Chapter 3 Concepts
True or false: When analyzing a transaction using a T account, increases for all accounts are shown on the left-hand column. True false question.
False
True or false: A list of the accounts used by a business to record financial transactions is called the trial balance.
False A list of accounts used by a business to record its financial transaction is called the chart of accounts.
Fill in the blank question. A company purchased office supplies for $500 in cash. This transaction would debit the __________ account, and credit the __________ account.
supplies; cash
Identify which of the following correctly describes a T-Account. Referred to as a T-account because of its relationship to transactions. Increases to accounts are recorded on the left hand column. Accountants use T accounts to analyze transactions. Consists of a vertical line and a horizontal line that resembles the letter T. The name of the account is written on the horizontal (top) line.
Accountants use T accounts to analyze transactions. Consists of a vertical line and a horizontal line that resembles the letter T. The name of the account is written on the horizontal (top) line.
Identify which of the following correctly describes a T-Account. (Check all that apply). - The name of the account is written on the horizontal (top) line. - Referred to as a T-account because of its relationship to transactions. - Increases to accounts are recorded on the left hand column. - Accountants use T accounts to analyze transactions. - Consists of a vertical line and a horizontal line that resembles the letter T.
The name of the account is written on the horizontal (top) line. Accountants use T accounts to analyze transactions. Consists of a vertical line and a horizontal line that resembles the letter T.
True or false: Permanent accounts, such as accounts receivable, are kept open from one accounting period to the next.
True
Black Consulting Company purchased equipment for $5,000. This amount is to be paid in 60 days. This transaction would be recorded with a credit entry to the ________ account. equipment equipment expense accounts payable cash
accounts payable
Speedy Delivery Company completed a delivery and billed the customer for $980. This transaction would be recorded with a debit entry on the left-hand side of which account: fees income accounts receivable delivery expense cash
accounts receivable
Speedy Delivery Company completed a delivery and billed the customer for $980. This transaction would be recorded with a debit entry on the left-hand side of which account: fees income delivery expense accounts receivable cash
accounts receivable
Which of the following are correct steps to calculate the balance of an account? record the balance on the side that has the smaller total add the figures on each side of the account enter the total in small pencil figures called a footing add the two footing balances together
add the figures on each side of the account enter the total in small pencil figures called a footing
Identify the correct statements: assets increase on the left (debit) side owner's equity decrease on the left (debit) side liabilities decrease on the right (credit) side liabilities increase on the right (credit) side
assets increase on the left (debit) side owner's equity decrease on the left (debit) side liabilities increase on the right (credit) side
The owner's capital account appears on which two financial statements? income statement balance sheet statement of owner's equity
balance sheet statement of owner's equity
Helen Jone's Hair Salon collects $800 cash for services provided during the day. This transaction would be recorded with a debit entry on the left-hand side of which account: accounts receivable fees income Helen Jone's, Capital cash
cash
Identify which of the following accounts are permanent accounts: cash wages expense withdrawals accounts payable prepaid rent
cash accounts payable prepaid rent
A list of the accounts used by a business to record its financial transactions is called the _________________. chart of accounts T account trial balance double-entry system
chart of accounts
An entry on the right-hand side of a T account is called a: debit credit increase decrease
credit
A company collected $200 cash from customers for services provided. This transaction would (debit/credit) _________ the fees earned account, and debit/credit ___________ the cash account.
credit; debit
A company purchased equipment for $2,000 in cash. This transaction would (debit/credit) __________ the cash account, and (debit/credit) ___________ the equipment account.
credit; debit
A company completed services and billed customers for $800. This transaction would (debit/credit) ____________ the accounts receivable account, and (debit/credit) ____________ the fees income account.
debit; credit
A(n) (increase/decrease) _________ to the supplies account is shown on the right-hand side of the T account.
decrease
A(n) (increase/decrease) __________ to the fees earned account is shown on the left-hand side of the T account.
decrease
A(n) (increase/decrease) _____________ to the cash account is shown on the right-hand side of the T account.
decrease
An (increase/decrease) ___________ to the accounts receivable account is shown on the right-hand side of the T account. Listen to the complete question
decrease
A special type of owner's equity account set up to record the owner's withdrawal of cash from the business is called the ___________ account.
drawing
A special type of owner's equity account set up to record the owner's withdrawal of cash from the business is called the ___________ account. drawing capital equity
drawing
Identify the correct steps to prepare a trial balance: list the accounts names in alphabetical order sum the total debits with total credits enter the ending balances of each account in the appropriate debit or credit column enter the trial balance heading total the debit column; total the credit column
enter the ending balances of each account in the appropriate debit or credit column enter the trial balance heading total the debit column; total the credit column
Turner Company purchased equipment for $2,500 in cash. This transaction would increase the _________ account: equipment purchases cash equipment expense
equipment
A company purchased equipment for $2,000 on account. The balance is due in 90 days. This transaction would debit the _____________ account, and credit the ____________ ___________ account.
equipment; accounts payable
A(n) (increase/decrease) ___________ to the accounts payable account is shown on the right-hand side of the T account. Listen to the complete question
increase
A(n) (increase/decrease) ____________ to an owner's capital account is shown on the right-hand side of the T account.
increase
A(n) (increase/decrease) ______________ to the equipment account is shown on the left-hand side of the T account.
increase
Debit entries are always made on the (left/right) __________-hand side of a T account.
left
The equipment account is always increased on the (left/right) ________-hand side of the T account.
left
The supplies account is always increased on the (left/right) ________-hand side of the T account.
left
The steps to analyze the effects of a business transaction include (select all that apply): make the entry in T-account form analyze the financial event apply the high-low rules for each account affected
make the entry in T-account form analyze the financial event
Identify the correct statement about the accounting equation: owner's equity increases on the right (credit) side assets increase on the right (credit) side liabilities increase on the left (debit) side
owner's equity increases on the right (credit) side
Net income appears on which two financial statements? statement of owner's equity income statement balance sheet
statement of owner's equity income statement
Fancy Painting Company purchased office supplies for $500 in cash. This transaction would be recorded with a debit to the _______ account. supplies accounts payable cash supplies expense
supplies
A statement that lists all accounts and related balances, that is prepared after transactions have been recorded, and which tests the accuracy of total debits and total credits is called the _____________. trial balance double-entry system balance sheet chart of accounts
trial balance
A statement to test the accuracy of total debits and credits after transactions have been recorded is called the __________ _________.
trial balance