Chapter 2 Quiz

Consider the following accounts and identify each as an asset​ (A), liability​ (L), or equity​ (E). 1. Rent Expense 2. Common Stock 3. Furniture 4. Service Revenue 5. Prepaid Insurance 6. Accounts Payable 7. Unearned Revenue 8. Notes Receivable 9. Dividends 10. Insurance Expense

1. Equity (E) 2. Equity (E) 3. Asset (A) 4. Equity (E) 5. Asset (A) 6. Liabilty (L) 7. Liabilty (L) 8. Asset (A) 9. Equity (E) 10. Equity (E)

The left side of an account is used to record which of the​ following? A. Debits B. Debit or​ credit, depending on the type of account C. Increases D. Credits

A. Debits

For each​ account, identify if the change would be recorded as a debit​ (DR) or credit​ (CR). 11. Increase to Cash 12. Decrease to Accounts Payable 13. Increase to Common Stock 14. Increase to Unearned Revenue 15. Decrease to Accounts Receivable 16. Increase to Interest Revenue 17. Increase to Rent Expense 18. Decrease to Office Supplies 19. Increase to Prepaid Rent 20. Increase to Notes Payable

11. DR 12. DR 13. CR 14. CR 15. CR 16. CR 17. DR 18. CR 19. DR 20. CR

Which of the following statements is​ correct? A. Prepaid Expenses are decreased with a debit. B. Rent Expense is increased with a credit. C. Accounts Payable is increased with a credit. D. Unearned Revenue is increased with a debit.

C. Accounts Payable is increased with a credit.

Your business purchased office supplies of​ $2,500 on account. The journal entry to record this transaction is as​ follows: A. Cash (Debit): 2,500 Accounts Payable (Credit): 2,500 B. Accounts Payable (Debit): 2,500 Office Supplies (Credit): 2,500 C. Office Supplies (Debit) 2,500 Accounts Receivable (Credit) 2,500 D. Office Supplies (Debit): 2,500 Accounts Payable (Credit): 2,500

D. Office Supplies (Debit): 2,500 Accounts Payable (Credit): 2,500

Which of the following accounts is a​ liability? A. Service Revenue B. Accounts Receivable C. Prepaid Rent Expense D. Unearned Revenue

D. Unearned Revenue

The detailed record of the changes in a particular​ asset, liability, or​ stockholders' equity is called A. a ledger. B. a journal. C. a trial balance. D. an account.

D. an account.