ACCT212 Financial Accounting
WEEK 2 CHECKPOINT
Question 1
(TCO 2) The debt created by a business when it makes a
purchase on account is a(n)
revenue.
prepaid expense.
account receivable.
account payable.
Question 2
(TCO 2) A company performed services for a customer for
cash. This transaction increased assets and
decreased equity.
increased
liabilities.
increased expenses.
increased revenues.
Question 3
(TCO 2) When a company borrows cash from the bank
total assets remain
the same.
liabilities are
increased.
retained earnings is
decreased.
total liabilities
remain the same.
Question 4
(TCO 2) Which of the following is a true statement regarding
T-accounts?
The transaction
needs to be analyzed to determine which accounts are affected before entering
amounts in the T-accounts.
If a company pays
cash, an amount would be entered on the left side of the T-account.
T-accounts are only
used to record complex transactions.
To debit an asset,
an amount is entered on the left side of the T-account and to debit a liability
an amount is entered on the right side of the T-account.
Question 5
(TCO 2) An important rule of debits and credits is
credits increase a
liability account.
debits decrease an
asset account
revenues are
increased by a debit.
expenses are
increased by a credit.
Question 6
(TCO 2) Accounting transactions are initially recorded in
the
T-account.
ledger.
journal.
financial
statements.
Question 7
(TCO 3) Under accrual accounting, revenue is recorded
when the cash is
collected, regardless of when the services are performed.
when the services
are performed, regardless of when the cash is received.
either when the cash
is received or the sale is made.
only if the cash is
received at the same time the services are performed.
Question 8
(TCO 3) The event that triggers revenue recognition for the
sale of goods is the
date a contract is
signed.
date cash is
received.
transfer of control
of the goods to the purchaser.
completion of the
services.
Question 9
(TCO 3) The balance sheet reports
assets, liabilities
and stockholders’ equity.
the changes in
retained earnings.
assets, liabilities,
revenues and expenses.
revenues and
expenses.
Question 10
(TCO 3) Closing entries
are made at the
beginning of each accounting period.
prepare the accounts
for the next period’s transaction.
cannot be done using
a computer.
are the same as
adjusting entries.