ACCT 2301 Chapter 13 LearnSmart The Double-Entry Accounting System

The left side of a T-account is the _______ side and the right side of a T-account is the _______ side. (Enter only one word per blank.)

debit credit

The payment of an accounts payable is recorded on the _______ side of the Cash T-account and the _______ side of the Accounts Payable T-account. (Enter either left or right in each blank.)

right left

Which of the following statements is true? Multiple choice question. Credit entries decrease asset and liability account balances. Credit entries increase asset account balances, but decrease liability account balances. Debit entries increase asset account balances, but decrease liability account balances. Debit entries increase asset and liability account balances.

Debit entries increase asset account balances, but decrease liability account balances.

True or false: In January of Year 1 a company made a journal entry that debited Supplies for $1,000. On December 31, the company has $250 worth of supplies on hand. The company needs to make an adjusting entry that debits Supplies for $750.

False

True or false: Salaries and other expenses are recorded as debits to the Retained Earnings account.

False

Which of the the following are asset use transactions? Multiple select question. Obtaining cash from the issue of common stock. Paying a cash dividend. Purchasing land for cash. Paying cash for an operating expense.

Paying a cash dividend. Paying cash for an operating expense.

Which of the following are not claims exchange transactions? Multiple select question. Providing services on account. Obtaining cash from the issue of common stock. Recognizing operating expenses on account. Purchasing land for cash.

Providing services on account. Obtaining cash from the issue of common stock. Purchasing land for cash.

Which of the the following is an asset exchange transaction? Multiple choice question. Purchasing land for cash. Purchasing supplies on account. Recognizing operating expenses on account. Providing services on account.

Purchasing land for cash.

Which of the the following is an claims exchange transaction? Multiple choice question. Obtaining cash from the issue of common stock. Providing services on account. Recognizing operating expenses on account. Purchasing supplies on account.

Recognizing operating expenses on account.

Which of the the following is an claims exchange transaction? Multiple choice question. Providing services on account. Recognizing operating expenses on account. Purchasing supplies on account. Obtaining cash from the issue of common stock.

Recognizing operating expenses on account.

Which of the following is a permanent account? Multiple choice question. Dividend Revenue Retained Earnings Supplies Expense

Retained Earnings

True or false: Instead of using special journals for recurring transactions, a company may choose to record all transactions in the general journal.

True

An entry that debits the land account and credits the cash account will cause ______. Multiple select question. a decrease in the amount of net cash flow from investing activities an increase in the amount of total assets no effect in the amount of net income

a decrease in the amount of net cash flow from investing activities no effect in the amount of net income

Another term for a journal is ______. Multiple choice question. source document book of original entry general ledger invoice

book of original entry

The adjusting entry to recognize accrued salaries expense includes a(n) _______ to the salaries payable account and a(n) _______ to the salaries expense account. (Enter only one word per blank.)

credit debit

The adjusting entry to recognize the portion of prepaid insurance that was used during an accounting period includes a(n) _______ to the prepaid insurance account and a(n) _______ to the insurance expense account. (Enter only one word per blank.)

credit debit

The entry to recognize paying cash to purchase land will include a(n) _______ to the cash account and a(n) _______ to the land account. (Enter only one word per blank.)

credit debit

The entry to recognize paying cash to settle an account payable includes a(n) _______ to the cash account and a(n) _______ to the accounts payable account. (Enter only one word per blank.)

credit debit

The entry to recognize purchasing supplies on account will include a(n) _______ to the accounts payable account and a(n) _______ to the supplies account. (Enter only one word per blank.)

credit debit

The journal entry to close the dividends account includes a(n) _______ to the dividends account and a(n) _______ to retained earnings. (Enter only one word per blank.)

credit debit

The journal entry to close the supplies expense account includes a(n) _______ to the supplies expense account and a(n) _______ to retained earnings. (Enter only one word per blank.)

credit debit

The entry to recognize service revenue on account will include a ______ to the service revenue account and a ______ to the accounts receivable account. Multiple choice question. debit; credit debit; debit credit; debit credit; credit

credit; debit

An increase in an asset account balance is recorded with a(n) _______ entry and an increase in a liability account is recorded with a(n) _______ entry. (Enter only one word per blank.)

debit credit

Increases and decreases in each element of the accounting equation are designated by the terms _______ and _______. (Enter only one word per blank.)

debit credit

The adjusting entry to recognize the portion of unearned revenue that was earned during an accounting period includes a(n) _______ to the unearned revenue account and a(n) _______ to a revenue account. (Enter only one word per blank.)

debit credit

The adjusting entry to recognize the supplies used during an accounting period includes a(n) _______ to the supplies expense account and a(n) _______ to the supplies account. (Enter only one word per blank.)

debit credit

The entry to recognize acquiring cash from the issue of common stock includes a(n) _______ to the cash account and a(n) _______ to the common stock account. (Enter only one word per blank.)

debit credit

The entry to recognize collection of cash for unearned revenue will include a(n) _______ to the cash account and a(n) _______ to the unearned revenue account. (Enter only one word per blank.)

debit credit

The entry to recognize operating expenses on account will include a(n) _______ to the operating expenses account and a(n) _______ to the accounts payable account. (Enter only one word per blank.)

debit credit

The entry to recognize paying cash to purchase prepaid insurance will include a(n) _______ to the prepaid insurance account and a(n) _______ to the cash account. (Enter only one word per blank.)

debit credit

The entry to recognize the collection an account receivable will include a(n) _______ to the cash account and a(n) _______ to the accounts receivable account. (Enter only one word per blank.)

debit credit

The entry to recognize paying cash for salaries expense includes a(n) _______ to the salaries expense account because expenses _______ (increase/decrease) total stockholders' equity. (Enter only one word per blank)

debit decrease

The entry to recognize acquiring cash from the issue of common stock will include a ______ to the cash account and a ______ to the common stock account. Multiple choice question. debit; debit credit; debit credit; credit debit; credit

debit; credit

The entry to recognize cash collected for unearned revenue will include a ______ to the unearned revenue account and a ______ to the cash account. Multiple choice question. debit; credit credit; credit credit; debit debit; debit

debit; credit

The entry to recognize purchasing supplies on account will include a ______ to the supplies account and a ______ to the accounts payable account. Multiple choice question. credit; debit debit; debit credit; credit debit; credit

debit; credit

The entry to recognize paying a cash dividend will include a ______ to the dividends account because dividends ______ total stockholders' equity. Multiple choice question. debit; decrease credit; increase credit; decrease debit; increase

debit; decrease

An asset use transaction ______. Multiple choice question. decreases assets and decreases liabilities increases one asset and decreases another asset increases assets and increases liabilities decreases liabilities and increases stockholders' equity

decreases assets and decreases liabilities

An entry recorded with a debit to the prepaid rent account and a credit to the cash account ______ Multiple select question. does not affect the amount of net income causes an increase in the amount of total assets causes a decrease in the amount of net cash flow from operating activities causes a decrease in the amount of total assets

does not affect the amount of net income causes a decrease in the amount of net cash flow from operating activities

Under the rules of _______ - _______ accounting, recording any transaction requires at least one debit and one credit. (Enter only one word per blank.)

double entry

An adjusting entry recorded with a debit to salaries expense account and a credit to a salaries payable account increases ______. Multiple select question. retained earnings expenses liabilities cash outflow for operating activities

expenses liabilities

A temporary account Blank______. Multiple select question. carries forward its balance from one accounting period to the next has a zero balance at the beginning of each new accounting period is closed at the end of each accounting period is closed at the beginning of each accounting period

has a zero balance at the beginning of each new accounting period is closed at the end of each accounting period

An asset source transaction ______. Multiple choice question. decreases liabilities and increases stockholders' equity increases assets and increases liabilities increases one asset and decreases another asset decreases assets and decreases liabilities

increases assets and increases liabilities

A claims exchange transaction ______. Multiple choice question. increases one asset and decreases another asset increases assets and increases stockholders' equity decreases assets and decreases liabilities increases liabilities and decreases stockholders' equity

increases liabilities and decreases stockholders' equity

The adjusting entry to recognize the portion of unearned revenue that was earned during an accounting period ______. Multiple select question. increases net income increases total assets decreases total liabilities increases cash flow from operating activities

increases net income decreases total liabilities

An asset exchange transaction ______. Multiple choice question. increases assets and increases stockholders' equity decreases assets and decreases liabilities decreases liabilities and increases stockholders' equity increases one asset and decreases another asset

increases one asset and decreases another asset

An entry recorded with a debit to an operating expenses account and a credit to an accounts payable account ______. Multiple select question. decreases net income decreases cash flow from operating activities decreases total assets increases total liabilities

increases total liabilities decreases net income

Recognizing prepaid insurance that was used up during the year is recorded on the ______ side of the Insurance Expense T-account and the _______ side of the Prepaid Insurance T-account. (Enter either left or right in each blank.)

left right

Recognizing unearned revenue that was earned during the period is recorded on the _______ side of the Unearned Revenue T-account and the _______ side of the Service Revenue T-account. (Enter either left or right in each blank.)

left right

The collection of an account receivable is recorded on the side of the Cash T-account and the side of the Accounts Receivable T-account. (Enter either left or right in each blank.)

left right

The issue of common stock for cash is recorded on the _______ side of the Cash T-account and the _______ side of the Common Stock T-account. (Enter either left or right in each blank.)

left right

The payment of dividends is recorded on the _______ side of the Dividends T-account and the _______ side of the Cash T-account. (Enter either left or right in each blank.)

left right

The purchase of supplies on account is recorded on the _______ side of the Supplies T-account and the _______ side of the Accounts Payable T-account. (Enter either left or right in each blank.)

left right

The recognition of operating expenses on account is recorded on the _______ side of the Other Operating Expense T-account and the _______ side of the Accounts Payable T-account. (Enter either left or right in each blank.)

left right

A trial balance Blank______. Multiple select question. is a journal that records all cash receipts lists every ledger account and its balance tests whether debits equal credits in the general ledger uses source documents to record individual transactions

lists every ledger account and its balance tests whether debits equal credits in the general ledger

An adjusting entry recorded with a debit to the insurance expense account and a credit to the prepaid insurance account decreases ______. Multiple select question. total liabilities cash flow from operating activities net income total assets

net income total assets

A account that is not closed at the end of the accounting period is called a(n) _______ account. (Enter only one word per blank.)

permanent

A trial balance showing account balances immediately after closing entries were posted is called a(n) ______ trial balance. Multiple choice question. adjusted pre-closing post-closing daily

post-closing

Asset source transactions include ______. Multiple select question. purchasing land for cash purchasing supplies on account obtaining cash from the issue of common stock providing services on account

purchasing supplies on account obtaining cash from the issue of common stock providing services on account

A post-closing trial balance does not include _______ , _______ or _______ accounts. (Enter only one word per blank.)

revenue expense dividend

Paying cash for prepaid insurance is recorded on the _______ side of the Cash T-account and the _______ side of the Prepaid Insurance T-account. (Enter either left or right in each blank.)

right left

Recognizing supplies used up during the year is recorded on the _______ side of the Supplies T-account and the _______ side of the Supplies Expense T-account. (Enter either left or right in each blank.)

right left

The purchase of land for cash is recorded on the _______ side of the Cash T-account and the _______ side of the Land T-account. (Enter either left or right in each blank.)

right left

An account that is closed at the end of each accounting period is called a(n) _______ account. (Enter only one word per blank.)

temporary

An account whose balance is closed at the end of each accounting period and whose balance is zero at the beginning of each new accounting period is called a ______ account. Multiple choice question. general financing permanent temporary

temporary

An entry recorded with a debit to the accounts payable account and a credit to the cash account decreases ______. Multiple select question. net cash flow from financing activities total assets net income total liabilities

total assets total liabilities

To test whether debits equal credits in the general ledger, accounts prepare an internal accounting schedule called a(n) _______ _______ . (Enter only one word per blank.)

trial balance