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: 11The 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.
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
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Multiple Choice Questions
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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
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1.
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F
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7.
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F
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13.
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F
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19.
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T
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25.
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F
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31.
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T
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37.
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F
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2.
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F
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8.
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F
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14.
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F
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20.
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F
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26.
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T
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32.
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F
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3.
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F
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9.
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F
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15.
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T
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21.
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F
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27.
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F
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33.
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T
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4.
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T
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10.
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F
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16.
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T
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22.
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T
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28.
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F
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34.
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F
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5.
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F
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11.
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F
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17.
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F
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23.
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T
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29.
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T
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35.
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T
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6.
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T
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12.
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18.
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F
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24.
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F
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30.
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T
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36.
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T
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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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