Question

6. Which of the following presents key aspects of the process of accounting in the correct chronological order? a. Totaling, auditing, and budgeting b. Budgeting, recording, and communicating c. Recording, totaling, and auditing d. Identifying, recording, and communicating 7. The process of transferring transaction effects into the appropriate accounts is referred to as a. closing. b. joumalizing. C. recording. d. posting 8. The following describes the process of identifying the economic events of an organization a. Keeping a chronological diary of particular events in an orderly and systematic manner. b. Selecting the economic activities relevant to a particular organization. c. Preparing accounting reports, including financial statements. d. Quantifying events in dollars and cents. 9. The current source of "GAAP" in the private sector is the a. Accounting Principles Board. b. Internal Revenue Service. c. Financial Accounting Standards Board. d. Securities Exchange Commission. 10. Transactions are initially recorded in the a. general ledger. b. trial balance. c. general journal. d. balance sheet. . The retained earnings account had a beginning balance of $40,000 and an ending balance of $50,000. If $10,000 of dividends were paid during the period, net income must have been a. $20,000. b. $40,000. c. $10,000. d. $30,000. 12. Which of the following is false with regard to a general journal? a. It tracks the increases and decreases in an individual account. b. It provides a chronological record of transactions. c. It discloses in one place the complete effects of a transaction. d. It helps to prevent errors since the debit and credit amounts in an individual entry can be readily compared.

Answer 1

6. Option (d) is correct

Identifying, recording and communicating

7. Option (d) is correct

Process of transferring transaction effects into the appropriate accounts is called posting.

8.Option (b) is correct

Identifying involves selecting the economic activities relevant to a prticular organization.

9. Option (c) is correct

Current source of GAAP in the private sector is Financial Accounting Standards Borad.

10. Option (a) is correct

Transactions are initially recorded in General Journal.

11. Option (a) is correct

Ending retained earnings = Beginning retained earnings + Net income - Dividends

Putting the values in the above equation, we get,

$50000 = $40000 + Net income - $10000

$50000 = $30000 + Net income

Net income = $50000 - $30000 = $20000

12. Option (d) is correct

The statement " It helps to prevent errors since the debit and credit amounts in an individual entry can be readily compared." is a false statement.