Chapter 2
A journal provides a) a chronological record of transactions. b) the balances for each account. c) information about a transaction in several different places. d) a list of all accounts used in the business.
a
A T-account is a) used for accounts that have both a debit and credit balance. b) a way of depicting the basic form of an account. c) what the computer uses to organize bytes of information. d) a special account used instead of a trial balance.
b
After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to a) stockholders' equity. b) ledger accounts. c) the company's bank. d) financial statements.
b
An account consists of a) a title, a right side, and a debit balance. b) a title, a debit side, and a credit side. c) a title, a left side, and a debit balance. d) a title, a debit balance, and a credit balance.
b
In recording an accounting transaction in a double-entry system a) the number of debit accounts must equal the number of credit accounts. b) the amount of the debits must equal the amount of the credits. c) there must always be entries made on both sides of the accounting equation. d) there must only be two accounts affected by any transaction.
b
The normal balance of any account is the a) right side. b) side which increases that account. c) left side. d) side which decreases that account.
b
An account will have a credit balance if the a) debits exceed the credits. b) last transaction entered was a credit. c) first transaction entered was a credit. d) credits exceed the debits.
d
A compound journal entry involves a) four or more accounts. b) two accounts. c) three accounts. d) three or more accounts.
d
A debit to an asset account indicates a) an error. b) a decrease in the asset. c) a credit was made to a liability account. d) an increase in the asset.
d
The left side of an account is a) the balance of the account. b) a description of the account. c) blank. d) the debit side.
d