chap 2 quiz

Accounts that require a credit to increase the account

Revenue, common stock

steps for measuring transactions:

1) use a source document to identify accounts affected; 2) analyze the impact of the transaction on the accounting equation; 3) assess whether the transaction results in a debit or credit to account balances; 4) record the transaction in a journal; 5) post the transaction to the general ledger

a separate ____ is used to post transactions and provides a summary of the effects of all transactions for a particular item

account

The full set of accounting procedures used to measure and communicate business transactions is referred to as the

accounting cycle

If a transaction decreases cash by $100, the balance sheet will balance if what occurs

another asset is increased, a liability is decreased

The cost of equipment is typically recorded as a(n) ____, while the cost of repairs is typically recorded as a(n) ____.

asset; expense

accounts receivable are

assets in the balance sheet

What is the correct order of the items found on the balance sheet?

assets, liabilities, stockholders' equity

the accounting equation is:

assets= liabilities + stockholders' equity

Shriver Corp. borrows $25,000 from a bank and signs a two-year promissory note. What accounts will be affected by this transaction and what is the effect?

cash increases, notes payable increases

A list of all account names used to record transactions of a company is referred to as the

chart of accounts

which are stockholder equity accounts?

common stock, retained earnings

expense

cost of conducting business during the period

A proper journal entry should have which account title and amount indented?

credit

In a double entry accounting system, the right side of the account is represented by a(n)

credit

Roland Corporation borrows $10,000 from the bank by signing a promissory note. Recording this transaction will include a:

credit to notes payable, debit to cash

A proper journal entry includes the ____, the account and amount debited, the account and amount credited, and a brief explanation of the transaction

date

In a double-entry accounting system, a(n) ____ represents the left side of the account.

debit

To increase an expense account, you should ____ the expense account

debit

Accounts on the left side of the accounting equation (assets) are increased with a(n) ____ to the account, whereas accounts on the right side of the accounting equation are increased with a(n) _____.

debit; credit

The sum of accounts with ____ balances must equal the sum of the accounts with ____ balances

debit; credit

For every journal entry, total ____ must be equal to total credits.

debits

A t-account has space at the top for the account title and two slides for recording ____ and ____ to the account.

debits/credits; increases/decreases

When a company pays salary expense, the balance sheet effects are to

decrease stockholders' equity, decrease assets

the first step for analyzing the effect of transactions is:

determine one account in the accounting equation that will increase or decrease

dividend

distribution of cash to stockholders

A(n) represents a payment of cash to the stockholders of a company

dividend

Crane purchases equipment by signing a note payable with the equipment dealer for $10,000. The accounts affected for Crane are

equipment and notes payable

A(n) ____ transaction involves an exchange between the company and a separate economic entity

external

accounting transactions are classified as:

external or internal transactions

paying salaries to employees, purchasing inventory from suppliers, borrowing money from the bank

external transactions

A(n) ____ ____ is a collection of accounts used to keep track of increases and decreases in financial position elements

general ledger

revenues cause retained earnings to

increase

A(n) ___ transaction is an event that affects the financial position of the company but does not include an exchange with a separate economic entity

internal

____ transactions typically are recognized at the end of the period.

internal

using supplies on hand

internal transaction

A chronological record of all economic events affecting a firm are recorded in a(n)

journal

A(n) ____ entry describes the format for recording a transaction.

journal

The process of transferring information from the journal to the ledger is referred to as

posting

prepaid rent is

rent paid in advance

types of accounts which affect retained earnings

revenues, dividends, expenses

An account that is used informally for analysis instead of drawing a formal general ledger account is referred to as a(n)

t-account

The type of information included in an account includes

the account number, the account title, columns for increases and decreases

Claire purchases equipment for $10,000 by paying $3,000 in cash and borrowing $7,000 from the bank. The number of accounts affected by this transaction is

three

A list of all accounts and their balances at a particular date showing that debits equal credits is referred to as a(n)

trial balance