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