Chapter 2 Flashcards Accounting

Which of the following statements is (are) correct regarding the definition of a liability? (Check all that apply.) Multiple select question. 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 is a debt owed by the business. A liability is an asset waiting to be received by a business. A liability can be settled by transferring assets or providing products or services to others.

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

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

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

Which of the following statements is (are) accurate regarding equipment purchased within a business? Multiple select question. Equipment purchases are reported on the balance sheet. Equipment is reported on the left side of the accounting equation. Equipment cost is initially recorded as an asset and the cost is gradually expensed through the Accumulated Depreciation account. Equipment is an asset. 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.

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

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

Which of the following statements is accurate about the Land account? Multiple select question. The Land account is an asset. The Land account is used to record the costs of land purchased by the business. The Land account records the costs of purchasing an office, warehouse or store. The Land account is increased on the left side of its T-account. The Land account is an expense account.

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

Which of the following statements is the correct definition of a creditor? Multiple choice question. 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. A creditor is an individual or organization that owes money to a business. A creditor is an individual or organization which is trying to borrow money from a business.

an individual or organization that has a right to receive payments from a business

The Building account is a(n) (asset/liability/expense) account and is reported on the (left/right) side of the accounting equation.

asset, left

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

by, liability

There are several types of accounts that impact equity. Which of the accounts below cause equity to increase? Multiple choice question. Common Stock and Revenues Revenues and Assets Common Stock and Expenses Dividends and Assets

common stock and revenues

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