Ch.2 smartbook homework(accounting)

If a transaction decreases cash by $100, the balance sheet will balance if which of the following occurs?

-A liability is decreased -Another asset is increased

Dividends paid to stockholders will cause retained earnings to...

decrease

Expenses will cause retained earnings to

decrease

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

provided goods or services to a customer

Consistent with the________________recognition principle, companies record revenue at the time goods are provided to customers.

revenue

The two roles of financial accounting are to:

- communicate information to external parties for decision making purposes - measure business activities of the company

The types of accounts which affect retained earnings are...

- dividends - revenues - expenses

Price Company provides cleaning services to customers for $10,000 cash. What are the effects of this transaction on the accounting equation?

-Increase retained earnings -Increase assets

Rawlings Corp. borrows $3,000 on a note payable from Third National Bank. Which of the following is used to record this transaction?

Debit cash $3,000; credit note payable $3,000.

Computerized system

Journal entries are instantly posted to the general ledger

Which of the following represents a common advantage of a computerized accounting system?

Journal entries are instantly posted to the ledger

Manual system

Journal entries are posted periodically to the general ledger

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

Ledger

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 is the effect of dividends on retained earnings?

decrease

An_____________transaction involves an exchange between the company and a separate economic entity.

external

True or false: A balance sheet is a list of all accounts and their balances showing that debits equals credits

false Reason: A trial balance is a list of all accounts and their balances showing debits equals credits. A balance sheet presents assets, liabilities, and stockholders' equity.

True or false: The two functions of financial accounting are to measure business activities and prepare tax returns.

false Reason: The two functions of financial accounting are to measure business activities and communicate those measurements to external parties for decision-making purposes.

Which of the following contains a list of transactions affecting each account and the account's balance?

general ledger

Revenues cause retained earnings to...

increase

Net income _________ retained earnings.

increases

What is the effect of net income on retained earnings?

increases retained earnings

What effect does revenue have on retained earnings?

it increases

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

posting

A simplified version that is used informally for analysis instead of drawing a formal general ledger account is referred to as a:

t-account

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

trail balance

Indigo Company's journal reveals that equipment was debited and notes payable was credited, both for $10,000. Indigo Company must have...

purchased equipment and signed a note for the purchase price

True or false: An external transaction is a transaction the firm conducts with a separate economic entity.

true

True or false: The accounting equation must always remain in balance.

true

Farmer, Inc. purchases a tractor for $80,000 cash. Recording this transaction will require which of the following?

-Credit cash -Debit equipment

Geo Corporation issues stock to investors for $100,000. Recording this transaction will include which of the following?

-Credit common stock -Debit to cash

Pluto Inc. borrows $3,000 from Second National Bank by signing a promissory note. Recording this transaction will include which of the following?

-Debit cash -Credit note payable

The type of information included in an account includes

-columns for debits and credits. -the account title.

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

account; general ledger

Tabor Company issues $20,000 of common stock to investors. Recording this transaction will include a credit to...

common stock

True or false: A balance sheet is a list of all accounts and their balances showing that debits equals credits.

false Reason: A trial balance is a list of all accounts and their balances showing debits equals credits. A balance sheet presents assets, liabilities, and stockholders' equity.