Ch2 SB

Which of the following accounts are examples of expenses? Multiple select question. Accounts payable Dividends Supplies expense Rent expense

Supplies expense Rent expense

Which of the following statements is the correct definition of a creditor? A creditor is an individual or organization which is trying to borrow money from a business. A creditor is an individual or organization that has a right to receive payments from a business. A creditor is an individual or organization that owes money to a business. A creditor is an individual or organization which purchases merchandise from a business on account.

A creditor is an individual or organization that has a right to receive payments from a business.

Which set of accounts below would have a normal debit balance? Revenues; Dividends; Prepaid rent Expenses; Dividends; Cash Dividends; Expenses; Unearned rent Expenses, Dividends; Common Stock

Expenses; Dividends; Cash

Which of the following is correct regarding posting a transaction? Posting means to transfer journal information to a ledger. Posting takes place once during an accounting period. Posting means to enter transactions into a journal.

Posting means to transfer journal information to a ledger.

Name the accounting document or report that is completed just prior to preparing financial statements and assists in preparing the financial statements. T-account General journal Trial balance General ledger

Trial balance

The statement of retained earnings reports: the revenues less the expenses incurred by a business how retained earnings changed over a period of time how cash was received and spent during a period asset and liability balances

The statement of retained earnings reports: Multiple choice question. the revenues less the expenses incurred by a business how retained earnings changed over a period of time how cash was received and spent during a period asset and liability balances

Which of the following statements is (are) correct regarding the definition of a liability? (Check all that apply.) A liability is a claim by creditors against the assets of a business. A liability can be settled by transferring assets or providing products or services to others. A liability is an asset waiting to be received by a business. A liability is a debt owed by the business. A liability is a thing of value owned by the business and is increased on the left side of a T-account.

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

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. Assets represent the owner's claims against a company. Assets are the distributions to the owners of a company. Assets are claims against the company.

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

Identify which of the following lists include only examples of assets. Equipment, dividends, land Building, cash, accounts receivable Cash, accounts payable, supplies Unearned revenue, accounts payable, cash,

Building, cash, accounts receivable

Which of the selections below includes all of the required information to be entered in a journal? Debited and credited accounts, dates and explanation of transaction, initials of person entering transaction Date of transaction, explanation of transaction, debited and credited accounts, dollar amounts of debits and credits Initials of person entering the transaction, debited accounts, dollar amounts of debits and date of transaction

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

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

Select all that apply Which of the following statements is (are) correct regarding a journal? (Check all that apply.) Entering transactions into a journal is called posting. In a journal, both the debit and credit side of the transaction can be seen. A journal is used to record business transactions. Transactions are generally entered in chronological order. A journal reports the balance of all the accounts in a business.

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

On Jan. 2, Callie Company 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 account and a ____(debit, credit) to the Accounts Receivable account.

debit cash credit

A posting reference in a _______ (journal/ledger) includes the page number of the account debited or credited in the _______(journal/ledger) and serves as a link to cross-reference the transaction from one record to another.

ledger journal

The Notes payable account is a(n) _______(asset/liability/expense) account and is increased on the l_____ (left/right) side of the T-account.

liability right

The steps in the accounting process include: (Check all that apply.) Determine management's responsibilities Record business transactions Analyze transactions Identify employees to be fired Identify transactions and source documents

Record business transactions Analyze transactions Identify transactions and source documents

Which of the following statements is (are) true regarding the balance sheet? (Check all that apply.) It lists the balances of revenues and expenses. It depicts the equality of the accounting equation. It reports the financial position at a point in time. The report date includes a single calendar day. The report date is over a period of time.

It depicts the equality of the accounting equation. It reports the financial position at a point in time. The report date includes a single calendar day.

Which of the following statements is the best definition of the Chart of Accounts? Multiple choice question. It is a collection of all accounts with their activity and the balances that exist in a business. It is a book of original entry that includes a chronological record of all transactions that have occurred within a business. It is a list of each account and its balance at any given time. It is a list of all ledger accounts which exist in a business and includes an identification number assigned to each account.

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

In defining a reporting period, which of the following statements is (are) correct? (Check all that apply.) A one-year reporting period is known as the fiscal year. A reporting period refers to each day in the calendar year. A reporting period is used to determine the due date of payables. A reporting period is determined by the business. A reporting period can be one month, one quarter or one year.

A one-year reporting period is known as the fiscal year. A reporting period is determined by the business. A reporting period can be one month, one quarter or one year.

Which of the following would be included on an income statement? (Check all that apply.) Total expenses Total liabilities Total equity Total revenues Net income Total assets

Total expenses Total revenues Net income

· Chart of Accounts

is a list of all ledger accounts and has an identification number assigned to each account.

Which of the following statements is (are) correct regarding a T-account? (Check all that apply.) A T-account may be used as a tool to visualize the effects of a transaction. A T-account reflects whether a transaction was posted correctly. A T-account will show the debit and credit effects of transactions. 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. A T-account represents a ledger account.

Which of the following statements is accurate regarding Accounts payable? Accounts payable are assets which are increased on the left side of the T-account. Accounts payable refer to deposits made by the business into their checking account Accounts payable refer to amounts owed to the business by customers who purchased products on credit. Accounts payable refer to promises to pay later, which may arise from the purchase of supplies or services.

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

Which of the following statements about the Dividends account is (are) correct? (Check all that apply.) Dividends are increased on the right side of the T-account. Dividends decrease equity. Dividends are increased on the left side of the T-account. Dividends is used to record distributions of assets to the owners of a business.

Dividends decrease equity. Dividends are increased on the left side of the T-account. Dividends is used to record distributions of assets to the owners of a business.

Which of the following accounts would be considered an asset? (Check all that apply.) Common Stock Accounts payable Building Accounts receivable Supplies Cash

Building Accounts receivable Supplies Cash

Choose the statement below that correctly explains a general journal.. A journal is a record keeping device that is used to monitor customer account balances. A journal is a complete record of each transaction in one place and includes the debit and credit of each transaction. A journal is a record of all of the accounts that exist in a business and includes their identifying account number. A journal is a list of accounts and their balances at any given moment.

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

On Mar 3, Lyons Company received $100 cash in advance of providing catering services to a customer. Use your knowledge of what a correct journal entry should look like to identify what would be included in the correct journal entry

Unearned Revenue would be credited and listed second Cash would be debited and listed first

Which of the following is the best definition of a source document in the accounting process? A source document shows all the information about the legal rights a company has in relation to when it should pay a bill. A source document identifies and describes transactions and is the basis for entering an event into the accounting system. A source document is used to determine who hired an employee that is assigned the duty of entering transactions into the accounting process.

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

Given the descriptions below, which is (are) true regarding notes receivable? Another name for a note receivable is a promissory note. Notes receivable is classified as a liability. A Note receivable is the promise of another entity to pay a specific sum of money on a specified future date. Notes receivable is classified as an asset.

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

Select the statements below that are correct in regards to entering transactions in a journal. (Check all that apply.) Credited accounts should be listed before debited accounts. Total dollar amount of debits must equal the total dollar amount of credits. Dollar signs are required in a journal. Credited accounts should be indented.

Total dollar amount of debits must equal the total dollar amount of credits. Credited accounts should be indented.

The T-account for Accounts payable had 4 transactions entered into it. It was increased by $300 and by $100 and decreased by $50 and by $150, respectively. Its balance at the end of the period would be a (debit/credit) _______ balance of $ _____.

debit 200

The T- account for Cash had 3 transactions entered into it. It was increased by $400 and decreased by $100 and by $30, respectively. Its balance at the end of the period would be a ______ (debit/credit) balance of $_______.

debit 270

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 as it is used and gets worn down, the cost is gradually expensed. Equipment purchases are reported on the balance sheet. Equipment purchases are expensed, in their entirety, in the period in which they occur. Equipment is reported on the left side of the accounting equation.

Equipment is an asset. Equipment cost is initially recorded as an asset and as it is used and gets worn down, the cost is gradually expensed. Equipment purchases are reported on the balance sheet. Equipment is reported on the left side of the accounting equation.

Which of the following statements is (are) accurate regarding equipment purchased within a business? (Check all that apply.) Equipment purchases are expensed, in their entirety, in the period in which they occur. Equipment is reported on the left side of the accounting equation. Equipment cost is initially recorded as an asset and as it is used and gets worn down, the cost is gradually expensed. Equipment purchases are reported on the balance sheet. Equipment is an asset.

Equipment is reported on the left side of the accounting equation. Equipment cost is initially recorded as an asset and as it is used and gets worn down, the cost is gradually expensed. Equipment purchases are reported on the balance sheet. Equipment is an asset.

Which of the following are accurate statements regarding how to report or treat prepaid accounts? (Check all that apply.) The expired portion of prepaid accounts is treated as liabilities. Over time, the expired portion of prepaid accounts is removed from the account and reported as an expense. The expired portion of prepaid accounts is reported on the income statement as an expense. The unexpired portion of prepaid accounts are treated as assets.

Over time, the expired portion of prepaid accounts is removed from the account and reported as an expense. The expired portion of prepaid accounts is reported on the income statement as an expense. The unexpired portion of prepaid accounts are treated as assets.

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

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

Paul's Programming Services paid $100 dividends. Show how to record this transaction by selecting the correct answer below. Credit Cash; debit Retained earnings. Debit Dividends; credit Cash. Debit Cash; credit Dividends expense. Credit Cash; debit Common stock.

Debit Dividends; credit Cash.

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

increase right

Transferring entries from the journal to the ledger is called (posting/preparing/journalizing) ______.

post

All of the following are examples of accrued liabilities: wages payable taxes payable interest payable accounts payable notes payable

wages payable taxes payable interest payable

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

False

Which of the following statements is accurate regarding the Building account? Multiple choice question. A Building asset account is used to record the costs of purchasing a store, office, warehouse or factory. A Building account is increased on the right side of a T-account because it is an asset. A Building expense account is used to record the costs of purchasing a store, office, warehouse or factory. Building costs are treated as expenses in the period they are incurred and reported on the income statement.

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

Which of the following statements is (are) correct? (Check all that apply.) Crediting a liability account will increase it. Crediting the Common Stock account means to increase it. Crediting means to enter transactions on the left side of a T-account. Crediting means to enter transactions on the right side of a T-account.

Crediting a liability account will increase it. Crediting the Common Stock account means to increase it. Crediting means to enter transactions on the right side of a T-account.

Which of the following statements is (are) correct regarding the Notes payable account? (Check all that apply.) Notes payable is increased on the left side of the T-account. Notes payable is a liability account. Notes payable is an asset account. Notes payable is a formal promise to pay a certain sum of money on a specified future date. Notes payable is reported on the balance sheet.

Notes payable is a liability account. Notes payable is a formal promise to pay a certain sum of money on a specified future date. Notes payable is reported on the balance sheet.

Which of the following are examples of prepaid (expense) accounts? (Check all that apply.) Prepaid accounts payable Prepaid insurance Prepaid dividends Prepaid buildings Prepaid rent

Prepaid insurance Prepaid rent

Which of the following statements about revenues is correct? Revenues cause equity to decrease, and they are increased on the right side of their T-account. Revenues cause equity to increase, and they are increased on the right side of the T-account. Revenues cause equity to increase, and they are reported on the left side of the accounting equation. Revenues cause equity to increase, and they are increased on the left side of the T-account.

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

· Ledger:

The collection of all accounts and their balances bits = credits

Analyzing the accounting equation at the end of the month will reveal the following. Select all that apply. assets and liabilities will be reported on the income statement assets = liabilities + equity revenues and expenses will change the equity account increases and decreases in cash will be reported on the balance sheet

Verify that the total debit balances equals the total credit balances. Compute the total of debit balances and the total of credit balances. List each account title and its amount from the ledger.

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

The Dividends account is used to record ______ (investments/dividends/expenses/revenues) by the owner and has a (positive/negative) _______ impact on equity.

dividends negative

When the product or service related to an unearned revenue is delivered, the earned portion of the unearned revenue is transferred to a _____ account. liability asset equity revenue

revenue

Choose the account(s) below, that would have a normal credit balance. revenues accounts payable notes payable common stock expenses dividends

revenue notes payable common stock

· 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

Which of the following describes a general ledger? The general ledger combines sales and expenses to determine the net income of a business. The general ledger is a record containing all accounts used by a company. The general ledger is a record of all transactions in alphabetical order. The general ledger describes all liability accounts.

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

Which statement best describes a T-account? A T-account is used to record transactions in a chronological order and serves as a book of original entry. A T-account is used in a business to accurately report the financial status of its operations to the owners. A T-account is a formal financial statement which reports whether debits = credits at any given time. A T-account represents a ledger account and is a tool used to understand the effects of one or more transactions.

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

Select all that apply When entering transactions into accounts, the rules of double-entry accounting must be followed. These rules include: (Check all that apply.) The total number of accounts debited must equal the total number of accounts credited. the total amount debited must equal the total amount credited. There must be at least one credit and one debit. The accounting equation must remain in balance.

the total amount debited must equal the total amount credited. There must be at least one credit and one debit. The accounting equation must remain in balance.

On Jan. 2, Callie Company purchased $300 worth of supplies. She paid $100 immediately, but put the rest on account. The journal entry to record this transaction in Callie Company's books would include which of the following? (Check all that apply.) Debit the Cash account for $100. Debit the Supplies account for $100. Debit the Accounts payable account for $200. Debit the Supplies account for $300. Credit the Cash account for $100. Credit Accounts payable for $200.

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

On Mar 3, Lyons Company paid dividends of $1,000. Use your knowledge of what a correct journal entry should look like to identify what would be included. (Check all that apply.) Dividends would be credited and listed second. Dividends expense would be debited and listed first. Dividends would be debited and listed first. Cash would be debited and listed first. Cash would be credited and listed second.

Dividends would be debited and listed first. Cash would be credited and listed second.

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 false question.

True

Accounts payable refer to obligations owed ____(by/to) the business and are classified as a(n) _______(asset/liability/expense) account.

by liability

· 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 unearned revenues? (Check all that apply.) Unearned revenues refer to assets which have yet to be billed to customers for services performed by the business. Unearned revenue is a liability account which is set up when a customer pays in advance for a product or service. Unearned revenues refer to a liability that is settled when a company delivers a product or performs a service. Unearned revenues are amounts owed by customers for services performed.

Unearned revenue is a liability account which is set up when a customer pays in advance for a product or service. Unearned revenues refer to a liability that is settled when a company delivers a product or performs a service.

Enter one word for each blank. The expanded accounting equation is: = + common stock + - - dividends. Do not include the word "account(s)" in your answers. Note: order of the equation is important.

assets liabilities revenues expenses

The stockholders of a business received a $1000 dividend. How would this affect the total equity of the business? Total equity would be decreased and liabilities would be increased. Total equity would be increased and assets would increase as well. Assets would be decreased and total equity would decrease as well. Assets would be increased and total equity would decrease.

Assets would be decreased and total equity would decrease as well.

Which of the following lists of items contain only examples of prepaid (expense) accounts? Prepaid rent, prepaid insurance Prepaid insurance, unearned revenue, prepaid accounts payable Prepaid rent, prepaid land Prepaid insurance, prepaid accounts receivable, prepaid land

Prepaid rent, prepaid insurance

From the following lists of accounts, choose the list(s) which contains only expense accounts. Rent expense, wages expense, insurance expense Rent expense, supplies expense, accounts payable Rent expense, dividends, insurance expense Wages expense, unearned revenue, supplies expense

Rent expense, wages expense, insurance expense

The business earns $2,800 cash for services performed. How would this receipt affect the total equity of a business? Revenues would be increased, so equity is increased. Revenues would be decreased, so equity would be decreased. There is no effect on total equity. Revenues would be decreased, so equity is increased.

Revenues would be increased, so equity is increased.

Which of the following formulas is correct in depicting the expanded accounting equation? Assets = Liabilities + Common stock - Dividends + Revenues - Expenses Assets + Liabilities = Common stock - Dividends + Revenues - Expenses Assets = Liabilities - Common stock - Dividends + Revenues + Expenses Assets = Liabilities + Common stock + Dividends - Revenues + Expenses

Assets = Liabilities + Common stock - Dividends + Revenues - Expenses

Which of the following is required information when entering a transaction into a journal? (Check all that apply.) Explanation of transaction Date of the transaction Debited accounts Credited accounts Initials of person entering the transaction

Explanation of transaction Date of the transaction Debited accounts Credited accounts

Which of the following statements is the correct definition of a liability? A liability is a claim by a creditor against the assets of a business. A liability is something of value owned by a business. A liability is recorded when money is earned by the business. A liability is a claim against a customer who is delinquent in paying their bill.

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

Which of the following statements is correct in regards to debiting and crediting an account? Credit means to decrease an account if the account is on the right side of the accounting equation. A debit or a credit can increase an account, depending on what kind of account it is. Debit means to increase an account. Credit means to increase an account.

A debit or a credit can increase an account, depending on what kind of account it is.

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. Investments cause Common stock to increase, so to increase the Common stock account, you would debit it. Assets are on the left side of the accounting equation, so to increase them, you would credit them. Revenues increase equity, so to increase a revenue account, you would debit it.

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

Which of the following statements is correct regarding the effect of debits and credits in accounts? Revenues increase equity, so to increase a revenue account, you would debit it. Expenses reduce equity, so to increase an expense account you would debit it. Assets are on the left side of the accounting equation, so to increase them, you would credit them. Investments cause Common stock to increase, so to increase the Common stock account, you would debit it.

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

Which of the following statements is (are) correct regarding the Balance column in a ledger (or Balance column account)? (Check all that apply.) Immediately after posting a transaction, the balance of the account is written in the Balance column. A balance column account is similar to a T-account. It is not necessary to calculate the new balance of the account until the end of the period -- before financial statements are prepared. The amount of the debit or credit to the account is also entered in the Balance column of the ledger.

Immediately after posting a transaction, the balance of the account is written in the Balance column. A balance column account is similar to a T-account.

According to the revenue recognition principle, revenue is to be recognized when: Multiple choice question. month-end occurs the product or service is provided the customer pays

the product or service is provided

An income statement reports: the revenues less the expenses incurred by a business asset and liability balances how equity changed over a period of time how cash was received and spent during a period

the revenues less the expenses incurred by a business

Which of the following accounts has a normal credit balance? (Check all that apply.) Supplies Common stock Prepaid Insurance Accounts receivable Accounts payable Unearned consulting revenue

Common stock Accounts payable Unearned consulting revenue

There are several types of accounts that impact equity. Which of the accounts below cause equity to increase? Common stock and expenses Dividends and assets Revenues and assets Common stock and revenues

Common stock and revenues

From the lists of accounts below, which one contains only revenue accounts? Accounts receivable, Service revenue, Professional fees earned Sales, Rent revenue, Accounts receivable Accounts payable, Interest revenue, Commissions earned Interest revenue, Professional fees earned, Sales

Interest revenue, Professional fees earned, Sales

Which of the following would be considered a source document in an accounting system? (Check all that apply.) Payroll records Purchase order Checks Professional journal Employee speeding ticket Sales receipt

Payroll records Purchase order Checks Sales receipt

Which of the following accounts impact equity? (Check all that apply.) Revenue Dividends Expenses Common Stock Assets Liabilities

Revenue Dividends Expenses Common Stock

Which of the following statements best explains the posting reference in a journal and a ledger? The posting reference depicts the initials of the person journalizing and posting. The posting reference creates a link between the journal and the ledger. A posting reference includes a detailed explanation of the transaction. The posting reference is entered when journalizing a transaction, so there is no need for it in the ledger.

The posting reference creates a link between the journal and the ledger.

Which of the following statements is (are) correct regarding the effect of debiting or crediting accounts? (Check all that apply.) To reduce Cash, you would credit it. To decrease an asset, you would credit it. To increase an expense account, you would debit it. To reduce Accounts payable, you would debit it To increase the Dividends account, you would debit it. To increase the Common stock account you would debit it. To increase a revenue account, you would debit it.

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

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

assets expenses

The correct definition of an "account" includes which of the following? A cashier's tape register receipt showing total dollars of sales made A customer's purchase order for buying merchandise A record of increases and decreases in a specific asset, liability, equity, revenue, or expense item A bank report listing checks written and deposits made during a month

A bank report listing checks written and deposits made during a month

Which of the following statements is (are) correct regarding the sides of a T-account? (Check all that apply.) Asset accounts will be increased on the right side. The left side is called the credit side. Asset accounts will be increased on the left side. Liability accounts will be increased on the right side. The right side is called the credit side. Liability accounts will be increased on the left side. The left side is called the debit side.

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

Which of the following statements is the correct definition of equity? Equity includes the things of value owned by a business. Equity is the owner's claim on a company's assets. Equity is the cost of doing business during a period. Equity addresses the rights of creditors against the assets of a business.

Equity is the owner's claim on a company's assets.

Which of the following statements is correct? To debit an account means to enter transactions on the right side of a T-account. To debit an account means to enter transactions in a book of original entry in chronological order. A debit will increase a liability account. To debit an account means to enter transactions on the left side of a T-account.

To debit an account means to enter transactions on the left side of a T-account.

The general ledger can be used to determine which of the following (select all answers which apply): a complete record of each transaction in one account. which accounts are being used by a company and their balances at any given time. increases and decreases in all accounts in a business. common and unique accounts used by a business.

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

On Mar 3, Lyons Company paid dividends of $1,000. Use your knowledge of what a correct journal entry should look like to identify what would be included. (Check all that apply.) Dividends would be credited and listed second. Cash would be debited and listed first. Cash would be credited and listed second. Dividends would be debited and listed first. Dividends expense would be debited and listed first.

Cash would be credited and listed second. Dividends would be debited and listed first

Analyzing the accounting equation at the end of the month will reveal the following. Select all that apply. assets and liabilities will be reported on the income statement assets = liabilities + equity revenues and expenses will change the equity account increases and decreases in cash will be reported on the balance sheet

assets = liabilities + equity revenues and expenses will change the equity account

A trial balance is a(n) ______(list/balance/chart) of accounts and their balances at a point in time and is used to confirm that the sum of debit account balances equals the sum of _______ account balances. Use one word for each blank.

list credit

An efficient way to search for an error causing the trial balance to not be in balance is to check the journalizing, posting, and trial balance preparation in ______ order.

reverse

Financial statements are prepared from a(n) journal entries general ledger chart of accounts trial balance

trial balance

Cash can take many forms. From the lists of items below, choose the one which includes only items that would be defined as cash. Checks, coins, accounts payable Checks, money orders, supplies Coins, accounts receivables, checks Coins, checks, money orders

Coins, checks, money orders

Which of the following statements is correct regarding expenses. Expenses are reported on the left side of the accounting equation. Expenses are increased on the left side of their T-account because they decrease equity. Expenses result from products or services provided to customers Expenses increase equity.

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

A business pays $500 for rent. How would this payment affect the equity of a business? Expenses are decreased, so equity is decreased. Reason: Expenses are increased. Expenses are increased, so equity is decreased. Expenses are increased, so total equity is increased. Reason: Equity is decreased.

Expenses are increased, so equity is decreased.

Which of the following items is (are) required in the heading of every financial statement? (Check all that apply.) "Prepared-by" or signature line Name of the financial statement Name of the business Phone number of the business Address of the business Date or period of time covered

Name of the financial statement Name of the business Date or period of time covered

Select the statement below that best defines prepaid accounts. Prepaid accounts reflect a company's cash balance and include currency, coins and money orders. Prepaid accounts are assets that represent prepayments of future expenses. Prepaid accounts are expenses and are increased with a credit. Prepaid accounts are liabilities that are due within a specified time period.

Prepaid accounts are assets that represent prepayments of future expenses.

An annual insurance policy is paid in advance by a company. How will the company treat this initial payment and the subsequent expiration of a portion of the policy over time? (Check all that apply.) This prepayment of the policy will initially be treated as an expense and over time, the expired portion will be treated as an asset. The initial payment will be recorded as an increase to a Prepaid Insurance account. Over time, the expired portion of the policy must be removed from the asset account as it has been used up and is no longer considered an asset. As a portion of the policy expires, the expired portion will be removed and transferred to an expense account.

The initial payment will be recorded as an increase to a Prepaid Insurance account. Over time, the expired portion of the policy must be removed from the asset account as it has been used up and is no longer considered an asset. As a portion of the policy expires, the expired portion will be removed and transferred to an expense account.

Which of the following statements are accurate regarding supplies? (Check all that apply.) Multiple select question. Supplies is considered a liability account. Reason: Supplies are an asset account. Unused supplies are treated as expenses. Reason: They are treated as assets. Unused supplies are treated as assets. Unused supplies can be recorded as Store Supplies, Office Supplies or Supplies. When supplies are purchased, they are added to the Supplies account. Supplies are assets until they are used.

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

To enter transactions on the right side of a T-account means you will _______ (debit/credit) the account and will cause a(n) _____(decrease/increase) in a liability account.

credit increased

When the stockholders receive a dividend, how would this affect the equity of a business? Assets are decreased and liabilities are decreased. Assets are decreased and equity is decreased. Equity is increased and assets are increased. Assets are increased and equity is decreased.

Assets are decreased and equity is decreased.

Which of the following statements is correct about prepaid accounts Prepaid accounts are also called prepaid expenses and are considered assets. Prepaid accounts are current expense accounts and are reported on the income statement. Prepaid accounts are another name for accounts receivable and are reported as an asset. Prepaid accounts are also called prepaid liabilities and are classified as liabilities.

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

Which of the following lists of items contain only examples of prepaid (expense) accounts? Prepaid insurance, prepaid accounts receivable, prepaid land Prepaid rent, prepaid insurance Prepaid insurance, unearned revenue, prepaid accounts payable Prepaid rent, prepaid land

Prepaid rent, prepaid insurance

The business earns $700 of consulting revenue. How would these earnings affect the total equity of a business? Revenues would be decreased, so equity is increased. Revenues increase, so total equity is increased. Liabilities are decreased, so total equity is increased. Revenues would be decreased, so equity would be decreased.

Revenues increase, so total equity is increased.

Which of the following accounts has a normal debit balance? (Check all that apply.) Supplies Cash Unearned Revenue Buildings Accounts receivable Accounts payable

Supplies Cash Buildings Accounts receivable

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

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

After entering a transaction into the accounting equation, an increase in total assets can be accompanied by a(n) _____ (increase/decrease) in total liabilities and _____(equity/assets).

increase equity

Which of the following statements explains the difference between a Balance column account and a T-account? T-accounts are a simple way to visualize the effect of a transaction; however, Balance column accounts are used in actual accounting systems. T-accounts show both the debit and credit side of a transaction, while the Balance column accounts show only the debit or the credit to the account. Balance column accounts reflect year-end balances, but T-accounts reflect the current balance at any point in time. Balance column accounts are a less formal way of recording a transaction, while T-accounts are used in actual business practice.

T-accounts are a simple way to visualize the effect of a transaction; however, Balance column accounts are used in actual accounting systems.

Which of the following statements is (are) correct regarding the posting process? (Check all that apply.) Entries are posted as soon as possible. Posting is only required at the end of the year. Entries must be posted to the ledger before financial statements are prepared. The posting process does not require detailed explanations in the ledger. The posting process creates a link between the ledger and the journal. The journal page is entered in the posting reference column of the journal.

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

Which of the following is a correct statement regarding the posting process? Posting is only required at the end of the year. The posting process requires detailed explanations in both the journal and the ledger. Entries must be posted to the ledger before financial statements are prepared.

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

The account title is shown at the top of a T-account. The left side of a T-account is called the ______ side, and the right side is called ______ the side.

debit 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

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

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

decreases