Chapter 2

Which of the following describes a general ledger?

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

The general ledger can be used to determine which of the following (select all answers which apply):

-common and unique accounts used by a business. a complete record of each transaction in one account. -increases and decreases in all accounts in a business. -which accounts are being used by a company and their balances at any given time.

The correct definition of an "account" includes which of the following?

A bank report listing checks written and deposits made during a month -A record of increases and decreases in a specific asset, liability, equity, revenue, or expense item A customer's purchase order for buying merchandise A cashier's tape register receipt showing total dollars of sales made

Which of the following statements is the best definition of an asset?

Assets represent the owner's claims against a company. -Assets are resources owned or controlled by a company and that have expected future benefits. Assets are the distributions to the owners of a company. Assets are claims against the company.

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, money orders, supplies Checks, coins, accounts payable -Coins, checks, money orders Coins, accounts receivables, checks

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

F

Which of the following items would be considered "cash" and reflected in a company's Cash account? (Check all that apply.)

Prepaid Insurance -Checks Notes Receivable -Money orders -Coins

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

Which of the following describes a general ledger?

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

Identify which of the following lists include only examples of assets.

Unearned revenue, Accounts payable, Cash Equipment, Dividends, Land -Building, Cash, Accounts receivable Cash, Accounts payable, Supplies

notes receivable is considered a(n)

asset

Prepaid accounts are ____ (assets/liabilities) that represent prepayments of future expenses and are increased with a ___(debit/credit).

assets, debit

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

decreases

Which of the following accounts would be considered an asset? (Check all that apply.)

-Building -Supplies Accounts payable -Accounts receivable Owner's capital -Cash

Which of the following would be considered a source document in an accounting system? (Check all that apply.)

-Checks -Payroll records -Sales receipt -Purchase order Budget

Given the descriptions below, which is (are) true regarding notes receivable? (Check all that apply.)

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

Select the statement below that best defines prepaid accounts.

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

Which of the following statements are accurate regarding supplies? (Check all that apply.)

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