Accounting Chapter 3 Review

On January 14, Welsford Agency purchased supplies of $500 on account. The entry to record the purchase will include a debit to

Supplies and a credit to Accounts Payable.

When writing the title of an account, how is it formatted? Why?

The title is capitalized to indicate that it is a specific account name.

Which of the following is true in journalizing?

Titles of accounts must appropriately describe the content of the account.

Irregular entries represent

an unethical misstatement.

The first step in the recording process is to

analyze the transaction

The first step in transferring journal entry amounts to ledger accounts involves

entering in the appropriate ledger account the date and debit amount shown in the journal.

What is the entire group of accounts maintained by a company called?

general ledger

How must each transaction be recorded in the double-entry system?

in at least two different accounts

If the trial balance has total debits unequal to total credits, then

it is possible the wrong accounts were used in the journal entry.

When journalizing a transaction, a short explanation is written

on the line following each journal entry

What is a T-account?

the basic form of an account that aligns information in three parts

Which of the following statements about credits is true?

Credits decrease assets and increase liabilities.

When a company performs a service for which it has not been paid, it will create a(n)

account receivable

Which of the following describes the standard form of a journal entry?

The debit account is entered first at the extreme left margin.

After conducting a financial transaction, a company's accounting staff records a $1,000 decrease in a particular asset. In order for the accounting equation to balance, the accounting staff must also record which of the following things?

a $1,000 increase in a different asset

What is the usual order of accounts in the general ledger?

assets, liabilities, revenues, and expenses

Which of the following would be considered an economic event that requires an accounting transaction?

the purchase of new computers

Which of the following steps is NOT included in preparing a trial balance?

transferring journal amounts to ledger accounts

What is a list of accounts and their balances at a given time called?

trial balance