1. A voucher system is used in connection with transactions that involve only

a. the receipt of cash
b. the payment of cash
c. the purchase and sale of merchandise
d. revenue and expense

2. It is the business paper which a company makes for every cash payment

a. check
b. voucher
c. journal
d. official receipt

3. all vouchers are recorded in numerical sequence in the

a. check register
b. voucher register
c. general journal
d. cash disbursements journal

4. After voucher are recorded, they are filed in an unpaid vouchers file

a. numerically
b. in the order of payment
c. chronologically
d. no regular order

5. Which of the following statements is not correct? A file of unpaid vouchers

a. may be used to replace the accounts payable subsidiary ledger
b. is controlled by the vouchers payable account in the general ledger
c. shows during the year the total amount of all recorded outstanding liabilities for goods and services
d. shows only the total amount of outstanding liabilities for merchandise purchased


Answer:
1b.
2.b
3.b
4.b
5.d

1. In recording transactions

a. the word debit means increase and the word credit means decrease
b. assets, expenses, and drawing accounts are debited for increases
c. liabilities, revenue, and drawing accounts are debited for increases
d. assets, expenses, and capital accounts are debited for increases

2. Which is false concerning the rules of debit and credit

a. the left side of an account is always the debit side and the right side is always the credit side
b. increases in assets and expenses are debit entries, and increases in liabilities, equity and revenue are credit entries.
c. the normal balance of any account appears on the side for recording increases
d. the word debit means to increase and the word credit means to decrease

3. Debits

a. increases assets and decrease expenses , liabilities, revenue, and equity
b. increase assets and expenses and decrease liabilities, revenue and equity
c. increase assets and equity and decrease liabilities, expenses and revenue
d. decrease assets and expenses and increase liabilities , revenue, and equity

4. In accrual accounting system

a. all accounts have normal debit balances
b. a debit entry is recorded on the left-hand side of an account
c. liabilities, share capital, and dividends all have normal credit balances
d. revenues are recorded only when cash is received

5. Which of the following is not considered a book of original entry

a. general journal
b. general ledger
c. sales journal
d. purchases journal

6. A simple journal entry

a. consists of one debit and one credit
b. consists of two debits and one credit
c. consists of one debit and two credits
d. is a memorandum entry

7. A journal entry that contains more than two accounts is called

a. a posted journal entry
b. an adjusting journal entry
c. an erroneous journal entry
d. a compound journal entry

8. What function do accounting journals serve in the accounting process

a. recording
b. classifying
c. summarizing
d. reporting

9. Which of the following is correct

a. retained earnings account normally has a debit balance
b. retained earnings account normally has a credit balance
c. retained earnings account is closed at the end of the fiscal year
d. retained earnings account is a nominal account

10. Which of the following accounts would be increased by a debit

a. share capital
b. notes payable
c. accounts payable
d. dividends

Answer:
1.b
2.d
3.b
4.b
5.b
6.a
7.d
8.a
9.b
10.d


1.  Which is falls concerning use of special journal

a. only sales of merchandise on account are recorded in the sales journal. Cash sales are recorded in the cash receipts journal
b. Purchases on any items on account are recorded in the purchases journal. Acquisitions of any items for cash are recorded in the cash disbursements journal
c. transactions that cannot be appropriately recorded in a special journal are recorded in the general journal
d. only cash purchases are recorded in the cash disbursements journal

2. If a firm uses special journal, in which journal would the sale of merchandise for cash be recorded

a. sales journal
b. cash receipts journal
c. general journal
d. cash disbursements journal

3. A firm that uses special journals acquired merchandise by giving a note payable. In which journal would transaction be recorded

a. invoice register
b. sales journal
c. general journal
d. cash disbursements journal

4. When special journals are used, which of the following is true

a. a general journal is used
b. all sales receipts should be recorded in the cash receipts journal
c. all cash receipts should be recorded in the cash receipts journal
d. all purchase transactions should be recorded in the purchase journal

5. When special journals are used, adjusting and closing entries are generally recorded in the

a. cash disbursements journal
b. cash receipts journal
c. general journal
d. purchases journal

Answer:
a.d
2.b
3.c
4.c
5.c

1. Revenue from sale of goods shall be recognized when all of the following conditions have been satisfied, except

a. the entity has transferred to the buyer the significant risks and rewards of ownership of the goods.
b. the entity retains either continuing managerial involvement of effective control the goods sold.
c. the amount of revenue can be measured reliably
d. it is probable that economic benefits will flow to the entity

2. Which is incorrect concerning recognition of revenue?

a. revenue from rendering of services shall be recognized by reference to the stage of completion of the transaction at balance sheet date.
b. interest revenue shall be recognized on a time proportion basis that does not take into account the proportion basis that does not take into account the effective yield on the asset
c. royalty revenue shall be recognized on an accrual basis in accordance with the substance of the relevant agreement.
d. dividend revenue shall be recognized when the shareholder's right to receive payment is established.

3. Which definition is correct relating to elements of financial performance?

a. gains are increases in equity from ongoing major or central operations of an entity
b. expenses are outflows of assets or liabilities incurred from peripheral or incidental transactions of an entity
c. revenues are inflows or other enhancements of assets or settlements of liabilities from ongoing major or central operations.
d. losses are all decreases in equity other than from transactions with owners.

4. According to conceptual framework, the term "income"

a. includes change in market value of investments in marketable securities classified as available for sale
b. includes foreign currency translation adjustment
c. includes gain resulting from the sale of a productive asset to another party in an arm's length transaction
d. is the same as comprehensive income

5. The revenue principle states that revenue shall be recognized at a point when

a. an exchange transaction involving goods and services has occurred and the earnings process is essentially complete
b. an order for shipment of a definite amount of merchandise has been received
c. a contract between buyer and seller has been signed by both parties
d. the seller has shipped merchandise to a customer under the terms that the customer need not pay for the merchandise until it is sold

6.What is an example of an accounting principle

a. the fact that one type of accounting is designed to help managers identify, measure and control operating costs
b. the definition of when income is to be recognized
c. the fact that business transactions involve a completed exchange of economic transactions
d. the definition of assets minus liabilities equals shareholders' equity

7. Normally, revenue is recognized

a. when the customer's order is received
b. when the customer's order is accompanied by a check
c. only if the transaction will create an account receivable
d. when the title to the goods changes

8. Depending on the nature of the entity, revenue may be recognized based on different acceptable  criteria. Which of the following is not an acceptable basis for recognition of revenue?

a. passage of time
b. performance of service
c. completion of percentage of a projects
d. upon signing of contract

9. Generally, recognition criteria  are met and revenue is recognized

a. at the point of sale
b. when cause and effect are associated
c. at the point of cash collection
d. at the appropriate points throughout the operating cycle

10. Which of the following best describes the conditions that must be present for the recognition of revenue?

a. the revenue must be earned, measurable and collected
b. the revenue must be earned, measurable and collectible
c. the revenue must be earned and collectible
d. the revenue must be measurable and collectible
 

Answer:
1.b
2.b
3.c
4.c
5.a
6.b
7.d
8.d
9.a
10.b