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21 first statement a ledger is where the company

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21.First statement:A ledger is where the company initially records transactionsand selected other events.Second statement:Nominal (temporary) accounts are revenue, expense, anddividend accounts and are periodically closed.a.True, Trueb.True, Falsec.False, Trued.False, False
22.First statement:The dividends account is considered a real account.Second statement:The "book of original entry" is also known as the journal.
23.First statement:On the income statement, debits are used to increase accountbalances, whereas on the statement of financial position, credits are used toincrease account balances.Second statement:The rules for debit and credit and the normal balance of ShareCapitalOrdinary are the same as for liabilities.
PRISM CPA REVIEW24.First statement:On the income statement, revenues are increased by a debitwhereas on the statement of financial position retained earnings is increased by acredit.Second statement:Both a corporation and a proprietorship commonly use theshare capital account.
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25.First statement:In general, debits refer to increases in account balances, andcredits refer to decreases.Second statement:All liability and equity accounts are increased on the creditside and decreased on the debit side.a.True, Trueb.True, Falsec.False, Trued.False, False
26.First statement:The first step in the accounting cycle is the journalizing oftransactions and selected other events.Second statement:Basic steps in the recording process include transferring thejournal information to the appropriate account in the statement of financialposition.
27.First statement:The trial balance uncovers any errors in journalizing andposting prior to preparation of the statement of financial position.Second statement:The trial balance is a listing of all the accounts and theirbalances in the order the accounts appear on the statement of financial position.
28.First statement:One purpose of a trial balance is to prove that debits andcredits of an equal amount are in the general ledger.Second statement:A general journal chronologically lists transactions and otherevents, expressed in terms of debits and credits to accounts.
29.First statement:An adjusted trial balance that shows equal debit and creditcolumnar totals proves the accuracy of the adjusting entries.Second statement:Reversing entries are made at the end of the accounting cycleto correct errors in the original recording of transactions.a.True, Trueb.True, Falsec.False, Trued.False, False
30.First statement:Each adjusting entry affects one statement of financial positionaccount and one income statement account.Second statement:The accrual basis recognizes revenue when earned andexpenses in the period when cash is paid.
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Term
Fall
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Tags
Balance Sheet, Generally Accepted Accounting Principles, Double entry bookkeeping system, Prism

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