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9/8/13

Accounting Principles 11th edition by Weygandt Kieso solutions manual test bank

 

Accounting Principles 11th edition  by Weygandt Kieso solutions manual test bank

Book Description

Publication Date: January 4, 2013 | ISBN-10: 1118130030 | ISBN-13: 978-1118130032 | Edition: 11
The 11th edition of Weygandt’s Accounting Principles includes many new and enhanced features including updated currency of stories, and new financial accounting videos. The new edition focuses more on current examples and features that engage and motivate readers.  Furthermore, the new edition will have the following new features: feature stories and real world example updates; Concepts in Action; Quantum Tutors; Financial and Managerial Videos: People, Profit, Planet; Excel Approach and WileyPLUS Concept Module; and Updated Managerial Continuing Case.
Accounting Principles, 11th Edition (EHEP002545) cover image

Chapter 2 ANSWERS TO QUESTIONS


 1.     A T account has the following parts: (a) the title, (b) the left or debit side, and (c) the right or credit side.

 2.     Disagree. The terms debit and credit mean left and right respectively.

 3.     Heath is incorrect. The double-entry system merely records the dual effect of a transaction on the accounting equation. A transaction is not recorded twice; it is recorded once, with a dual effect.

 4.     Erica is incorrect. A debit balance only means that debit amounts exceed credit amounts in an account. Conversely, a credit balance only means that credit amounts are greater than debit amounts in an account. Thus, a debit or credit balance is neither favorable nor unfavorable.

 5.     (a)    Asset accounts are increased by debits and decreased by credits.
          (b)    Liability accounts are decreased by debits and increased by credits.
          (c)    Revenues and owner’s capital are increased by credits and decreased by debits. Expenses and owner’s drawing are increased by debits and decreased by credits.

 6.     (a)    Accounts Receivable—debit balance.
(b)    Cash—debit balance.
(c)    Owner’s Drawings—debit balance.
(d)    Accounts Payable—credit balance.
(e)    Service Revenue—credit balance.
(f)     Salaries and Wages Expense—debit balance.
(g)    Owner’s Capital—credit balance.

 7.     (a)    Accounts Receivable—asset—debit balance.
(b)    Accounts Payable—liability—credit balance
(c)    Equipment—asset—debit balance.
(d)    Owner’s Drawings—owner’s equity—debit balance.
(e)    Supplies—asset—debit balance.

 8.     (a)    Debit Supplies and credit Accounts Payable.
(b)    Debit Cash and credit Notes Payable.
(c)    Debit Salaries and Wages Expense and credit Cash.

 9.     (1)    Cash—both debit and credit entries.
(2)    Accounts Receivable—both debit and credit entries.
(3)    Owner’s Drawings—debit entries only.
(4)    Accounts Payable—both debit and credit entries.
(5)    Salaries and Wages Expense—debit entries only.
(6)    Service Revenue—credit entries only.

10.      The basic steps in the recording process are:
(1)    Analyze each transaction for its effect on the accounts.
(2)    Enter the transaction information in a journal.
(3)    Transfer the journal information to the appropriate accounts in the ledger.


Questions Chapter 2 (Continued)

11.     The advantages of using the journal in the recording process are:
          (1)    It discloses in one place the complete effects of a transaction.
          (2)    It provides a chronological record of all transactions.
          (3)    It helps to prevent or locate errors because the debit and credit amounts for each entry can be easily compared.

12.     (a)    The debit should be entered first.
          (b)    The credit should be indented.

13.     When three or more accounts are required in one journal entry, the entry is referred to as a compound entry. An example of a compound entry is the purchase of equipment, part of which is paid for with cash and the remainder is on account.

14.     (a)    No, debits and credits should not be recorded directly in the ledger.
(b)    The advantages of using the journal are:
1.   It discloses in one place the complete effects of a transaction.
2.   It provides a chronological record of all transactions.
3.   It helps to prevent or locate errors because the debit and credit amounts for each entry can be easily compared.

15.     The advantage of the last step in the posting process is to indicate that the item has been posted.

16.     (a)    Cash................................................................................................             9,000  
                           Owner’s Capital......................................................................                  9,000
                                 (Invested cash in the business)

          (b)    Prepaid Insurance...........................................................................                800  
                           Cash.......................................................................................                             800
                                 (Paid one-year insurance policy)

          (c)    Supplies..........................................................................................             2,000
                           Accounts Payable..................................................................                                2,000
                                 (Purchased supplies on account)

          (d)    Cash................................................................................................             7,500
                           Service Revenue....................................................................                                7,500
                                 (Received cash for services performed)

17.     (a)  The entire group of accounts maintained by a company, including all the asset, liability, and owner’s equity accounts, is referred to collectively as the ledger.
          (b)  A chart of accounts is a list of accounts and the account numbers that identify their location in the ledger. The chart of accounts is important, particularly for a company that has a large number of accounts, because it helps organize the accounts and define the level of detail that a company desires in its accounting system.



Questions Chapter 2 (Continued)

18.     A trial balance is a list of accounts and their balances at a given time. The primary purpose of a trial balance is to prove (check) that the debits equal the credits after posting. A trial balance also facilitates the discovery of errors in journalizing and posting. In addition, it is useful in preparing financial statements.

19.         No, Victor is not correct. The proper sequence is as follows:
(b)    Business transaction occurs.
(c)    Information entered in the journal.
(a)    Debits and credits posted to the ledger.
(e)    Trial balance is prepared.
(d)    Financial statements are prepared.

20.     (a)    The trial balance would balance.
          (b)    The trial balance would not balance.

21.     The normal balances are Cash debit, Accounts Payable credit, and Interest Expense debit.
 CHAPTER 2

TEST bank for ch2 THE RECORDING PROCESS


Summary of Questions by learning Objectives and Bloom’s Taxonomy

Item
LO
BT
Item
LO
BT
Item
LO
BT
Item
LO
BT
Item
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BT

True-False Statements

1.
1
K
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2
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17.
3
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5
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1
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1
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4
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7
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5.
2
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2
K
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4
K
29.
6
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sg37.
7
K
6.
2
K
14.
2
K
22.
4
K
30.
7
K



7.
2
K
15.
3
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23.
4
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2
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8.
2
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4
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2
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Multiple Choice Questions

38.
1
K
63.
2
C
88.
3
K
113.
5
K
138.
7
C
39.
1
K
64.
2
C
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1
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40.
1
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2
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90.
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115.
5
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2
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41.
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42.
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3
C
117.
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3
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43.
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68.
2
K
93.
3
K
118.
4
AP
sg143.
3
K
44.
1
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69.
2
K
94.
3
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119.
6
K
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4
K
45.
2
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70.
2
C
95.
3
K
120.
6
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sg145.
4
K
46.
2
K
71.
2
K
96.
3
K
121.
6
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4
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47.
2
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72.
2
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97.
4
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4
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48.
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6
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2
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99.
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2
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100.
4
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105.
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60.
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61.
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111.
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62.
2
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7
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Brief Exercises

159.
2
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162.
4
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164.
4
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166.
6
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168.
7
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160.
2
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163.
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167.
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169.
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161.
2
K












st     This question also appears in a self-test at the student companion website.

Summary of Questions by learning Objectives and Bloom’s Taxonomy


CHAPTER LEARNING OBJECTIVES

1.   Explain what an account is and how it helps in the recording process. An account is a record of increases and decreases in specific asset, liability, and owner's equity items.
2.   Define debits and credits and explain their use in recording business transactions. The terms debit and credit are synonymous with left and right. Assets, drawings, and expenses are increased by debits and decreased by credits. Liabilities, owner's capital, and revenues are increased by credits and decreased by debits.
3.   Identify the basic steps in the recording process. The basic steps in the recording process are (a) analyze each transaction for its effects on the accounts, (b) enter the transaction information in a journal, (c) transfer the journal information to the appropriate accounts in the ledger.
4.   Explain what a journal is and how it helps in the recording process. The initial accounting record of a transaction is entered in a journal before the data are entered in the accounts. A journal (a) discloses in one place the complete effects of a transaction, (b) provides a chronological record of transactions, and (c) prevents or locates errors because the debit and credit amounts for each entry can be easily compared.
5.   Explain what a ledger is and how it helps in the recording process. The ledger is the entire group of accounts maintained by a company. The ledger provides the balance in each of the accounts as well as keeps track of changes in these balances.
6.   Explain what posting is and how it helps in the recording process. Posting is the transfer of journal entries to the ledger accounts. This phase of the recording process accumulates the effects of journalized transactions in the individual accounts.
7.   Prepare a trial balance and explain its purposes. A trial balance is a list of accounts and their balances at a given time. Its primary purpose is to prove the equality of debits and credits after posting. A trial balance also uncovers errors in journalizing and posting and is useful in preparing financial statements.

TRUE-FALSE STATEMENTS

    1.     A new account is opened for each transaction entered into by a business firm.

                    Ans: F   LO1   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

    2.     The recording process becomes more efficient and informative if all transactions are recorded in one account.

                    Ans: F   LO1   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

    3.     When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers.

                    Ans: F   LO1   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

    4.     An account is often referred to as a T-account because of the way it is constructed.

                    Ans: T   LO1   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

    5.     A debit to an account indicates an increase in that account.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

    6.     If a revenue account is credited, the revenue account is increased.

                    Ans: T   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

    7.     The normal balance of all accounts is a debit.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

    8.     Debit and credit can be interpreted to mean increase and decrease, respectively.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

    9.     The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  10.     A credit balance in a liability account indicates that an error in recording has occurred.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  11.     The drawing account is a subdivision of the owner's capital account and appears as an expense on the income statement.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  12.     Revenues are a subdivision of owner's capital.

                    Ans: T   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  13.     Under the double-entry system, revenues must always equal expenses.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  14.     Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  15.     Business documents can provide evidence that a transaction has occurred.

                    Ans: T   LO3   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  16.     Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

                    Ans: T   LO3   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  17.     Transactions are entered in the ledger accounts and then transferred to journals.

                    Ans: F   LO3   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  18.     All business transactions must be entered first in the general ledger.

                    Ans: F   LO3   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  19.     A simple journal entry requires only one debit to an account and one credit to an account.

                    Ans: T   LO4   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  20.     A compound journal entry requires several debits to one account and several credits to one account.

            Ans: F   LO4   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  21.     Transactions are recorded in alphabetic order in a journal.

                    Ans: F   LO4   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  22.     A journal is also known as a book of original entry.

                    Ans: T   LO4   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  23.     The complete effect of a transaction on the accounts is disclosed in the journal.

                    Ans: T   LO4   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  24.     The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

                    Ans: F   LO4   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  25.     The chart of accounts is a special ledger used in accounting systems.

                    Ans: F   LO5   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  26.     A general ledger should be arranged in the order in which accounts are presented in the financial statements, beginning with the balance sheet accounts.

                    Ans: T   LO5   BT:C K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  27.     The number and types of accounts used by different business enterprises are the same if generally accepted accounting principles are being followed by the enterprises.

                    Ans: F   LO6  BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  28.     Posting is the process of proving the equality of debits and credits in the trial balance.

                    Ans: F   LO6   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  29.     After a transaction has been posted, the reference column in the journal should not be blank.

                    Ans: T   LO6   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  30.     A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

                    Ans: T   LO7   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  31.     The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction.

                    Ans: T   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  32.     The normal balance of an expense is a credit.

                    Ans: F   LO2   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  33.     The journal provides a chronological record of transactions.

                    Ans: T   LO4   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  34.     The ledger is merely a bookkeeping device and therefore does not provide much useful data for management.

                    Ans: F   LO5   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  35.     The chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger.

                    Ans: T   LO6   BT: C   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  36.     The primary purpose of a trial balance is to prove the mathematical equality of the debits and credits after posting.

                    Ans: T   LO7   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

  37.     The trial balance will not balance when incorrect account titles are used in journalizing or posting.

                    Ans: F   LO7   BT: K   Difficulty: Easy   TOT: .5 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting

Answers to True-False Statements

Item
Ans.
Item
Ans.
Item
Ans.
Item
Ans.
Item
Ans.
Item
Ans.
Item
Ans.
1.
F
7.
F
13.
F
19.
T
25.
F
31.
T
37.
F
2.
F
8.
F
14.
F
20.
F
26.
T
32.
F


3.
F
9.
F
15.
T
21.
F
27.
F
33.
T


4.
T
10.
F
16.
T
22.
T
28.
F
34.
F


5.
F
11.
F
17.
F
23.
T
29.
T
35.
T


6.
T
12.
T
18.
F
24.
F
30.
T
36.
T


 


MULTIPLE CHOICE QUESTIONS

  38.     An account consists of
a.   one part.
b.   two parts.
c.   three parts.
d.   four parts.

Ans: c   LO1   BT: K   Difficulty: Easy   TOT: 1 min.   AACSB: RT   AICPA  BB: CT   AICPA  FN: Reporting




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