Chapter 3- True And false

Question 0

The Objective Evidence accounting concept requires that there be proof that a transaction did occur

Answer 0

True

Question 1

Information in a journal includes the debit and credit parts of each transaction recorded in one place

Answer 1

True

Question 2

Examples of source documents include checks, sales invoices, memorandums, and letters

Answer 2

False

Question 3

A check is the source document used when items are paid in cash

Answer 3

True

Question 4

Checks and sales invoices are prenumbered in sequence to help account for them

Answer 4

True

Question 5

A receipt is the source document for cash received from transactions others than sales

Answer 5

True

Question 6

A calculator tape is the source document for daily sales

Answer 6

True

Question 7

The accounts affected when cash received from the owner as an investment are Cash and the capital account

Answer 7

True

Question 8

When cash is paid for supplies, the cash account is credited

Answer 8

True

Question 9

When cash is used to pay for insurance, the asset account prepaid insurance decreases

Answer 9

False

Question 10

The source document used when supplies are ordered by telephone on account is a memorandum

Answer 10

True

Question 11

The source document used when supplies bought on account are paid for is a check.

Answer 11

True

Question 12

When cash is received from sales, both the cash account and the sales account are increased

Answer 12

True

Question 13

The source document Sales Invoice No. 1 is abbreviated as S1 in a journal entry.

Answer 13

True

Question 14

When services are sold on account, an asset account and a revenue account are affected

Answer 14

True

Question 15

The accounts affected when paying cash for rent are rent expense and cash

Answer 15

True

Question 16

When cash is received on account, one asset account increases and another asset account decreases

Answer 16

True

Question 17

The accounts affected when paying cash to the owner for personal use are the drawing account and cash

Answer 17

True

Question 18

If there is only one blank line remaining on a journal page. It is standard practice to split the entry and record the second line of entry on the next page

Answer 18

False

Question 19

To correct an error in a journal, simply erase the incorrect item and write the correct item in the same place

Answer 19

False

Question 20

Dollars and cents signs and decimal points should be used when writing amounts on ruled accounting pages.

Answer 20

False