Ch. 02: Accounting for Business Transactions
What is the general time period we use when determining if some accounting element is current vs. non-current?
1 year
What type of account is the following: Accounts Receivable
Asset
What type of account is the following: Buildings
Asset
What type of account is the following: Cash
Asset
What type of account is the following: Equipment
Asset
What type of account is the following: Land
Asset
What type of account is the following: Note Receivable
Asset
What type of account is the following: Prepaid Insurance
Asset
What type of account is the following: Prepaid Rent
Asset
What type of account is the following: Rent Receivable
Asset
What type of account is the following: Supplies
Asset
What goes first in the trial balance?
Assets
What account types / other information are listed only in the Balance Sheet?
Assets, Liabilities, Contributed Capital Accounts, & Ending Retained Earnings
What is the only financial statement to report at a point in time?
Balance Sheet
Which financial statement is prepared 3rd?
Balance Sheet
Retained earnings are listed on the trial balance. Are those beginning or ending retained earnings, though?
Beginning
Enter either DR or CR to answer the question. ↑ Common Stock
CR
Enter either DR or CR to answer the question. ↑ in Accounts Payable
CR
Enter either DR or CR to answer the question. ↑ in Rent Revenue
CR
Enter either DR or CR to answer the question. ↓ Cash
CR
Enter either DR or CR to answer the question. ↓ in Accounts Receivable
CR
Enter either DR or CR to answer the question. ↓ in Office Supplies
CR
What is the Normal Balance of the following account: Accounts Payable
CR
What is the Normal Balance of the following account: Common Stock
CR
What is the Normal Balance of the following account: Fees Earned
CR
What is the Normal Balance of the following account: Wages Payable
CR
On May 1, Mattingly Lawn Service collected $2,500 cash from a customer in advance of 5 months of lawn service. The JE to record this transaction includes a
CR: Unearned Lawn Services Fees for $2,500
What information does the Statement of Cash Flows provide?
Changes in cash broken down by activity type
What account types / other information are listed only in the Statement of Cash Flows?
Changes in cash by activity type
What is included in line 1 of the header for all 4 financial statements?
Company Name
The following account impacts which type of equity: Common Stock
Contributed Capital
Enter either DR or CR to answer the question. ↑ Cash
DR
Enter either DR or CR to answer the question. ↑ Dividends
DR
Enter either DR or CR to answer the question. ↑ in Accounts Receivable
DR
Enter either DR or CR to answer the question. ↑ in Office Supplies
DR
Enter either DR or CR to answer the question. ↑ in Rent Expense
DR
Enter either DR or CR to answer the question. ↓ in Accounts Payable
DR
What is the Normal Balance of the following account: Accounts Receivable
DR
What is the Normal Balance of the following account: Building
DR
What is the Normal Balance of the following account: Dividends
DR
What is the Normal Balance of the following account: Office Supplies
DR
What is the Normal Balance of the following account: Prepaid Rent
DR
What is the Normal Balance of the following account: Wages Expense
DR
Liang Shue contributed $250,000 cash and land worth $500,000 to open his new business, Shue Consulting Corporation. Which of the following journal entries does Shue Consulting make to record this transaction?
DR: Cash for $250,000 DR: Land for $500,000 CR: Common Stock for $750,000
Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a
DR: Utility Expense for $700
What is included in line 3 of the header for all 4 financial statements?
Date(s) covered by the Financial Statement
If you make a cash payment on an outstanding Accounts Payable, what impact does that have on the Accounts Payable account balance?
Decrease
If you make a cash payment on an outstanding Accounts Payable, what impact does that have on the Cash account?
Decrease
What does an increase in the following account type do to Equity? Dividends
Decrease
What does an increase in the following account type do to Equity? Expenses
Decrease
What account types / other information are listed only in the Statement of Retained Earnings?
Dividends & Beginning Retained Earnings
What critical piece of information does the Statement of Retained Earnings provide that we roll over to the Balance Sheet?
Ending Retained Earnings
What type of account is the following: Common Stock
Equity
What type of account is the following: Dividends
Equity
What type of account is the following: Retained Earnings
Equity
What type of account is the following: Advertising Expense
Expense
Enter either TRUE or FALSE regarding the statement below. A T-Account's DRs and CRs must balance (be equal).
FALSE
Which of the 3 activity types (OIF) covered by the Statement of Cash Flows begins with "F"?
Financing
Which financial statement is prepared 1st?
Income Statement
If you make a sell to a customer on credit, what impact does that have on the Accounts Receivable account?
Increase
If you make a sell to a customer on credit, what impact does that have on the Sales Revenue account?
Increase
What does an increase in the following account type do to Equity? Common Stock
Increase
What does an increase in the following account type do to Equity? Revenues
Increase
Which of the 3 activity types (OIF) covered by the Statement of Cash Flows begins with "I"?
Investing
What type of account is the following: Accounts Payable
Liability
What type of account is the following: Notes Payable
Liability
What type of account is the following: Taxes Payable
Liability
What type of account is the following: Unearned Revenue
Liability
What type of account is the following: Wages Payable
Liability
What is included in line 2 of the header for all 4 financial statements?
Name of the Financial Statement
What critical piece of information does the Income Statement provide us that we roll over to the Statement of Retained Earnings?
Net Income
If you make a sell to a customer on credit, what impact does that have on the Accounts Payable account?
No Effect
If you make a sell to a customer on credit, what impact does that have on the Cash account?
No Effect
Which of the 3 activity types (OIF) covered by the Statement of Cash Flows begins with "O"?
Operating
The following account impacts which type of equity: Dividends
Retained Earnings
The following account impacts which type of equity: Expenses
Retained Earnings
The following account impacts which type of equity: Revenues
Retained Earnings
What type of account is the following: Fees Earned
Revenue
What type of account is the following: Rent Revenue
Revenue
What account types / other information are listed only in the Income Statement?
Revenues & Expenses
What two account types are listed last on the trial balance?
Revenues & Expenses
Which financial statement is prepared 4th?
Statement of Cash Flows
Which financial statement is prepared 2nd?
Statement of Retained Earnings
Enter either TRUE or FALSE regarding the statement below. A Journal Entry's DRs and CRs must balance (be equal).
TRUE
Enter either TRUE or FALSE regarding the statement below. The total DRs and CRs of the accounts listed on the trial balance should balance (be equal).
TRUE
What critical piece of information does the Balance Sheet provide?
Verification that Assets = Liabilities + Equity
Account
a record of changes in a specific asset, liability, equity, revenue, or expense
Equity
a residual interest in a business' assets, with creditors being covered first
Current Asset
asset that will be collected or converted to cash within 1 year
Liabilities represent whose claims to an entity's assets?
creditors
Contributed Capital
investors' direct contributions to an entity
We record detailed information about transactions in the ____________
journal
We list summarized account balances in the __________.
ledger
Chart of Accounts
list of all ledger accounts with identification number assigned to each account
Liabilities
obligations to transfer assets or provide products or services in the future (future detriment).
Equity represents whose claims to an entity's assets?
owners
All but one of the financial statements cover a _____________ in time.
period
General Ledger
record of all accounts used by a company
Source Documents
records or documents that provide evidence of a transaction or event
Assets
resources owned and/or controlled by a company that are expected to yield future benefit
