Accounting 1010 Test Chap 1 & 2
What kinds of transactions can be entered in a general journal?
Any business transaction.
Summarize activity by separating them into individual accounts
Ledger
Accounts Payable is in which account
Liability
Accrued Liability is in which account
Liability
Note Payable is in which account
Liability
Unearned Revenue is in which account
Liability
Amount a business earns in excess of all expenses and costs associated with its sales and revenues
Net income
Why are posting references entered in the journal when entries are posted to the ledger accounts?
So we know that the entry has been posted.
Accounting area that includes planning future transactions to minimize taxes paid
Tax accounting
Normal Balance for Owner Capital
Credit
Company Truck
Asset
Prepaid Advertisement
Asset
What are the three types of accounts
Asset Liability Equity
Accounts Receivable is in which account
Assets
Building is in which account
Assets
Cash is in which account
Assets
Equipment is in which account
Assets
Land is in which account
Assets
Note Receivable is in which account
Assets
Prepaid Account is in which account
Assets
Supplies is in which account
Assets
Examination of an organization's accounting system and records that adds credibility to financial statements
Audit
Assets are in which statement
Balance Sheet
Equipment is in which statement
Balance Sheet
Liabilities are in which statement
Balance Sheet
Owner's Equity carried over is in which statement
Balance Sheet
Normal Balance for Revenue
Credit
Cash carried over
Cash Flows
Finance is in which statement
Cash Flows
Investing is in which statemet
Cash Flows
Operating Activity is in which statement
Cash Flows
Decrease side for Assets
Credit
Decrease side for Expense
Credit
Decrease side for Owner Withdraw
Credit
Increase side for Liabilities
Credit
Increase side for Owner Capital
Credit
Increase side for Revenue
Credit
Normal Balance for Liabilities
Credit
Decrease side for Liabilities
Debit
Decrease side for Owner Capital
Debit
Decrease side for Revenue
Debit
Increase side for Assets
Debit
Increase side for Expense
Debit
Increase side for Owner Withdraw
Debit
Normal Balance for Assets
Debit
Normal Balance for Expense
Debit
Normal Balance for Owner Withdraw
Debit
Expense is in which account
Equity
Owner, capital is in which account
Equity
Revenue is in which account
Equity
Utility Expense
Equity
owner, withdraw is in which account
Equity
Principles that determine whether an action is right or wrong
Ethics
T/F The account activity in the general ledger is posted to the journal.
False
Chronological catalog of activity
General Journal
Expense is in which statement
Income
Net income is in which statement
Income
Revenue is in which statement
Income
true statements about accounts receivables
Is decreased when payments are received from credit customers. is increased with a debit is increased when credit sales are made reflects the amount of money still owed by customers
Capital is in which statement
Owner's Equity
Net income carried over is in which statement
Owner's Equity
Withdraws are in which statement
Owner's Equity
Accounting professionals who provide services to many clients
Public Accountants
what happens when an owner of a business withdraws $100 from the business checking account for personal use
owner, withdrawals would be increased and total Equity would decrease as well
T/F The ledger is what you reference if you want to assess the balance in an account.
True
Alex invested $30,000 in cash in his business. How will this entry be posted in the ledger accounts?
Will be posted to the debit side of the Cash account. Will be posted to the credit side of the Owner's account.
a journal is
a book of original entry that includes a chronological record of all transactions that have occurred within a business during a period occurred
a general ledger is
a collection of all accounts with their activity and balances that exist in a business
a chart of accounts is
a list of all ledger accounts which exist in a business and includes an identification number assigned to each account
a trial balance is
a list of each account and its balance at any given time and is used to verify that debits equal credits
revenues cause Equity to increase and they are increased on the left / right of the t-account
right
General Ledger-what does it do
summarize activity by account
accounts receivable is an
asset
what happens to the assets and equity when an owner withdraws $50 from the business for personal use
assets are decreased and Equity is decreased
what are liabilities
claims against the assets of a business
which of the following would be considered cash and reflect in a company's cash account coin checks prepaid insurance notes receivable money orders
coin, checks, money orders note: notes receivable is an asset but not cash
accounts payable is a credit or debit balance
credit
an owner started a business and invested $4,000 illustrate how to record the transaction in the T accounts by completing the following sentence the cash account would be debited / credited on the left / right of the t account and the owner, capital account would be credited / debited on the left / right of the t account
debited, left credited, right
since expenses are the cost of doing business and cause Equity to( increase / decrease,) expenses are increased on the (right / left )of their t-account
decrease, left
in order name the steps for entering a transaction in the journal
enter date of transaction in the date column enter titles of accounts debited enter titles of accounts credited enter a brief explanation of the transaction
service Revenue, sales, fees earned are all
examples of Revenue
name the order of how the financial statements are linked
income statement, statement of owner's equity, balance sheet, cash flow
revenues cause Equity to (increase or decrease) and they increase on the( left / right ) side of the t-account
increase, right
what are creditors
individuals or organizations that have rights to receive payments from a business
correct definition of owner's equity
owner's equity is the owners claim on a company's assets
if a business owner invests in additional $100 from a personal checking account what happens to the equity
owner, capital would be increased and total Equity would also increase
what are expenses
the costs of doing business
what do interest Revenue, professional fees earned, and sales have in common
they are only Revenue accounts
what do rent expense, wages expense, Insurance expense have in common
they are only expense accounts
what are assets
things of value owned by a business