True/False
Indicate whether the sentence or statement is true
or false.
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1.
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Recording transactions in a journal is journalizing.
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2.
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A
transaction recorded in a journal is not considered a permanent record.
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3.
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Information for each transaction recorded in a journal is an entry.
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4.
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When
services are sold on account, the accounts receivable account is decreased.
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5.
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Transactions are recorded in a journal in chronological order.
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6.
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Double-entry accounting assures that debits equal credits.
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7.
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Each
transaction is described by a source document that proves that the transaction did
occur.
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8.
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A
check is a business form ordering a bank to pay cash from a bank account.
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9.
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The
source document for cash payments is a check.
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10.
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A
calculator tape is the source document for daily cash sales transactions.
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11.
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A
business form giving written acknowledgement for cash received is a receipt.
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12.
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A
receipt is the source document for cash received from transactions other than sales.
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13.
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The
kind of journal a business uses depends on the type of industry the business is in.
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14.
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Before a transaction is recorded in a general journal, it is analyzed into its debit
and credit parts.
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15.
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The
year and the month are written only once on a general journal page.
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16.
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The
day of the month is written on each general journal page only for the first entry.
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17.
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The
title of the account debited in a general journal entry is indented.
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18.
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Debits must equal credits for each entry in a general journal.
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19.
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The
source document number is a cross reference from the journal to the source document.
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20.
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When
there is only one blank line remaining at the bottom of a general journal page, the debit part of the
next entry is journalized on the one blank line and the remainder of the entry is journalized on the
next journal page.
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21.
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Transactions are recorded in a journal in one place and in order by
date.
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22.
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For
each transaction in a journal, both debit and credit parts are recorded.
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23.
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Examples of source documents include checks, sales invoices, memorandums, and
letters.
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24.
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The
source document for cash payments is a sales invoice.
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25.
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The
Objective Evidence accounting concept requires that there be proof that a transaction did
occur.
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26.
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A
calculator tape is not the source document for daily sales.
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27.
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A
check is an example of a source document when items are paid in cash.
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28.
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Journal entries have three parts: date, debit part, and credit part.
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29.
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The
abbreviation for the source document sales invoice is SI.
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30.
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The
source document used when supplies are bought on account is a memorandum.
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31.
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The
source document used when supplies bought on account are paid for is a check.
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32.
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The
abbreviation for the source document calculator tape is CT.
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33.
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Decreases in the owner's capital account are recorded as credits.
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34.
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Businesses usually wait until the end of a week to journalize the week's
transactions.
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35.
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The
year is written only once on a general journal page.
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36.
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The
month is written for each transaction on a general journal page.
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37.
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A
general journal page is complete when there is insufficient space to record any more
entries.
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38.
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Each
general journal entry requires at least two lines.
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39.
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In
correcting an error in accounting work, simply draw a line through the incorrect item and write the
correct item above the canceled item.
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40.
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Dollars and cents signs and decimal points are not used when writing amounts on ruled
accounting pages.
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Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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41.
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The
recording of debit and credit parts of a transaction is ____. a. | double-entry
accounting | c. | accounting | b. | single-entry accounting | d. | none of the above | | | | |
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42.
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Preparing a source document for each transaction is an application of the accounting
concept ____. a. | Business
Entity | c. | Objective
Evidence | b. | Unit of Measurement | d. | Going Concern | | | | |
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43.
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A
business form ordering a bank to pay cash from a bank account is ____. a. | a
check | c. | a
receipt | b. | a memorandum | d. | all of the above | | | | |
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44.
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A
general journal entry includes ____. a. | the debit and credit parts of a
transaction | b. | the date, debit, and credit parts of a
transaction | c. | the date, debit, credit, and source
document | d. | none of the above | | |
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45.
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On
each general journal page, the year is written ____. a. | for each
entry | c. | only for the
first entry | b. | on the first line of each
column | d. | none of the
above | | | | |
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46.
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On
each general journal page, the month is written ____. a. | for each
entry | c. | only for the
first entry | b. | on the first line of each
column | d. | none of the
above | | | | |
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47.
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The
entry to record receipt of cash from the owner as an investment is ____. a. | debit Capital,
credit Cash | c. | debit Cash,
credit Accounts Payable | b. | debit Cash, credit Capital | d. | none of the above | | | | |
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48.
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The
account debited when cash is paid for supplies is ____. a. | Supplies | c. | Supplies
Expense | b. | Cash | d. | none of the above | | | | |
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49.
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When
cash is paid for insurance, ____. a. | the prepaid insurance account is
decreased | b. | the prepaid insurance account is
credited | c. | the balance of the prepaid insurance account is
increased | d. | none of the above | | |
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50.
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When
supplies are bought on account, the account debited is ____. a. | Cash | c. | Capital | b. | Supplies | d. | none of the above | | | | |
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51.
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The
source document for a payment of cash for the electric bill is ____. a. | a
receipt | c. | a
memorandum | b. | a check | d. | all of the above | | | | |
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52.
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If
there is only one blank line remaining on a journal page, ____. a. | the next journal
entry is split | c. | a new page is
started | b. | a new account is opened | d. | none of the above | | | | |
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53.
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If an
error is discovered in a general journal entry, ____. a. | cancel the error
by drawing a neat line through the error | b. | correct the entry by writing the correct item above the
canceled error | c. | do not erase the incorrect item | d. | all of the
above | | |
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54.
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Words
in accounting are ____. a. | written in full when space
permits | c. | printed rather
than written | b. | abbreviated wherever possible | d. | none of the above | | | | |
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55.
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Dollar and cents signs and decimal points are ____. a. | used when
writing amounts on ruled accounting paper | b. | not used when writing amounts on ruled accounting
paper | c. | used when recording amounts in a general
journal | d. | all of the above | | |
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