Chapter 2 Financial Accounting
Which of the following accounts normally has a credit balance?
Service Revenue.
A debit to Salaries Expense will:
Decrease stockholders' equity.
All transactions related to a particular item over a period of time are summarized in a(n):
Account
A debit is used to decrease which of the following accounts?
Accounts Payable.
The process of transferring debit and credit information from the general journal to the general ledger is known as:
Posting
A trial balance can best be explained as a list of
All accounts and their balances at a particular date.
Which of the following is not a step in the process of measuring external transactions?
All of the steps listed are steps in the measurement process of external transactions.
A credit is used to decrease which of the following accounts?
Cash
A list of all account names used to record transactions of a company is referred to as a:
Chart of Accounts
Providing services to customers for cash would be recorded with a:
Credit to Service Revenue
The purchase of supplies with cash would be recorded as
Debit Supplies; Credit Cash.
The payment for utilities of the current month would be recorded as
Debit Utilities Expense; Credit Cash.
Paying dividends to stockholders would be recorded with a:
Debit to Dividends.
The purchase of supplies on account would be recorded with a:
Debit to Supplies.
A credit to Cash will:
Decrease assets.
Which of the following is possible for a particular business transaction?
Decrease assets; decrease liabilities
Which of the following does not represent an external business transaction?
Expiration of an insurance policy over time.
After transactions are recorded in the journal, they are posted to the:
General ledger
Which of the following causes the accounting equation not to balance?
Increase assets; increase dividends.
Providing services to customers for cash would have what effect on the accounting equation?
Increase total assets and total stockholders' equity.
Which of the following transactions causes an increase in total assets?
Issue common stock in exchange for cash.
Transactions are recorded using debits and credits in a(n):
Journal
In the language of accounting, the term "debit" always means
Left-hand side.
Purchasing land with cash would have what effect on the accounting equation?
No effect
Providing services to customers on account for $100 is recorded as a.Accounts Receivable100 Service Revenue 100 b.Cash100 Accounts Receivable 100 c.Service Revenue100 Accounts Receivable 100 d.Service Expense100 Accounts Payable 100
Option A
Purchasing office supplies on account for $100 is recorded as: a.Supplies100 Accounts Payable 100 b.Cash100 Supplies 100 c.Supplies100 Cash 100 d.Accounts Payable100 Supplies 100
Option A
Which of the following transactions decreases total assets?
Pay dividends to stockholders.
Which of the following transactions decreases stockholders' equity?
Pay salaries for the current period.
Which of the following transactions causes a decrease in stockholders' equity?
Paying advertising expense for the current month.
Which of the following represents an external transaction?
Payment of utility bill.
Account balances in the general ledger are updated for transactions through the process of:
Posting
Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits?
Prepare a trial balance
Which of the following transactions causes an increase in stockholders' equity?
Provide services to customers on account.
Which of the following transactions increases total assets?
Provide services to customers on account.
Which of the following transactions increases total liabilities?
Purchase office supplies on account.
Which of the following transactions causes a decrease in total liabilities?
Repay amounts previously borrowed from the bank.
A credit is used to increase which of the following accounts?
Service Revenue.
Which of the following accounts normally has a debit balance?
Supplies
Which of the following shows a chronological record of all transactions?
The general journal.
If a company has an increase in total expenses of $10,000, which of the following is possible?
Total assets decrease by $10,000.
If a company has an increase in total revenues of $10,000, which of the following is possible? Total assets increase by $10,000. Total liabilities increase by $10,000. Total stockholders' equity decreases by $10,000.
Total assets increase by $10,000.
Which of the following is true about a trial balance?
Total debit amounts should always equal total credit amounts.
Which of the following correctly describes a list of accounts and their balances, showing that total debits equal total credits?
Trial balance
A debit is used to increase which of the following accounts?
Utilities Expense.