Accounting chapter 2

Which of the following are stockholder equity accounts?

Retained earnings Common stock

Long issued 5,000 shares of stock for $10,000. Long used $2,000 of the proceeds to purchase supplies, and borrowed $8,000 cash from the bank. Long's total assets are

$18,000.

Clem Corporation issues 1,000 shares of common stock for $25,000. Clem purchased equipment for $10,000 by borrowing from the bank. Clem's total assets are Multiple choice question.

$35,000.

Liability accounts

Accounts Payable, Salaries Payable, Utilities Payable, and Taxes Payable

accounts recivable

Amount a business or an office is owed for goods and services

Asset accounts

Cash, Supplies, and Equipment

Which of the following accounts would appear in the credit column of a trial balance?

Common Stock

Stockholders' equity accounts

Common Stock and Retained Earnings

What effect does revenue have on retained earnings?

Increases

Which of the following includes the list of transactions affecting each individual account and the account's balance?

Ledger

The accounting equation is: Assets = Liabilities +

Stockholders' Equity

A(n) Blank______ is maintained for each financial statement item, whereas a(n) Blank______ contains all of the accounts of the company.

account; general ledger

A chronological record of all economic events affecting a firm are recorded in a(n)

journal

The process of transferring information from a journal entry to the specific accounts affected in the general ledger is referred to as

posting

The process of transferring information from the journal to the ledger is referred to as

posting.

A list of all accounts and their balances at a particular date showing that debits equal credits is referred to as a(n

trial balance

When a company performs services for a customer, and the customer agrees to pay for the services at a later date, the transaction is recorded in which account?

Accounts receivable

What effect does the payment of dividends have on the accounting equation?

Assets decrease and equity decreases

The two components of stockholders' equity are

common stock and retained earnings.

ever transition has a

debit and a credit

A transaction is initially recorded in the journal, and then subsequently posted to the general

ledger

A debit is on the

left

What does the word debit mean?

left

The purpose of a general ledger is to

provide in a single location the list of transactions affecting each account and the account's balance.

Ursula Company's bookkeeper records revenue relating to a customer transaction. This indicates that the company

provided goods or services to a customer.

The purpose of a journal is to

record a chronological listing of every transaction for a company.

The two basic components for calculating net income are

revenues and expenses.

If total assets decrease

then liabilities or stockholders' equity decreases by the same amount.

If total assets increase

then liabilities or stockholders' equity increases by the same amount

A list of all accounts and their balances at a particular date showing that debits equal credits is referred to as a(n)retained

trial balance

Credits increase revenues, whereas debits increase

expenses and dividends.