Chapter 3 Test Practice

Are your accounts receivable an asset or liability?

Asset

Is cash an asset or liability?

Asset

When revenue is earned from charge account sales, the accountant (A) debits a revenue account and credits the capital account. (B) debits Accounts Receivable and credits a revenue account or (C) debits a revenue account and credits Accounts Receivable.

B. debits Accounts Receivable and credits a revenue account

Credits are used to record (A) decreases in assets and owner's equity and increases in liabilities (B) decreases in assets, liabilities, and owner's equity or (C) increases in liabilities and owner's equity

C. increases in liabilities and owner's equity

If someone pays me for a service I provided last month, is that a debit entry or a credit entry to my A/R?

Credit

If I want to increase my accounts receivable is this a debit entry or a credit entry?

Debit

If I am increasing my expenses, is that a debit entry or a credit entry?

Debit (remember, if you are paying an expense, it would mean a credit to your cash account...every debit entry gets a credit entry)

An accounting system that involves recording the effects of each transaction as debits and credits.

Double-entry system

A special type of owner's equity account set up to record the owner's withdrawal of cash from the business.

Drawing account

If I pay a creditor that I owed for purchasing a computer last month, how do I record it in my payables?

It would be a debit entry to your payables.

Increases in assets are recorded on the _____ side of a T account

Left

An account whose balance is transferred to another account at the end of an accounting period.

Temporary Account

The difference between the amounts recorded on the two sides of an account is the ___ ___.

account balance

Separate written records called _______ are kept for each asset and liability and for the owner's equity of a business.

accounts

The difference between the amounts recorded on the two sides of an account is called the account _______.

balance

A firm's list of accounts is called its....

chart of accounts

The right side of a T account is the ______ side.

credit

I issued a check to a creditor, what accounts are debited and credited?

debited: accounts payable credited: cash

If I preformed services for cash, I debited _________ account and credited __________ account.

debited: cash credited: Fees income

Heidi Wilcox, the owner, made an additional investment of cash. What accounts are debited and credited?

debited: cash credited: H. Wilcox, capital

I purchased office equipment on credit. What accounts are debited and credited?

debited: office equipment credited: accounts payable

A small pencil figure written at the base of an amount column showing the sum of the entries in the column.

footing

When setting up a trial balance we use the ALORE to help us remember which accounts are listed first. What does the L stand for?

liabilities

The increase side of an account is called the _____ balance.

normal

an accounting error involving a misplaced decimal point is called a ___________.

slide

Revenue and expense accounts are called normal or ________ accounts.

temporary

A statement prepared to test the accuracy of the financial records is called a ____ _______.

trial balance