ACC - Chapter 2 Terms
General Ledger (ledger)
a record containing all accounts used by a company and their balances
Which of the following statements are true about the chart of accounts? (Select all that apply) a. Different companies use different charts of accounts based on individual company need b. The chart of accounts contains the balance of all of the accounts in a ledger c. The chart of accounts should be ordered in a logical sequence based on type of account d. The chart of accounts can be ordered in any sequence because they are not formal financial systems.
a, c
Liability Accounts
Accounts Payable, Salaries Payable, Utilities Payable, and Taxes Payable
Which of the following accounts is an asset? a. dividends b. prepaid advertising c. supplies expense d. accounts payable
B
Account
a detailed record of increases and decreases in a specific asset, liability, equity, revenue, or expense
Assets
resources owned by a business
Which of the following is a true statement about debits and credits? a. A debit always increases an account balance. b. A credit is on the right side of an account. c. A debit is on the right side of an account. d. A credit always decreases an account balance.
B
Which of the following statements are true about the general ledger? a. All companies will use the same general ledger accounts. b. The ledger contains the balance of all of the accounts in a chart of accounts. c. The general ledger contains all of the accounts that a company uses, along with detail of the balances in those accounts. d. The general ledger can be ordered in any sequence because they are not formal financial systems.
C
With double-entry accounting, each transaction requires: a. that at least three accounts are affected.unchecked b. that the total debits equal the total debits.unchecked c. that at least two accounts are affected.checked d. that the total debits will equal the total credits.
C, D
Asset Accounts
cash, accounts receivable, notes receivable, prepaid accounts, supplies, equipment, buildings, land
Liabilities
claims against a firm's assets by creditors
Equity Accounts
common stock, dividends, revenues, expenses
