©CambridgenBusinessnPublishers,n2020n
TestnBank,nChaptern2n
2-1n
Chaptern2n
n
ProcessingnAccountingnInformationn
n
LearningnObjectivesn– nCoveragenbynquestionn
n
Truen/nFalsen
MultiplenChoicen
Exercisesn
Problemsn
LO1n– nIdentify nthenfivenmajorn
stepsninnthenaccountingn
cycle.n
1-6n
1-4n
1,n2n
n
LO2n– nAnalyzenandnrecordn
transactionsnusingnthen
accountingnequation.n
7-11,n24n
5-14,n
56-127n
3,n4n
n
LO3n– nExplainnthennature,n
format,nandnpurposenof nann
account.n
12,n20,n21,n32n
15,n35,n48,nn
128-157n
4n
1n
LO4n– nDescribenthensystem n
of ndebitsnandncreditsnandnitsn
useninnrecordingn
transactions.nnn
13-19n
16-22n
5n
1n
LO5n– nExplainnthenprocessnofn
journalizingnandnpostingn
,transactions.n
22,n23,n
25-31,n
33-36n
23-34,n
36-47,n
49,n50n
5-7n
1-3n
LO6n– nDescribenthentrialn
balance.n
37-39n
51-55,nn
158-165n
n
4n
n
n
n
n
DOWNLOADnTHEnTestnBanknfornFinancialnAccountingnfornUndergraduatesn4th
nnnnnnnnnnnnnnnnnnnnnnnnnnn EditionnWallace
mynursytest.store
©CambridgenBusinessnPublishers,n2020n
2-2n
FinancialnAccountingnfornUndergraduates,n4thnEditionn
Chaptern2:nProcessingnAccountingnInformationn
n
n
Truen/nFalsen
n
Topic:nAccountingnCyclen
LO:n1n
1.nThenfirstnstepninnthenaccountingncyclenisntonrecordntransactionsninnanjournal.n
n
Answer:nFalsen
Rationale:nThenfirstnstepninnthenaccountingncyclenisntonanalyzentransactionsnfromnsourcendocu
ments.n
n
n
Topic:nAccountingnCyclen
LO:n1n
2.nThenfirstnstepninnthenaccountingncyclenisntonanalyzentransactionsnfrom nsourcendocuments.n
n
Answer:nTruen
Rationale:nTherenarenfivenmajornstepsninnthenaccountingncycle.nInnorder,nthey nare:n1)nAnalyzen
-nanalyzen
transactionsnfornsourcendocuments,n2)nRecordn-
njournalizentransactionsnandnpreparennunadjustedntrailn
balance,n3)nAdjustn–
,njournalizenadjustingnentriesnandnpreparenadjustedntrialnbalance,n4)nReportn– n
preparenfinancialnstatements,nandn5)nClosen– njournalizenclosingnentriesnandnpreparenpost-
closingntrialn
balance.n
n
n
Topic:nAccountingnCyclen
LO:n1n
3.nThenfirstnfivenstepsninnthenaccountingncyclenoccurnwithnequalnfrequency.n
n
Answer:nFalsen
Rationale:nThenfivenstepsninnthenaccountingncyclendonnotnoccurnwithnequalnfrequency.n
n
n
Topic:nAccountingnCyclen
LO:n1n
4.nThenaccountingncyclenstepnthatnoccursnmostnfrequently nisntonadjustnthengeneralnledgernacc
ounts.n
n
Answer:nFalsen
Rationale:nAnbusinessnanalyzesnandnrecordsnfinancialntransactionsndaily nduringnthenaccounti
ngnperiod,n
butnadjustsngeneralnledgernaccountsnlessnfrequently.n
n
n
Topic:nFiscalnYearn
LO:n1n
5.nAncompany’snfiscalnyearncannotncoincidenwithnthencalendarnyear.n
n
Answer:nFalsen
Rationale:nAncompany’snfiscalnyearnoftenncoincidesnwithnthencalendarnyear,nbutnitnneednnot.n
n
n
n
n
DOWNLOADnTHEnTestnBanknfornFinancialnAccountingnfornUndergraduatesn4th
nnnnnnnnnnnnnnnnnnnnnnnnnnn EditionnWallace
mynursytest.store
©CambridgenBusinessnPublishers,n2020n
TestnBank,nChaptern2n
2-3n
Topic:nFiscalnYearn
LO:n1n
6.nnAllncompaniesnhavenanfiscalnyearnendingnonnDecembern31.nnn
n
Answer:nFalsen
Rationale:nOnly naboutn60%nof ncompaniesnhavenfiscalnyearnendsnthatncorrespondntonthencalen
darnyearn
end.n
n
n
Topic:nTransactionnAnalysisn
, LO:n2n
7.nIf nNathan,nInc.npurchasednequipmentnonncreditnfromnJohnnCompany,nthennthentransactionn
recordednbyn
Nathannwouldnincludenannincreaseninnanliability nandnannincreaseninnasset.n
n
Answer:nTruen
Rationale:nThentransactionnrecordednby nNathannwouldnincludenannincreasentonannassetn(equi
pment)n
andnannincreasentonanliability n(accountsnpayable).nnnn
n
n
Topic:nDeferrednRevenuen
LO:n2n
8.nnDeferrednrevenuenandnunearnednrevenuenbothnreferntoncashnthatnhasnbeennreceivednbutnn
otnyetn
earned.n
n
Answer:nTruen
Rationale:nBothnunearnednrevenuenandndeferrednrevenuenreferntonfeesnreceivednbeforenservi
cesnaren
performedntonearnnthosenfees.n
n
n
Topic:nThenDouble-Entry nAccountingnSystem n
LO:n2n
9.nUndernthendouble-
entry naccountingnsystem,nnonmorenthanntwonaccountsncannbenaffectednbyneachn
transaction.n
n
Answer:nFalsen
Rationale:nEachntransactionnrecordednundernthendouble-
entry naccountingnsystem nmustnaffectnatnleastn
twonaccounts.nnItncannaffectnmorenthanntwo.n
n
n
Topic:nAnalyzingnTransactionsn
LO:n2n
10.nWhennanfirm npurchasesnequipmentnforncash,nbothnassetsnandnstockholders’nequity nincrea
se.n
n
Answer:nFalsen
Rationale:nThenassetnequipmentnwillnincrease,nandnthenassetncashnwillndecrease,nwithnnoneffe
ctnonn
stockholders’nequity.n
n
n
Topic:nTransactionnAnalysisn
LO:n2n
11.nWhennmoneynisnborrowed,nbothnannassetnaccountnandnanrevenuenaccountnarenincreased.n
n
TestnBank,nChaptern2n
2-1n
Chaptern2n
n
ProcessingnAccountingnInformationn
n
LearningnObjectivesn– nCoveragenbynquestionn
n
Truen/nFalsen
MultiplenChoicen
Exercisesn
Problemsn
LO1n– nIdentify nthenfivenmajorn
stepsninnthenaccountingn
cycle.n
1-6n
1-4n
1,n2n
n
LO2n– nAnalyzenandnrecordn
transactionsnusingnthen
accountingnequation.n
7-11,n24n
5-14,n
56-127n
3,n4n
n
LO3n– nExplainnthennature,n
format,nandnpurposenof nann
account.n
12,n20,n21,n32n
15,n35,n48,nn
128-157n
4n
1n
LO4n– nDescribenthensystem n
of ndebitsnandncreditsnandnitsn
useninnrecordingn
transactions.nnn
13-19n
16-22n
5n
1n
LO5n– nExplainnthenprocessnofn
journalizingnandnpostingn
,transactions.n
22,n23,n
25-31,n
33-36n
23-34,n
36-47,n
49,n50n
5-7n
1-3n
LO6n– nDescribenthentrialn
balance.n
37-39n
51-55,nn
158-165n
n
4n
n
n
n
n
DOWNLOADnTHEnTestnBanknfornFinancialnAccountingnfornUndergraduatesn4th
nnnnnnnnnnnnnnnnnnnnnnnnnnn EditionnWallace
mynursytest.store
©CambridgenBusinessnPublishers,n2020n
2-2n
FinancialnAccountingnfornUndergraduates,n4thnEditionn
Chaptern2:nProcessingnAccountingnInformationn
n
n
Truen/nFalsen
n
Topic:nAccountingnCyclen
LO:n1n
1.nThenfirstnstepninnthenaccountingncyclenisntonrecordntransactionsninnanjournal.n
n
Answer:nFalsen
Rationale:nThenfirstnstepninnthenaccountingncyclenisntonanalyzentransactionsnfromnsourcendocu
ments.n
n
n
Topic:nAccountingnCyclen
LO:n1n
2.nThenfirstnstepninnthenaccountingncyclenisntonanalyzentransactionsnfrom nsourcendocuments.n
n
Answer:nTruen
Rationale:nTherenarenfivenmajornstepsninnthenaccountingncycle.nInnorder,nthey nare:n1)nAnalyzen
-nanalyzen
transactionsnfornsourcendocuments,n2)nRecordn-
njournalizentransactionsnandnpreparennunadjustedntrailn
balance,n3)nAdjustn–
,njournalizenadjustingnentriesnandnpreparenadjustedntrialnbalance,n4)nReportn– n
preparenfinancialnstatements,nandn5)nClosen– njournalizenclosingnentriesnandnpreparenpost-
closingntrialn
balance.n
n
n
Topic:nAccountingnCyclen
LO:n1n
3.nThenfirstnfivenstepsninnthenaccountingncyclenoccurnwithnequalnfrequency.n
n
Answer:nFalsen
Rationale:nThenfivenstepsninnthenaccountingncyclendonnotnoccurnwithnequalnfrequency.n
n
n
Topic:nAccountingnCyclen
LO:n1n
4.nThenaccountingncyclenstepnthatnoccursnmostnfrequently nisntonadjustnthengeneralnledgernacc
ounts.n
n
Answer:nFalsen
Rationale:nAnbusinessnanalyzesnandnrecordsnfinancialntransactionsndaily nduringnthenaccounti
ngnperiod,n
butnadjustsngeneralnledgernaccountsnlessnfrequently.n
n
n
Topic:nFiscalnYearn
LO:n1n
5.nAncompany’snfiscalnyearncannotncoincidenwithnthencalendarnyear.n
n
Answer:nFalsen
Rationale:nAncompany’snfiscalnyearnoftenncoincidesnwithnthencalendarnyear,nbutnitnneednnot.n
n
n
n
n
DOWNLOADnTHEnTestnBanknfornFinancialnAccountingnfornUndergraduatesn4th
nnnnnnnnnnnnnnnnnnnnnnnnnnn EditionnWallace
mynursytest.store
©CambridgenBusinessnPublishers,n2020n
TestnBank,nChaptern2n
2-3n
Topic:nFiscalnYearn
LO:n1n
6.nnAllncompaniesnhavenanfiscalnyearnendingnonnDecembern31.nnn
n
Answer:nFalsen
Rationale:nOnly naboutn60%nof ncompaniesnhavenfiscalnyearnendsnthatncorrespondntonthencalen
darnyearn
end.n
n
n
Topic:nTransactionnAnalysisn
, LO:n2n
7.nIf nNathan,nInc.npurchasednequipmentnonncreditnfromnJohnnCompany,nthennthentransactionn
recordednbyn
Nathannwouldnincludenannincreaseninnanliability nandnannincreaseninnasset.n
n
Answer:nTruen
Rationale:nThentransactionnrecordednby nNathannwouldnincludenannincreasentonannassetn(equi
pment)n
andnannincreasentonanliability n(accountsnpayable).nnnn
n
n
Topic:nDeferrednRevenuen
LO:n2n
8.nnDeferrednrevenuenandnunearnednrevenuenbothnreferntoncashnthatnhasnbeennreceivednbutnn
otnyetn
earned.n
n
Answer:nTruen
Rationale:nBothnunearnednrevenuenandndeferrednrevenuenreferntonfeesnreceivednbeforenservi
cesnaren
performedntonearnnthosenfees.n
n
n
Topic:nThenDouble-Entry nAccountingnSystem n
LO:n2n
9.nUndernthendouble-
entry naccountingnsystem,nnonmorenthanntwonaccountsncannbenaffectednbyneachn
transaction.n
n
Answer:nFalsen
Rationale:nEachntransactionnrecordednundernthendouble-
entry naccountingnsystem nmustnaffectnatnleastn
twonaccounts.nnItncannaffectnmorenthanntwo.n
n
n
Topic:nAnalyzingnTransactionsn
LO:n2n
10.nWhennanfirm npurchasesnequipmentnforncash,nbothnassetsnandnstockholders’nequity nincrea
se.n
n
Answer:nFalsen
Rationale:nThenassetnequipmentnwillnincrease,nandnthenassetncashnwillndecrease,nwithnnoneffe
ctnonn
stockholders’nequity.n
n
n
Topic:nTransactionnAnalysisn
LO:n2n
11.nWhennmoneynisnborrowed,nbothnannassetnaccountnandnanrevenuenaccountnarenincreased.n
n
