THE RECORDING PROCESS

61. The double-entry system requires that each transaction must be
recorded
a. in at least two different accounts.
b. in two sets of books.
c. in a journal and in a ledger.
d. first as a revenue and then as an expense.

62. Which of the following accounts does not have a normal credit balance?
a. Share Capital–Ordinary
b. Revenue account
c. Liability account
d. Dividends

63. Which one of the following represents the
expanded basic accounting equation?
a. Assets = Liabilities + Share Capital–Ordinary
account + Retained Earnings + Dividends – Revenue – Expenses.
b. Assets + Dividends + Expenses = Liabilities +
Share Capital–Ordinary + Retained Earnings + Revenues.
c. Assets – Liabilities – Dividends = Share
Capital–Ordinary + Retained Earnings + Revenues – Expenses.
d. Assets = Revenues + Expenses –
Liabilities.

64. Which of the following correctly identifies
normal balances of accounts?
a. Assets Debit
Liabilities Credit
Equity Credit
Revenues Debit
Expenses Credit
b. Assets Debit
Liabilities Credit
Equity Credit
Revenues Credit
Expenses Credit
c. Assets Credit
Liabilities Debit
Equity Debit
Revenues Credit
Expenses Debit
d. Assets Debit
Liabilities Credit
Equity Credit
Revenues Credit
Expenses Debit

65. The best interpretation of the word credit
is the
a. offset side of an account.
b. increase side of an account.
c. right side of an account.
d. decrease side of an account.

66. In recording an accounting transaction in a
double-entry system
a. the number of debit accounts must equal the
number of credit accounts.
b. there must always be entries made on both
sides of the accounting equation.
c. the amount of the debits must equal the
amount of the credits.
d. there must only be two accounts affected by
any transaction.

67. An accounting convention is best described
as
a. an absolute truth.
b. an accounting custom.
c. an optional rule.
d. something that cannot be changed.

68. A debit is not the normal balance for which account listed below?
a. Dividends
b. Cash
c. Accounts Receivable
d. Service Revenue

69. An accountant has debited an asset account
for $1,000 and credited a liability account for $500. What can be done to
complete the recording of the transaction?
a. Nothing further must be done.
b. Debit an equity account for $500.
c. Debit another asset account for $500.
d. Credit a different asset account for $500.

70. An accountant has debited an asset account
for $1,000 and credited a liability account for $500. Which of the following
would be an incorrect way to
complete the recording of the transaction?
a. Credit an asset account for $500.
b. Credit another liability account for $500.
c. Credit an equity account for $500.
d. Debit an equity account for $500.