Accounting Chapter 2 - Connect

S. Sunshine received and paid for a utility bill of $50. Show how to record this transaction to the T-accounts by selecting the correct answer below.

$50 on left side of the Utility expense account; $50 on the right side of the Cash account.

S. Gunner purchased a piece of equipment costing $6,000. She paid $1,000 immediately and put the rest on account. Show how to record this transaction to the T-accounts by selecting the correct answer below.

$6,000 on left side of the Equipment account; $5,000 on the right side of the Accounts payable account; $1,000 on the right side of the Cash account.

You are entering a transaction in the journal. Place the following steps in the order that they would be entered in the journal.

1. Enter date of transaction in date column 2. Enter name of accounts debited and their amount 3. Enter name of accounts credited and their amounts 4. Enter explanation

Which of the following statements is accurate regarding the Building account?

A Building asset account is used to record the costs of purchasing a store, office, warehouse or factory.

Which statement best describes a T-account?

A T-account represents a ledger account and is a tool used to show the effects of one or more transactions.

Which of the following statements is (are) correct regarding a T-account? (Check all that apply.)

A T-account represents a ledger account. A T-account may be used as a tool to visualize the effects of a transaction. A T-account will show the debit and credit effects of transactions.

Choose the statement below that correctly explains a general journal.

A journal is a complete record of each transaction in one place and includes the debit and credit of each transaction.

Which of the following statements is (are) correct regarding the definition of a liability? (Check all that apply.)

A liability can be settled by transferring assets or providing products or services to others. A liability is a claim by creditors against the assets of a business. A liability is a debt owed by the business.

definition of a liability

A liability is a claim by a creditor against the assets of a business.

Best definition of Account

A record of increases and decreases in a specific asset, liability, equity, revenue, or expense.

Source Document

A source document identifies and describes transactions and is the basis for entering an event into the accounting system.

Which of the following statements is accurate regarding Accounts payable?

Accounts payable refer to promises to pay later, which may arise from the purchase of supplies or services.

True regarding notes receivable

Another name for a note receivable is a promissory note. Notes receivable is classified as an asset. It is the promise of another entity to pay a specific sum of money on a specified future date.

The Building account is a(n) (asset/liability/expense) account and is reported on the (left/right) side of the accounting equation.

Asset, Left

Equipment is a(n) (asset/liability/expense) account. It is reported on the (left/right) side of the accounting equation and is (increased/decreased) when equipment is purchased.

Asset, Left, Increased

Which of the following statements is the best definition of an asset?

Assets are resources owned or controlled by a company and that have expected future benefits.

Supplies are (assets/expenses/liabilities) until they are used. When they are used up, their costs are reported as (assets/expenses/liabilities).

Assets, Expense

When financial statements are prepared, unexpired prepaid accounts are recorded as (expenses/assets/liabilities) and the expired portion of the prepaid account is reported as a(n) (expense/asset/liability).

Assets, Expense

Examples of Assets

Building, cash, accounts receivable

Considered an Asset

Cash Building Accounts receivable Supplies

items that would be defined as cash.

Coins, checks, money orders

On Jan. 2, Callie Taylor purchased $300 worth of supplies. She paid $100 immediately, but put the rest on account. The journal entry to record this transaction in Callie Taylor's books would include which of the following? (Check all that apply.)

Credit Accounts payable for $200. Debit the Supplies account for $300. Credit the Cash account for $100.

The right side of a T-account is called the

Credit side

Select the statements below that are correct in regards to entering transactions in a journal. (Check all that apply.)

Credited accounts should be indented. Leave one blank line between each completed journal entry. Total dollar amount of debits must equal the total dollar amount of credits.

Which of the selections below includes all of the required information to be entered in a journal?

Date of transaction, explanation of transaction, debited and credited accounts, dollar amounts of debits and credits

Paul's Programming Services provided $1,000 of consulting services on credit. Show how to use T-accounts to record this transaction by selecting the correct answer below.

Debit Accounts Receivable; credit Consulting Revenue.

J. Jackson invested $1,000 in his business. Show how to use T-accounts to record this transaction by selecting the correct answer below.

Debit Cash; credit Owner, Capital.

The left side of a T-account is called the

Debit Side

On Jan. 2, Callie Taylor received a $700 payment from a customer previously billed for services performed. The journal entry to record this transaction would include a (debit, credit) to the BLANK account and a (debit, credit) to the Accounts Receivable account.

Debit, Cash, Credit

To enter transactions on the left side of a T-account means you will (debit/credit) the account and will cause a(n) (decrease/increase) in an asset account.

Debit, Increase

L. Lyons 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) side of the T-account and the Owner, Capital account would be (debited/credited) on the (left/right) side of the T-account.

Debited, Left, Credited, Right

Stan Smith purchased $8,000 of supplies on credit for his company. Show how to record this transaction to the T-accounts by selecting the correct answer below.

Enter $8,000 on left side of the Supplies account; enter $8,000 on the right side of the Accounts payable account.

Which of the following is a correct statement regarding the posting process?

Entries must be posted to the ledger before financial statements are prepared.

Which of the following statements is (are) accurate regarding equipment purchased within a business? (Check all that apply.)

Equipment is an asset. Equipment cost is initially recorded as an asset and the cost is allocated over time to expense. Equipment purchases are reported on the balance sheet. Equipment is reported on the left side of the accounting equation.

Which of the following accounts impact equity? (Check all that apply.)

Expenses Revenue Owner, Capital Owner, Withdrawal

Which of the following statements is correct regarding expenses.

Expenses are increased on the left side of their T-account because they decrease equity.

Which of the following statements is correct regarding the effect of debits and credits in accounts?

Expenses reduce equity, so to increase an expense account you would debit it.

Which set of accounts below would have a normal debit balance?

Expenses; Owner, Withdrawals; Cash

True or false: Assets are claims by creditors against the company.

False

True or false: The cost of land owned by a business is recorded in the Land account and this account is classified as an expense.

False- Land is an asset

Revenues cause equity to (decrease/increase) and they are increased on the (left/right) side of the T-account.

Increase, Left

From the lists of accounts below, which one contains only revenue accounts?

Interest revenue, Professional fees earned, Sales

A journal

It 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

It is a collection of all accounts and balances that exist in a business

A chart of Accounts

It is a list of all ledger accounts and includes an identification number assigned to each account

Which of the following statements is the best definition of the Chart of Accounts?

It is a list of all ledger accounts which exist in a business and includes an identification number assigned to each account.

A Trial Balance

It is a list of each account and its balance at any given time and is used to verify that debits = credits

Which of the following statements is (are) correct regarding the sides of a T-account? (Check all that apply.)

Liability accounts are increased on the right side. The left side is called the debit side. The right side is called the credit side. Asset accounts are increased on the left side.

There are several types of accounts that impact equity. Which of the accounts below cause equity to increase?

Owner's capital and revenues

Which of the following statements is the correct definition of owner's equity?

Owner's equity is the owner's claim on a company's assets.

The residual interest in the assets of a business after deducting the business's debts

Owners Equity

S. Gunner received $300 cash from a client that had been billed earlier in the month. Show how to record this transaction into T-accounts by selecting the correct answer below.

Place $300 on left side of the Cash account; place $300 on the right side of the Accounts receivable account.

Which of the following is correct regarding posting a transaction?

Posting means to transfer journal information to a ledger.

On Nov.1, L. Lyons pays $1000 cash for a 12-month insurance policy. Use your knowledge of what a correct journal entry should look like to identify what would be included in the correct journal entry

Prepaid Insurance would be debited and listed first Cash would be credited and listed second

Which of the following statements is correct about prepaid expenses?

Prepaid expenses are also called prepaid accounts and are considered assets.

Which of the following are examples of prepaid (expense) accounts? (Check all that apply.)

Prepaid insurance Prepaid rent

Which of the following lists of items contain only examples of prepaid (expense) accounts?

Prepaid rent, prepaid insurance

Which of the following accounts are examples of expenses? (Check all that apply.)

Rent Expense Insurance Expense

From the following lists of accounts, choose the list(s) which contains only expense accounts.

Rent expense, salaries expense, insurance expense

Which of the following statements about revenues is correct?

Revenues cause equity to increase, and they are increased on the right side of the T-account.

Which of the following accounts are examples of revenues? (Check all that apply.)

Sales Service revenue Fees earned

Which of the following would be considered a source document in an accounting system? (Check all that apply.)

Sales receipt Payroll records Checks Purchase order

Which of the following statements are accurate regarding supplies? (Check all that apply.)

Supplies are assets until they are used. When supplies are purchased, they are added to the Supplies account. Unused supplies can be recorded as Store Supplies, Office Supplies or Supplies. Unused supplies are treated as assets.

On Nov.1, L. Lyons pays $2,400 cash for supplies. Show how to use T-accounts to record this transaction by selecting the correct answer below.

Supplies would be debited, and Cash would be credited.

Which of the following statements is accurate about the Land account? (Check all that apply.)

The Land account is increased on the left side of its T-account. The Land account is used to record the costs of land purchased by the business. The Land account is an asset.

Which of the following statements is (are) correct regarding the Owner, Capital account?

The Owner, Capital account is increased on the right side of the T-account. The Owner, Capital account is used to record investments by the owner. The Owner, Capital account is an equity account.

Which of the following best and fully describes a general ledger?

The general ledger is a record containing all accounts used by a company.

Which of the following statements is (are) correct regarding the posting process? (Check all that apply.)

The posting process creates a link between the ledger and the journal. Entries must be posted to the ledger before financial statements are prepared. Entries are posted as soon as possible. The posting process does not require detailed explanations in the ledger.

Which of the following statements is (are) correct regarding the effect of debiting or crediting accounts?

To decrease an asset, you would credit it. To increase the Withdrawals account, you would debit it. To increase an expense account, you would debit it. To reduce Accounts payable, you would debit it To reduce Cash, you would credit it.

Which of the following statements is (are) correct regarding a journal? (Check all that apply.)

Transactions are generally entered in chronological order. A journal is used to record business transactions. In a journal, both the debit and credit side of the transaction can be seen.

Choose the account(s) below, that would have a normal credit balance. (Check all that apply).

Unearned Revenues Accounts Payable Owner's capital Revenues

An account is

a record of increases and decreases , in a specific asset, liability, equity, revenue or expense.

Notes receivable is considered a(n)

asset

The general ledger can be used to determine which of the following: (Check all answers which apply)

common and unique accounts used by a business. all accounts used by a company and their balances. increases and decreases in all accounts in a business.

J. Brown purchased $900 of supplies on credit. Illustrate how to record the transaction to T-accounts by completing the following sentence. Accounts payable would be (debited,/credited) on the (left/right) side of the T-account, and Supplies would be (debited/credited) on the side of the T-account.

credited, right, debited, left

Holt Computer Services received $200 from a customer that it had billed earlier in the month. Illustrate how to record the transaction to the T-accounts by completing the following sentence. Accounts receivable would be (debited/credited) on the (left/right) side of the T-account, and Cash would be (debited/credited) on the (left/right) side of the T-account.

credited; right; debited; left

J. Brown provided services to a customer and immediately collected $1,900 cash. Show how to record the transactions to the T-accounts by completing the following sentence.Service Revenue would be _____________ (debited/credited) on the ___________________ (left/right) side of the T-account, and Cash would be ______________ (debited/credited) on the ___________ (left/right) side of the T-account.

credited; right; debited; left

On Jan. 2, Callie Taylor performed $800 worth of services for a client. The client paid $100 immediately, but promised to pay the balance next month. The journal entry to record this transaction in Callie Taylor's books would be

debit cash $100, debit receivables $700 and credit sales $800

When entering a transaction into a general journal, the entry would be dated; then the accounts (debited/credited) would be listed first; then the accounts (debited/credited) would be listed next.

debited, credited

J. Brown paid his only employee his weekly wages of $400. Show how to record the transaction to the T-accounts by completing the following sentence. The Wages expense account would be debited/credited) on the (left/right) side of the T-account, and the Cash account would be (debited/credited) on the (left/right) side of the T-account.

debited, left, credited, right

Holt Computer Services purchased $2,000 of new equipment and paid immediately. Illustrate how to record the transaction into T-accounts of Holt Services by completing the following sentence.

debited; left; credited; right

P. Butter purchased $300 of supplies fro cash. Illustrate how to record the transaction into T-accounts by completing the following sentence.The Supplies would be ____________ (debited/credited) on the _____________ (left/right) side of the T-account and the Cash account would be ________ (debited/credited) on the ___________ (left/right) side of the T-account.

debited; left; credited; right

R&R Programming pays a $900 supply bill that it had received earlier in the month. Illustrate how to record the transaction to the T-accounts by completing the following sentence.Accounts payable would be ____________ (debited/credited) on the ______________(left/right) side of the T-account, and Cash would be __________(debited/credited) on the (left/right) side of the T-account.

debited; left; credited; right

Since expenses are the costs of doing business and cause equity to (increase/decrease), expenses are increased on the (right/left) side of their T-account.

decrease, left

After entering a transaction into the accounting equation, an increase in total assets can be accompanied by a(n) (increase/decrease) in total liabilities or equity. Listen to the complete question

increase

To debit an account means to enter transactions on the

left side of a T-account.

Accounts payable refer to promises to pay later by the business and are classified as (asset/liability/expense) account.

liability

transferring entries from the journal to the ledger is called

posting

True or false: The revenue recognition principle states that revenue should be recorded in the period in which it is earned which may or may not be the period in which payment was actually received.

true