ACG CH3

Which of the following events is not recorded in a company's accounting records?

A decision to offer a company's services in a new geographic area.

What type of account is unearned revenue?

liability

What journal entry is recorded as a result of issuing a note when borrowing money from a bank?

A debit to Cash and a credit to Notes Payable

Which of the following best describes a chart of accounts

A chart of accounts is the list of the accounts in a given firm's ledger.

Which of the following occurs when an account payable is paid with cash?

Assets decreases and liabilities decrease

Which accounts normally have debit balances?

Assets, dividends, and expenses

Which of the following is not reported as a financing activity in the statement of cash flows?

Buying equipment

Which pair of accounts follows the rules of debits and credits in relation to increases and decreases in the same manner?

Cash and Income Tax Expense

Which of the following is the sequence of events for the recording process?

Journalize; post; prepare a trial balance

If a company pays for a one-year insurance policy that will expire next year, then

assets increase and assets decrease

If a company borrows money from a bank, then

assets increase and liabilities increase

If a company buys supplies on account, then

assets increase and liabilities increase

Genesis Company pays $900 for employee salaries. This transaction will immediately affect the

balance sheet, income statement, retained earnings statement,a nd cash flows statement only.

If a company records wages when it pays them, then recording the payment of wages

decreases assets and decreases stockholders' equity.

Payment of a dividend

decreases cash and decreases retained earnings.

The effects of a receipt of cash in advance from a customer on the basic accounting equation are to

increase assets and increase liabilities.

Receipt of an unearned revenue

increases an asset and increases a liability.

If cash is received from owners as an investment by stockholders

stockholders' equity will increase and assets will increase

If an account is debited in the journal entry, then

that account will be debited in the ledger.

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

the mathematical equality of the accounting equation.

Accounts are listed on the trial balance in

the order that they appear in the ledger.