Quick Qs #2

The journal entry to record the paying back of amounts borrowed previously include all of the following _____

Debit Notes Payable and Credit Cash

A company received $2000 of equipment and promised to pay for it next month. The increase in equipment would be recorded with a ? to the Equipment Account

Debit

Trial balance

after posting (Excel File) #3/3 of sequence

The payment of amounts previously borrowed will be recorded on the ______ side of the Notes Payable T-account.

debit

Mauricio, the owner of Pizza Aroma, spent $2,500 of his own money to take his family to Disney World. Because of the separate-entity assumption, Pizza Aroma's financial statements will report

nothing about this trip

The separate entity assumption assumes the balance sheet of a corporation reports Blank

only the results of the business's activities

Debit means

left

The beginning balance in Accounts Payable was $4,000 and $100 of supplies were purchased on account. If the ending balance in Accounts Payable is $3,400, then the amount paid for supplies purchased on account was ______ and is found on the ______ of the Accounts Payable T-account.

$700; Debit Reason: $4,000 beginning balance + $100 purchases on account - payments = $3,400 ending balance. Payments equal $700 (= $4,000 + 100 - 3,400). Payments reduce Accounts Payable and thus are on the debit side of the T-account.

Every transaction has at least Blank______ effect(s) on the basic accounting equation.

2

What is the T account equation?

Beginning Balance + Purchases - Cash Payments = End Balance

Using the Accounts Payable T-account, which formula is the correct formula to solve for the amount of purchases on account?

Ending Accounts Payable + Payments - Beginning Accounts Payable

In accounting, credit entries are always good.

False Reason: Credit entries are simply right-sided entries and are neither good nor bad. They could represent decreases in assets or increases in liabilities or stockholders' equity.

When a business issues common stock, what does it give to its owners?

Stock certificates

MMM Pizza bought $1,500 of supplies on account. What is the effect of recording this transaction on the company's total assets?

Total assets will increase

Financing Activity

borrowing/repaying debt including short term bank loans, issuing/rebuying stock, and paying dividends

Investing Activity

buying/selling non current assets and short/long/term investments

A company typically receives ____ , an asset, when it issues stock to its owners.

cash, money, or capital

Journaling

chronological order of transactions book of original entry (Diary) #1/3 out of sequence

The trial balance is an internal report used to determine whether total debits ____ total credits.

equal

When a company gives common stock to an investor, the effect is to

increase stockholders equity

Ledger

keeps track of changes in each account (Dictionary) #2/3 of sequence

The Cash T-account is increased with an entry on the ? side of the T-account.

left

Accounts Payable is increased with an entry on the _____ side of the T-account.

right

The Mortgage Payable account is increased with an entry on the ? side of the T-account.

right

Posting

transferring information from a journal entry to a ledger account

The ____ balance is an internal report used to determine whether total debits equals total credits.

trial