Question : 1. Accounts records of increases and decreases in individual financial statement : 1251610

1. Accounts are records of increases and decreases in individual financial statement items. 
 

2. A chart of accounts is a listing of accounts that make up the journal. 
 

3. Accounts payable are accounts that you expect will be paid to you. 
 

4. The chart of accounts should be the same for each business. 
 

5. Consuming goods and services in the process of generating revenues results in expenses. 
 

6. Prepaid expenses are an example of an expense. 
 

7. The unearned revenues account is an example of a liability. 
 

8. The dividends account is an example of an expense. 
 

9. Accounts in the ledger are usually maintained in alphabetical order. 
 

10. Depending on the account title, the right side of the account is referred to as the credit side. 
 

11. To determine the balance in an account, always subtract credits from debits. 
 

12. An account has three parts to it; a title, an increase side, and a decrease side. 
 

13. The right hand side of a T account is known as a debit and the left hand side is known as a credit. 
 

14. A debit is abbreviated as Db and a credit is abbreviated as Cr. 
 

15. Debiting the cash account will increase the account. 
 

16. The T account got its name because it resembles the letter “T.” 
 

17. The recording of cash receipts to the cash account will be done by debiting the account. 
 

18. A credit to the cash account will increase the account. 
 

19. The recording of cash payments from the cash account is done by entering the amount as a credit. 
 

20. The cash account will always be debited. 
 

21. The balance of the account can be determined by adding all of the debits, adding all of the credits, and adding the amounts together. 
 

22. Liabilities are debts owed by the business entity. 
 

23. The accounts payable account is listed in the chart of accounts as an asset. 
 

24. A dividends account records amounts paid to stockholders. 
 

25. Revenues are equal to the difference between cash receipts and cash payments. 
 

26. Expenses use up assets or consume services in the process of generating revenues. 
 

27. Retained earnings will be reduced by the amount in the dividends account. 
 

28. When a company issues new shares of stock, the capital stock account increases due to revenue being earned. 
 

29. When an accounts payable account is paid in cash, company expenses increase. 
 

30. When an account receivable is collected in cash, the total assets of the business increase. 
 

31. Journalizing eliminates fraud. 
 

32. The double-entry accounting system records each transaction twice. 
 

33. The increase side of all accounts is the normal balance. 
 

34. Transactions are initially entered into a record called a journal. 
 

35. The process of recording a transaction in the journal is called journalizing. 
 

36. Journalizing is the process of entering amounts in the ledger. 
 

37. Transactions are listed in the journal chronologically. 
 

38. Journalizing transactions using the double-entry bookkeeping system will eliminate fraud. 
 

39. Liability accounts are increased by debits. 
 

40. Expense accounts are increased by credits. 
 

41. Revenue accounts are increased by credits. 
 

42. The normal balance of a capital stock account is a debit. 
 

43. The normal balance of the dividends account is a debit. 
 

44. The normal balance of an expense account is a credit. 
 

45. The normal balance of revenue accounts is a credit. 
 

46. Dividends decrease retained earnings and are listed on the income statement as a deduction from revenue. 
 

47. For a month’s transactions for a typical medium-sized business, the salary expense account is likely to have only credit entries. 
 

48. For a month’s transactions for a typical medium-sized business, the accounts payable account is likely to have only credit entries. 
 

49. When a business receives a bill from the utility company, no entry should be made until the invoice is paid. 
 

50. The journal includes both debit and credit accounts for each transaction. 
 

51. A transaction that is recorded in the journal is called a journal entry. 
 

52. Assets are increased with debits and decreased with credits. 
 

53. Liabilities are increased with debits and decreased with credits. 
 

54. Debits will increase Unearned Revenues and Revenues. 
 

55. All stockholders’ equity accounts record increases to the accounts with credits. 
 

56. Journal entries can have more than two accounts as long as the debits equal the credits. 
 

57. Normal balances appear on the side that increases the account balance. 
 

58. The process of transferring the data from the journal to the ledger accounts is posting. 
 

59. The post reference notation used in the ledger is the account number. 
 

60. The post reference notation used in the journal is the page number. 
 

61. A notation in the post reference column of the general journal indicates that the amount has been posted to the ledger. 
 

62. The order of the flow of accounting data is (1) record in the ledger, (2) record in the journal, (3) prepare the financial statements. 
 

63. The process of transferring the debits and credits from the journal entries to the accounts is known as “updating the accounts”. 
 

64. Once journal entries are posted to accounts, each account will show a new balance after each entry. 
 

65. A group of related accounts that make up a complete unit is called a trial balance. 
 

66. A trial balance determines the accuracy of the numbers. 
 

67. Even when a trial balance is in balance, there may be errors in the individual accounts. 
 

68. The totals at the bottom of the trial balance and the totals at the bottom of the balance sheet both show equality and balancing, and therefore should be equal. 
 

69. A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a balance sheet. 
 

70. If the trial balance is in balance, it can be assumed that all journal entries were posted correctly and no errors were made. 
 

71. Posting a part of a transaction to the wrong account will cause the trial balance totals to be unequal. 
 

72. The erroneous arrangement of digits, such as writing $45 as $54, is called a slide. 
 

73. Journalizing a transaction with both the debit and the credit for $69 instead of $96 will cause the trial balance to be out of balance. 
 

74. Posting a transaction twice will cause the trial balance totals to be equal. 
 

75. The erroneous moving of an entire number one or more spaces to the right or left, such as writing $85 as $850, is called a transposition. 
 

76. Accounts 
A. do not reflect money amounts
B. are not used by entities that manufacture products
C. are records of increases and decreases in individual financial statement items
D. are only used by large entities with many transactions

77. Accounts are classified in the ledger 
A. chronologically
B. alphabetically
C. in accordance with their appearance in the financial statements
D. so that accounts used most often are listed first

78. Revenue should be recognized when 
A. cash is received
B. the service is performed
C. the customer places an order
D. the customer charges an order

79. Which of the following accounts is a stockholders’ equity account? 
A. Cash
B. Accounts Payable
C. Prepaid Insurance
D. Dividends

80. The gross increases in retained earnings attributable to business activities are called 
A. assets
B. liabilities
C. revenues
D. net income

81. A chart of accounts is 
A. the same as a balance sheet
B. usually a listing of accounts in alphabetical order
C. usually a listing of accounts in financial statement order
D. used in place of a ledger

82. The debit side of an account 
A. depends on whether the account is an asset, liability or stockholders’ equity item
B. can be either side of the account depending on how the accountant set up the system
C. is the right side of the account
D. is the left side of the account

83. An account is said to have a debit balance if 
A. the amount of the debits exceeds the amount of the credits
B. there are more entries on the debit side than on the credit side
C. its normal balance is debit without regard to the amounts or number of entries on the debit side
D. the first entry of the accounting period was posted on the debit side

84. Which statement(s) concerning cash is (are) true? 
A. cash will always have more debits than credits
B. cash will never have a credit balance
C. cash is increased by debiting
D. all of the above

85. Which of the following is true about a T account? 
A. The left-hand side of the T account is called the debit side.
B. The left-hand side of the T account is called the credit side.
C. The right-hand side of the T account is called the debit side.
D. None of these are true.

86. Which of the following abbreviations are correct? 
A. Debit “Dr”, Credit “Cd”
B. Debit “Db”, Credit “Cr”
C. Debit “Db”, Credit “Cd”
D. Debit “Dr”, Credit “Cr”

87. Which side of the account increases a cash account? 
A. credit
B. neither a debit or a credit
C. debit
D. either a debit or a credit

88. A cash payment is recorded on the cash account as a  
A. neither a debit or a credit
B. credit
C. debit
D. either a debit or a credit

89. The balance of the account is determined by 
A. adding all of the debits to all of the credits.
B. always subtracting the debits from the credits.
C. always subtracting the credits from the debits.
D. adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum.

90. A list of the accounts is called 
A. ledger
B. chart of accounts
C. T account
D. debit

91. On the chart of accounts, the balance sheet accounts are normally listed in the following order 
A. liabilities, assets, stockholders’ equity
B. assets, liabilities, stockholders’ equity
C. stockholders’ equity, assets, liabilities
D. assets, stockholders’ equity, liabilities

92. In which order are the accounts listed in the chart of accounts? 
A. assets, expenses, liabilities, stockholders’ equity, revenues
B. stockholders’ equity, assets, liabilities, revenues, expenses
C. assets, liabilities, stockholders’ equity, revenues, expenses
D. assets, liabilities, revenues, expenses, stockholders’ equity

93. Which are the parts of the T account? 
A. title, date, total
B. date, debit side, credit side
C. title, debit side, credit side
D. title, debit side, total

94. Which group of accounts is comprised of only assets? 
A. Cash, Accounts Payable, Buildings
B. Accounts Receivable, Revenue, Cash
C. Prepaid Expenses,  Buildings, Patents
D. Unearned Revenues, Prepaid Expenses, Cash

95. Of the following, which istrue about assets? 
A. Assets include physical items and intangibles that have value.
B. Assets include only physical items of value.
C. Assets are owned solely by the stockholders of the company.
D. Assets are the result of selling products or services to customers.

96. Which of the following is not considered to be a liability? 
A. Wages Payable
B. Accounts Receivable
C. Unearned Revenues
D. Accounts Payable

97. Which of the following statements is not true about liabilities? 
A. Liabilities are debts owed to outsiders.
B. Account titles of liabilities often include the term “payable.”
C. Receiving cash before a service is performed creates a liability.
D. Liabilities do not include wages owed to employees of the company.

98. Retained earnings will be reduced by all of the following except 
A. revenues
B. expenses
C. dividends
D. all of these

99. Expenses can result from 
A. paying dividends
B. consuming services
C. using up liabilities
D. all of these

100. Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means 
A. all of the information from the journal was correctly transferred to the ledger
B. all accounts have their correct balances in the ledger
C. only the journal is accurate; the ledger may be incorrect
D. only that the debit dollar amounts equal the credit dollar amounts

101. The chart of accounts is designed to 
A. alphabetize the accounts to make reading easier for its financial statement users
B. analyze the accounts and organize them in order of dollar amount to simplify the accounting information for users
C. summarize the transactions and determine their ending balances
D. meet the information needs of a company and other financial statement users

102. The chart of accounts classifies the accounts to make identification of the accounts easier. This is done by way of assigning a number to each account. The first number identifies the classification of the type of account.  Which of the following indicates the use of this classification? 
A. 1-Assets, 2-Liabilities, 3-Stockholders’ Equity, 4-Expenses, 5-Revenues
B. 1-Assets, 2-Liabilities, 3-Stockholders’ Equity, 4-Revenues, 5-Expenses
C. 1-Assets, 2-Stockholders’ Equity, 3-Revenues, 4-Expenses, 5-Dividends
D. 1-Stockholders’ Equity, 2-Dividends, 3-Revenues, 4-Expenses

103. Which of the following is not a correct rule of debits and credits?  
A. assets, expenses, and dividends are increased by debits
B. assets are decreased by credits and have a normal debit balance
C. liabilities, revenues, and retained earnings are increased by credits
D. the normal balance for revenues and expenses is a credit

104. The ____ is where a transaction can first be found on the accounting records. 
A. chart of accounts
B. income statement
C. balance sheet
D. journal

105. A debit may signify a(n) 
A. decrease in an asset account
B. decrease in a liability account
C. increase in the retained earnings account
D. decrease in the dividends account

106. Which of the following types of accounts have a normal credit balance? 
A. assets and liabilities
B. liabilities and expenses
C. revenues and liabilities
D. capital stock and dividends

107. Which of the following groups of accounts have a normal debit balance? 
A. revenues, liabilities
B. assets, liabilities
C. liabilities, expenses
D. assets, expenses

108. Which one of the statements below is not a purpose for the journal? 
A. to show increases and decreases in accounts
B. to show a chronological order by date
C. to show a complete transaction in one place
D. to help locate errors

109. A credit may signify a 
A. decrease in assets
B. decrease in liabilities
C. decrease in retained earnings
D. decrease in revenue

110. A debit signifies a decrease in 
A. assets
B. expenses
C. dividends
D. revenues

111. Which of the following applications of the rules of debit and credit is true? 
A. decrease Prepaid Insurance with a credit and the normal balance is a credit
B. increase Accounts Payable with a credit and the normal balance is a debit
C. increase Supplies Expense with a debit and the normal balance is a debit
D. decrease Cash with a debit and the normal balance is a credit

112. Which of the following describes the classification and normal balance of the fees earned account? 
A. an asset with a credit balance
B. a liability with a credit balance
C. an expense with a debit balance
D. a revenue with a credit balance

113. The classification and normal balance of the accounts payable account is 
A. an asset with a credit balance
B. a liability with a credit balance
C. an asset with a debit balance
D. an expense with a debit balance

114. The classification and normal balance of the dividends account is 
A. an expense with a credit balance
B. an expense with a debit balance
C. a liability with a credit balance
D. a stockholders’ equity item with a debit balance

115. The classification and normal balance of the supplies expense account is a(n) 
A. asset with a debit balance
B. asset with a credit balance
C. expense with a debit balance
D. liability with a credit balance

116. In which of the following types of accounts are increases recorded by debits? 
A. assets, liabilities
B. dividends, liabilities
C. expenses, liabilities
D. assets, expenses

117. In which of the following types of accounts are increases recorded by credits? 
A. revenues, liabilities
B. dividends, assets
C. liabilities, dividends
D. expenses, liabilities

118. In which of the following types of accounts are decreases recorded by debits? 
A. assets
B. revenues
C. expenses
D. dividends

119. In which of the following types of accounts are decreases recorded by credits? 
A. liabilities
B. retained earnings
C. dividends
D. revenues

120. A credit balance in which of the following accounts would indicate a likely error? 
A. Fees Earned
B. Salary Expense
C. Retained Earnings
D. Accounts Payable

121. A debit balance in which of the following accounts would indicate a likely error? 
A. Salaries Expense
B. Notes Payable
C. Dividends
D. Supplies

122. Which of the following entries records the payment of an account payable? 
A. debit Cash; credit Accounts Payable
B. debit Accounts Receivable; credit Cash
C. debit Cash; credit Supplies Expense
D. debit Accounts Payable; credit Cash

123. Which of the following entries records the receipt of a utility bill from the water company? 
A. debit Utilities Expense; credit Accounts Payable
B. debit Utilities Payable; credit Accounts Receivable
C. debit Accounts Payable; credit Cash
D. debit Accounts Payable; credit Utilities Payable

124. Which of the following entries records the cash sale of capital stock to stockholders? 
A. debit Capital Stock; credit Cash
B. debit Cash; credit Capital Stock
C. debit Cash; credit Revenue
D. debit Revenue; credit Cash

125. Office supplies were sold by Ari’s Alarm Service at cost to another repair shop, with cash received.  Which of the following entries for Ari’s Alarm Service records this transaction? 
A. Office Supplies, debit; Cash, credit
B. Office Supplies, debit; Accounts Payable, credit
C. Cash, debit; Office Supplies, credit
D. Accounts Payable, debit; Office Supplies, credit

126. Office supplies purchased by Ari’s Alarm Service on account were returned.  Which of the following entries for Ari’s Alarm Service records this transaction? 
A. Cash, debit; Office Supplies, credit
B. Office Supplies, debit; Accounts Receivable, credit
C. Accounts Payable, debit; Office Supplies, credit
D. Office Supplies, debit; Accounts Payable, credit

127. Cash was paid by Ari’s Alarm Service to creditors on account.  Which of the following entries for Ari’s Alarm Service records this transaction? 
A. Cash, debit; Retained Earnings, credit
B. Accounts Payable, debit; Cash, credit
C. Accounts Receivable, debit; Cash, credit
D. Accounts Payable, debit; Account Receivable, credit

128. The process of initially recording a business transaction is called 
A. trial balancing
B. posting
C. journalizing
D. balancing

129. Which of the following entries records the acquisition of office supplies on account? 
A. Office Supplies, debit; Cash, credit
B. Cash, debit; Office Supplies, credit
C. Office Supplies, debit; Accounts Payable, credit
D. Accounts Receivable, debit; Office Supplies, credit

130. Which of the following entries records the payment of rent for the current month? 
A. Cash, debit; Rent Expense, credit
B. Rent Expense, debit; Cash, credit
C. Rent Expense, debit; Accounts Receivable, credit
D. Accounts Payable, debit; Rent Expense, credit

131. Which of the following entries records the receipt of cash from patients on account? 
A. Accounts Payable, debit; Fees Earned, credit
B. Accounts Receivable, debit; Fees Earned, credit
C. Accounts Receivable, debit; Cash, credit
D. Cash, debit; Accounts Receivable, credit

132. Which of the following entries records the collection of cash from cash customers? 
A. Fees Earned, debit; Cash, credit
B. Fees Earned, debit; Accounts Receivable, credit
C. Cash, debit; Fees Earned, credit
D. Accounts Receivable, debit; Fees Earned, credit

133. Which of the following entries records the receipt of cash for two months’ rent? The cash was received in advance of providing the service. 
A. Prepaid Rent, debit; Rent Revenue, credit.
B. Cash, debit; Unearned Rent, credit.
C. Cash, debit; Prepaid Rent, credit.
D. Cash, debit; Rent Expense credit.

134. A patient has a physical examination and asks the bookkeeper to mail the bill.  The bookkeeper should 
A. make no entry until the cash is received
B. Cash, debit; Accounts Receivable, credit
C. Cash, debit; Fees Earned, credit
D. Accounts Receivable, debit; Fees Earned, credit

135. Prarie Clinic purchased X-ray equipment for $4,000, paid $1,275 down, with the remainder to be paid later.  The correct entry would be
 
A. Equipment                 1,275
      Cash                                           1,275
B. Cash                                       1,275
Accounts Payable                    2,725
      Equipment                                   4,000
C. Equipment Expense                  4,000
      Accounts Payable                         1,275
      Cash      2,725     
 Equipment                       4,000
      Accounts Payable                         2,725
      Cash                                            1,275

136. The process of recording a transaction in the journal is called 
A. recording
 journalizing
C. posting
D. summarizing

137. Scott, Inc. sold $65,000 of stock.  How would this transaction be entered in the journal? 
 Cash                                65,000
         Capital Stock                65,000
            Sold stock for cash.
B. Cash                            65,000
      Capital Stock                      65,000
            Sold stock for cash.
C. Capital Stock      65,000
        Cash                                     65,000
               Sold stock for cash.
D. Capital Stock           65,000
      Cash                 65,000
         Sold stock for cash.

138.

139.

140.

141.

142. Which of the following accounts would be increased with a credit? 
A. Land, Accounts Payable, Dividends
 Accounts Payable, Unearned Revenue, Capital Stock
C. Capital Stock, Accounts Receivable, Unearned Revenue
D. Cash, Accounts Receivable, Capital Stock

143. In accordance with the rules of debit and credit, which of the following is true? 
 Debits increase assets.
B. Credits increase assets.
C. Debits increase both assets and retained earnings.
D. Credits increase both assets and liabilities.

144. All of the following accounts are increased with a debit  
 Unearned Revenues
B. Land
C. Accounts Receivable
D. Cash

145. Which of the following stockholder equity accounts follow the same debit and credit rules as liabilities? 
A. Capital Stock only
B. Dividends only
 Retained Earnings and Capital Stock
D. Retained Earnings, Capital Stock, and Dividends

146. The payment for the monthly rent will require which of the following entries? 
A. debit Cash and debit Rent Expense
B. credit Cash and credit Rent Expense
 debit Rent Expense and credit Cash
D. credit Rent Expense and debit Cash

147. Expenses follow the same debit and credit rules as 
A. revenues
 dividends
C. capital stock
D. liabilities

148. Net income will result when 
 revenues (credits) > expenses (debits)
B. revenues (debits) > expenses (credits)
C. expenses (credits) < revenues (debits) D. revenues (credits) = expenses (debits) 149. Which of the following will increase retained earnings?  A. Expenses > revenues.
B. Dividends are declared and paid.
 Revenues > expenses.
D. Cash is received from customers on account.

150. Which of the following will decrease retained earnings? 
A. Supplies are purchased on account.
 Dividends are declared and paid.
C. Cash is received from customers.
D. Payment is made on an accounts payable.

151. Which of the following group of accounts are increased with a debit? 
A. assets, liabilities, stockholders’ equity
 assets, dividends, expenses
C. assets, revenues, expenses
D. assets, liabilities, revenues

152. Which of the following accounts increase with a credit? 
A. capital stock, revenues, expenses
B. assets, capital stock, revenues
 liabilities, capital stock, revenues
D. retained earnings, capital stock, assets

153. Which of the following is true regarding normal balances of accounts? 
A. All accounts have a normal debit balance.
B. All expense accounts have a normal negative balance.
C. Accounts that have a normal debit balance will only have debit entries, never credit entries.
 The normal balance appears on the side of the account that also receives increase entries.

154. All of the following occur with a double-entry accounting system  
A. The accounting equation remains in balance.
B. The sum of all debits is always equal to the sum of all credits in each journal entry.
 Each business transaction will have only two entries.
D. Every transaction affects at least two accounts.

155.

156.

157. The verification that the total dollar amount of the debits equals the total dollar amount of the credits in the ledger is called a 
A. ledger
 trial balance
C. account
D. balance sheet

158. The process of transferring the debits and credits from the journal entries to the ledger accounts is called 
A. sliding
B. transposing
C. journalizing
 posting

159. The posting process will include the transfer of the following information from the journal to the account. 
A. date, amount (debit or credit)
 date, amount (debit or credit), journal page number
C. amount (debit or credit), account number
D. date, amount (debit or credit) account number

160. The Post. Ref. columns are used to trace transactions from the journal to the accounts.  What will be entered in the Post. Ref. column of (a) the journal and (b) the account? 
A. (a) the amount of the debit or credit (b) the journal page number
B. (a) the journal page number (b) the date of the transaction
C. (a) the journal page number, (b) the account number
 (a) the account number, (b) the journal page number

161. The chart of accounts for the Corning Corporation includes the following:
 

162. The chart of accounts for the Corning Corporation includes the following:
 

163. The chart of accounts for the Corning Corporation includes the following:
 

164. The chart of accounts for Miguel Corporation includes the following:
 

165. The chart of accounts for Miguel Corporation includes the following:
 

166. The accounts in the ledger of Monroe Entertainment Co. are listed below.  All accounts have normal balances.

167. Randomly listed below are the steps for preparing a trial balance:
 

168. Of the following, which will determine if the accounting equation is in balance? 
A. journal entry
B. income statement
 trial balance
D. account reconciliation

169. An overpayment error was discovered in computing and paying the wages of a Jamison Tree Trimming employee.  When Jamison receives cash from the employee for the amount of the overpayment, which of the following entries will Jamison make? 
 Cash, debit; Wages Expense, credit
B. Wages Payable, debit; Wages Expense, credit
C. Wages Expense, debit, Cash, credit
D. Cash, debit; Wages Payable, credit

170. If the two totals of a trial balance are not equal, it could be due to  
A. failure to record a transaction
B. recording the same erroneous amount for both the debit and the credit parts of a transaction
 an error in determining the account balances, such as a balance being incorrectly computed
D. recording the same transaction more than once

171. When a transposition error is made on the trial balance, the difference between the debit and credit totals on the trial balance will be 
A. zero
B. twice the amount of the transposition
C. one-half the amount of the transposition
 divisible by 9

172. Which of the following errors would cause the trial balance totals to be unequal? 
A. A transaction was not posted.
B. A payment of $67 for insurance was posted as a debit of $42 to Prepaid Insurance and a credit of $42 to Cash.
 A payment of $1,311 to a creditor was posted as a debit of $3,111 to Accounts Payable and a debit of $311 to Accounts Receivable.
D. Cash received from customers on account was posted as a debit of $680 to Cash and a credit of $680 to Accounts Payable.

173. Supplies purchased on account were incorrectly recorded as Office Equipment.  The correcting entry would be 
 Supplies, debit; Office Equipment, credit.
B. Accounts Receivable, debit; Supplies, credit.
C. Office Equipment, debit; Supplies Expense, credit.
D. Supplies, debit; Accounts Payable, credit.

174. Which of the following errors will cause the trial balance totals to be unequal? 
 post the debit portion of a journal entry incorrectly and the credit portion of the entry is correctly posted
B. failure to record a transaction or to post a transaction
C. recording the same transaction more than once
D. recording the same erroneous amount for both the debit and the credit parts of a transaction
E. posting a part of a transaction correctly as a debit or credit but to the wrong account

175. The trial balance is out of balance and the accountant suspects that a transposition or slide error has occurred.  What will the accountant do to find the error? 
A. Determine the amount of the error and look for that amount on the trial balance.
B. Determine the amount of the error and divide by two, then look for that amount on the trial balance.
C. Determine the amount of the error and refer to the journal entries for that amount.
 Determine the amount of the error and divide by nine. If the result is evenly divided, then this type of error is likely.

176. Which of the following is a short-cut in finding errors on the trial balance? 
A. Determine the difference between debits and credits and look for the amount.
 Determine the amount and change any account to make the trial balance correct.
C. Determine the difference between debits and credits, divide the amount by 2, look for the amount.
D. Determine the difference between debits and credits, divide the amount by 9, if it divides evenly, look for a transposition or slide error.

177. All of the following statements regarding a horizontal analysis are true  
A. A horizontal analysis is used to compare an item in a current statement with the same item in prior statements. 
 A horizontal analysis can be performed on a balance sheet and income statement, but not on a statement of cash flows.
C. If fees earned in 2010 are $150,000 and fees earned in 2011 are $187,500, a horizontal analysis will indicate a 25% increase over this period.
D. When two statements are compared in horizontal analysis, the earlier statement is used as the base for computing the amount and the percent of change.

178. The chart of accounts classifies the accounts to make identification of the accounts easier. Discuss how companies set up a chart of accounts for use in their business.