KUIS AKUNTANSI KEUANGAN MENENGAH I (SERI 02A)

ACCOUNTING INFORMATION SYSTEM

TRUE-FALSE

1. Real (permanent) accounts are revenue, expense, and dividend accounts and are
periodically closed.
2. A ledger is where the company initially records transactions and selected other events.
3. In general, debits refer to increases in account balances, and credits refer to decreases.
4. If a company fails to post one of its journal entries to its general ledger, the trial balance will
not show an equal amount of debit and credit balance accounts.
5. The post-closing trial balance contains only permanent accounts.
6. Deferrals occur when the cash flow precedes either revenue or expense recognition.
7. After an unadjusted trial balance is prepared, the next step in the accounting processing
cycle is the preparation of financial statements.
8. The accrual basis recognizes revenue when earned and expenses in the period when cash
is paid.
9. Reversing entries are made at the end of the accounting cycle to correct errors in the
original recording of transactions.
10. One purpose of a trial balance is to prove that debits and credits of an equal amount are in
the general ledger.

MULTIPLE CHOICE

11.During the first year of Wilkinson Co.'s operations, all purchases were recorded as assets.
Store supplies in the amount of $19,350 were purchased. Actual year-end store supplies
amounted to $6,450. The adjusting entry for store supplies will
a. increase net income by $12,900.
b. increase expenses by $12,900.
c. decrease store supplies by $6,450.
d. debit Accounts Payable for $6,450.

12.Which of the following is a nominal (temporary) account?

a. Unearned Revenue
b. Salary Expense
c. Inventory
d. Retained Earnings
13.The failure to properly record an adjusting entry to accrue an expense will result in an:
a. understatement of expenses and an understatement of liabilities.
b. understatement of expenses and an overstatement of liabilities.
c. understatement of expenses and an overstatement of assets.
d. overstatement of expenses and an understatement of assets.

14.If ending accounts receivable exceeds the beginning accounts receivable:

a. cash collections during the period exceed the amount of revenue earned.
b. net income for the period is less than the amount of cash basis income.
c. no cash was collected during the period.
d. cash collections during the year are less than the amount of revenue earned.

15.A trial balance may prove that debits and credits are equal, but
a. an amount could be entered in the wrong account.
b. a transaction could have been entered twice.
c. a transaction could have been omitted.
d. all of these.

16.Which type of account is always debited during the closing process?

a. Dividends.
b. Expense.
c. Revenue.
d. Retained earnings.

17.Crown Corporation received cash of $13,500 on September 1, 2010 for one year’s rent in
advance and recorded the transaction with a credit to Unearned Rent. The December 31,
2010 adjusting entry is
a. debit Rent Revenue and credit Unearned Rent, $4,500.
b. debit Rent Revenue and credit Unearned Rent, $9,000.
c. debit Unearned Rent and credit Rent Revenue, $4,500.
d. debit Cash and credit Unearned Rent, $9,000.

18.The debit and credit analysis of a transaction normally takes place

a. before an entry is recorded in a journal.
b. when the entry is posted to the ledger.
c. when the trial balance is prepared.
d. at some other point in the accounting cycle.

19.An optional step in the accounting cycle is the preparation of

a. adjusting entries.
b. closing entries.
c. a statement of cash flows.
d. a post-closing trial balance.
20.Rainbow Corporation paid cash of $18,000 on June 1, 2010 for one year’s rent in advance
and recorded the transaction with a debit to Prepaid Rent. The December 31, 2010
adjusting entry is
a. debit Prepaid Rent and credit Rent Expense, $7,500.
b. debit Prepaid Rent and credit Rent Expense, $10,500.
c. debit Rent Expense and credit Prepaid Rent, $10,500.
d. debit Prepaid Rent and credit Cash, $7,500.
SOLUTION 02A

1.F 11.B
2.F 12.B
3.F 13.A
4.F 14.D
5.T 15.D

6.T 16.C
7.F 17.C
8.F 18.A
9.F 19.D
10.T 20.C
 KUIS AKUNTANSI KEUANGAN MENENGAH I (SERI 02B)

ACCOUNTING INFORMATION SYSTEM

TRUE-FALSE

1. The accrual basis recognizes revenue when earned and expenses in the period when cash
is paid.
2. The post-closing trial balance contains only permanent accounts.
3. Deferrals occur when the cash flow precedes either revenue or expense recognition.
4. One purpose of a trial balance is to prove that debits and credits of an equal amount are in
the general ledger.
5. After an unadjusted trial balance is prepared, the next step in the accounting processing
cycle is the preparation of financial statements.
6. If a company fails to post one of its journal entries to its general ledger, the trial balance will
not show an equal amount of debit and credit balance accounts.
7. Reversing entries are made at the end of the accounting cycle to correct errors in the
original recording of transactions.
8. Real (permanent) accounts are revenue, expense, and dividend accounts and are
periodically closed.
9. A ledger is where the company initially records transactions and selected other events.
10. In general, debits refer to increases in account balances, and credits refer to decreases.

MULTIPLE CHOICE

11.Frezzee Corporation received cash of $13,500 on September 1, 2010 for one year’s rent in
advance and recorded the transaction with a credit to Unearned Rent. The December 31,
2010 adjusting entry is
a. debit Rent Revenue and credit Unearned Rent, $4,500.
b. debit Rent Revenue and credit Unearned Rent, $9,000.
 c. debit Unearned Rent and credit Rent Revenue, $4,500.
d. debit Cash and credit Unearned Rent, $9,000.
12.The failure to properly record an adjusting entry to accrue an expense will result in an:
a. understatement of expenses and an understatement of liabilities.
b. understatement of expenses and an overstatement of liabilities.
c. understatement of expenses and an overstatement of assets.
d. overstatement of expenses and an understatement of assets.

13.A trial balance may prove that debits and credits are equal, but
a. an amount could be entered in the wrong account.
b. a transaction could have been entered twice.
c. a transaction could have been omitted.
d. all of these.

14.Which of the following is a nominal (temporary) account?

a. Unearned Revenue
b. Salary Expense
c. Inventory
d. Retained Earnings

15.During the first year of Rising Star Co.'s operations, all purchases were recorded as assets.
Store supplies in the amount of $19,350 were purchased. Actual year-end store supplies
amounted to $6,450. The adjusting entry for store supplies will
a. increase net income by $12,900.
b. increase expenses by $12,900.
c. decrease store supplies by $6,450.
d. debit Accounts Payable for $6,450.

16.The debit and credit analysis of a transaction normally takes place

a. before an entry is recorded in a journal.
b. when the entry is posted to the ledger.
c. when the trial balance is prepared.
d. at some other point in the accounting cycle.

17.An optional step in the accounting cycle is the preparation of

a. adjusting entries.
b. closing entries.
c. a statement of cash flows.
d. a post-closing trial balance.

18.Black Shadow Corporation paid cash of $18,000 on June 1, 2010 for one year’s rent in
advance and recorded the transaction with a debit to Prepaid Rent. The December 31, 2010
adjusting entry is
a. debit Prepaid Rent and credit Rent Expense, $7,500.
 b. debit Prepaid Rent and credit Rent Expense, $10,500.
c. debit Rent Expense and credit Prepaid Rent, $10,500.
d. debit Prepaid Rent and credit Cash, $7,500.

19.If ending accounts receivable exceeds the beginning accounts receivable:

a. cash collections during the period exceed the amount of revenue earned.
b. net income for the period is less than the amount of cash basis income.
c. no cash was collected during the period.
d. cash collections during the year are less than the amount of revenue earned.

20.Which type of account is always debited during the closing process?

a. Dividends.
b. Expense.
c. Revenue.
d. Retained earnings.
SOLUTION 02B

1.F 11.C
2.T 12.A
3.T 13.D
4.T 14.B
5.F 15.B

6.F 16.A
7.F 17.D
8.F 18.C
9.F 19.D
10.F 20.C