Ch. 2 Smartbook

Describe a T-Account.

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

The correct definition of an "account" includes which of the following?

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

Which of the following is the best definition of a source document in the accounting process?

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

An account is a record of increases and__________ in a specific asset, liability, equity, revenue or expense.

DECREASES

The business earns $700 of consulting revenue. How would these earnings affect the total equity of a business?

Revenues increase, so total equity is increased.

Which of the following would be considered a source document in an accounting system?

Sales receipt Purchase order Payroll records Checks

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 journal

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

chart of accounts

It is a collection of all accounts with their activity and balances that exist in a business.

general ledger

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

increases and decreases in all accounts in a business. which accounts are being used by a company and their balances at any given time. common and unique accounts used by a business.

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

trial balance