dividends;are shown on both the income statement and the statement of retained;earnings.;True False;20. Dividends;are deductions from stockholders? claims on retained earnings and are shown on;the statement of retained earnings.;True False;21. A;journal entry is a notation that records a single transaction in the;chronological accounting record known as the book of original entry.;True False;22. A;journal entry shows the date, credit account, and credit amount shown on one;line, and the debit account (indented) and debit amount shown on the next line.;True False;23. Liabilities;are established with credits and eliminated with debits.;True False;24. Generally;before Accounts Receivable is debited, it is credited.;True False;25. A;journal entry is a notation that consists of either a single debit or a single;credit that is recorded in the general ledger.;True False;26. A;compound journal entry involves at least two debit accounts and two credit;accounts.;True False;27. When;a company records the purchase of 1 month of prepaid expense the transaction;does not affect the totals of assets or liabilities and stockholders?;equity.;True False;28. In;a trial balance, all debits are listed before all credits.;True False;29. A;trial balance is normally prepared at the end of each business day.;True False;30. When;the columns of the trial balance equal each other, it is still possible that;errors may have occurred in recording and posting the transactions.;True False

 

Paper#55131 | Written in 18-Jul-2015

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