ACCT Chapter 2 Quizzes

The payment for advertising costs for a monthly advertising campaign in the current month would include a: a) debit to Advertising Expense b) debit to Cash c) credit to Advertising Revenue d) debit to Prepaid Advertising

(a) debit to Advertising Expense DOUBLE CHECK THIS ONE!!

Which transaction decreases stockholders' equity? a) employees worked one week and were paid at the end of the week b) purchase inventory on account c) provided services on account d) provided services and received cash from the customer immediately

(a) employees worked one week and were paid at the end of the week

Which accounts are increased by debits? a) Salaries Expense and Common Stock b) Accounts Receivable and Utilities Expense c) Cash and Accounts Payable d) Accounts Payable and Service Revenue

(b) Accounts Receivable and Utilities Expense

A company received cash and issued stock to a new stockholder. In recording this transaction: a) Retained Earnings would be credited b) Cash would be debited c) Cash would be credited d) Common Stock would be debited

(b) Cash would be debited

A company received $30,000 cash and issued common stock in exchange. In transaction analysis, how does this transaction affect the accounting equation? a) add $30,000 to Dividends and subtract $30,000 from Retained Earnings b) add $30,000 to Cash and add $30,000 to Common Stock c) add $30,000 to Cash and add $30,000 to Retained Earnings d) add $30,000 to Cash and add $30,000 to Revenue

(b) add $30,000 to Cash and add $30,000 to Common Stock

Purchasing supplies on account would: a) increase total assets and decrease total liabilities b) increase total assets and increase total liabilities c) increase total liabilities and decrease total assets d) increase total liabilities and increase stockholders' equity

(b) increase total assets and increase total liabilities

An account will have a debit balance if: a) it is a liability account b) the amount of the debits exceeds the amount of the credits c) the account has more debit entries than credit entries d) the amount of the credits exceeds the amount of the debits

(b) the amount of the debits exceeds the amount of the credits

Which of the following statements about the rules of debit and credit is CORRECT? a) a liability is increased by a debit b) dividends are decreased by debits c) revenue is increased by a credit d) an asset is increased by a credit

(c) revenue is increased by a credit

A company performed tax services for a client on account. The amount billed to the client was $6,000. In transaction analysis, how does this transaction affect the accounting equation? a) add $6,000 to Cash and add $6,000 to Retained Earnings b) add $6,000 to Accounts Payable and add $6,000 to Service Revenue c) ad $6,000 to Cash and add $6,000 to Service Revenue d) add $6,000 to Accounts Receivable and add $6,000 to Retained Earnings

(d) add $6,000 to Accounts Receivable and add $6,000 to Retained Earnings

The left side of a T account is always the: a) credit side b) decrease side c) increase side d) debit side

(d) debit side