Account 101- Ch 2: Accounting Cycle

1. Which of the following events will not pose an immediate impact on the accounting equation of a retail company? Sale of merchandise A change in marketing strategyCorrect Payment of employee salaries Purchase of supplies

A change in marketing strategyCorrect

The term debit means to place the entry on the ------ hand side of the account, and the term credit means to place the entry on the___________hand side of the account.

Blank 1: left Blank 2: right

Which of the following contains a list of transactions affecting each account and the account's balance? General ledger Account General journal

General ledger

Which of the following represents a common advantage of a computerized accounting system?

Journal entries are instantly posted to the ledger

Which of the following includes the list of transactions affecting each individual account and the account's balance? journal Account Ledger

Ledger

Which of the following is an external transaction? Using supplies on hand Purchasing supplies from a vendor Earning revenues after cash is received

Purchasing supplies from a vendor

Which type of account is increased with a credit? Revenue Dividend Expense Asset

Revenue

A journal provides a listing of all accounts used by a firm. summary of all the debits and credits made during the period. chronological record of all transactions affecting a firm.

chronological record of all transactions affecting a firm.

The type of information included in an account includes columns for debits and credits. a posting reference. the account title. a daily total.

columns for debits and credits.

Shannon Corporation issues common stock for $25,000. Recording this transaction will include a credit to accounts receivable. credit to revenues. debit to retained earnings. credit to common stock.

credit to common stock.

Roland Corporation borrows $10,000 from the bank by signing a promissory note. Recording this transaction will include: credit to retained earnings debit to accounts receivable credit to notes payable debit to cash

credit to notes payable debit to cash

An account should have an account title, account number, a place for the date of the transaction, and two columns for assets and liabilities. closing and post-closing. debits and credits. revenues and expenses.

debits and credits.

An account should have an account title, account number, a place for the date of the transaction, and two columns for debits and credits. revenues and expenses. closing and post-closing. assets and liabilities.

debits and credits.

Credits increase revenues, whereas debits increase expenses and dividends. assets and liabilities. liabilities and stockholders' equity. common stock and retained earnings.

expenses and dividends.

Klick's journal shows a debit to cash and a credit to common stock. This journal entry indicates that Klick purchased shares from investors paid dividends to its stockholders issued shares to stockholders

issued shares to stockholders

Ursula Company's bookkeeper records revenue relating to a customer transaction. This indicates that the company received a cash payment from a customer. provided goods or services to a customer. signed a contract with a customer.

provided goods or services to a customer.

Accounts receivable are assets which represent Multiple choice question. Accounts receivable are assets which represent Multiple choice question. the amounts owed by customers. net income for the period. total revenues for the period. the amounts owed to suppliers.

the amounts owed by customers.

When a company performs services for a customer, and the customer agrees to pay for the services at a later date, the transaction is recorded in which account?

Accounts receivable

When a company performs services for a customer, and the customer agrees to pay for the services at a later date, the transaction is recorded in which account? Prepaid services Deferred revenue Accounts payable Accounts receivable

Accounts receivable

Beta Company paid utilities expense of $2,000 for the current month. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Assets will decrease by $2,000, liabilities will remain unchanged, and stockholders' equity will decrease by $2,000 Assets will increase by $2,000, liabilities will increase by $2,000, and stockholders' equity will remain unchanged Assets, liabilities, and stockholders' equity will remain unchanged Assets will decrease by $2,000, liabilities will increase by $2,000, and stockholders' equity will remain unchanged

Assets will decrease by $2,000, liabilities will remain unchanged, and stockholders' equity will decrease by $2,000 Correct

5. Sampson Corporation pays dividends of $9,000 to shareholders. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Assets will decrease by $9,000, liabilities will remain unchanged, and stockholders' equity will increase by $9,000 Assets will increase by $9,000, liabilities will remain unchanged, and stockholders' equity will increase by $9,000 Assets will remain unchanged, liabilities will increase by $9,000, and stockholders' equity will decrease by $9,000 Assets will decrease by $9,000, liabilities will remain unchanged, and stockholders' equity will decrease by $9,000 PrevQuestion 5 linked to 6 and 7 of 22 Total5 6 7 of 22Visit question map

Assets will decrease by $9,000, liabilities will remain unchanged, and stockholders' equity will decrease by $9,000

Amber Corporation provided services to customers on account for $26,000. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Assets will decrease by $26,000, liabilities will remain unchanged, and stockholders' equity will increase by $26,000 Assets will increase by $26,000, liabilities will increase by $26,000, and stockholders' equity will remain unchanged Assets will increase by $26,000, liabilities will remain unchanged, and stockholders' equity will increase by $26,000 Liabilities will decrease by $26,000, stockholders' equity will remain unchanged, and assets will increase by $26,000 PrevQuestion 6 linked to 7 of 22 Total6 7 of 22Visit question map

Assets will increase by $26,000, liabilities will remain unchanged, and stockholders' equity will increase by $26,000

Palmer Corporation borrows $40,000 cash by signing a note with the bank. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Assets will increase by $40,000, liabilities will increase by $40,000, and stockholders' equity will remain unchanged Assets will increase by $40,000, liabilities will decrease by $40,000, and stockholders' equity will remain unchanged Assets will increase by $40,000, liabilities will remain unchanged, and stockholders' equity will increase by $40,000 Assets will increase by $40,000, liabilities will remain unchanged, and stockholders' equity will decrease by $40,000

Assets will increase by $40,000, liabilities will increase by $40,000, and stockholders' equity will remain unchanged

4. Bell Company purchased supplies for $700 cash. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Assets will increase by $700, liabilities will remain unchanged, and stockholders' equity will increase by $700 Assets will increase by $700, liabilities will increase by $700, and stockholders' equity will remain unchanged Assets will remain unchanged, liabilities will increase by $700, and stockholders' equity will remain unchanged Assets will remain unchanged, liabilities will remain unchanged, and stockholders' equity will remain unchanged

Assets will remain unchanged, liabilities will remain unchanged, and stockholders' equity will remain unchanged

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

Blank 1: trial Blank 2: balance

Geo Corporation issues stock to investors for $100,000. Recording this transaction will include which of the following?

Credit common stock Debit to cash

A company pays cash for utilities. The company records this transaction with a: Credit to Accounts Payable Credit to Accounts Receivable Credit to Cash Credit to Retained Earnings

Credit to Cash

A company bills customers for services provided. The company records this transaction with a: Debit to Cash Debit to Retained Earnings Credit to Accounts Payable Credit to Service Revenue

Credit to Service Revenue

Pluto Inc. borrows $3,000 from Second National Bank by signing a promissory note. Recording this transaction will include which of the following? Credit revenue Debit cash Credit note payable Debit notes receivable

Debit cash Credit note payable

Rawlings Corp. borrows $3,000 on a note payable from Third National Bank. Which of the following is used to record this transaction? Debit account receivable $3,000; credit note payable $3,000. Debit note payable $3,000; credit note receivable $3,000. Debit cash $3,000; credit note receivable $3,000. Debit cash $3,000; credit note payable $3,000.

Debit cash $3,000; credit note payable $3,000.

Carnival Company issues common stock to investors for $50,000. Which of the following is used to record this transaction? Debit cash; credit revenue. Debit cash; credit common stock. Debit common stock; credit retained earnings. Debit common stock; credit cash.

Debit cash; credit common stock.

A company borrows cash from a local bank. The company records this transaction with a: Debit to Accounts Receivable Debit to Cash Credit to Accounts Payable Credit to Retained Earnings

Debit to Cash

A company purchases supplies for cash. The company records this transaction with a: Debit to Cash Debit to Supplies Credit to Accounts Receivable Credit to Retained Earnings

Debit to Supplies

Which type of account is increased with a debit? Stockholders' Equity Revenue Expense Liability

Expense

A ledger provides a chronological record of all transactions affecting the firm. True False

False

True or false: A balance sheet is a list of all accounts and their balances showing that debits equals credits. True false question.

False

The type of information included in an account includes a posting reference. columns for debits and credits. a daily total. the account title.

columns for debits and credits. the account title.

The type of information included in an account includes a posting reference. the account title. a daily total. Each transaction is posted to the account separately. columns for debits and credits.

columns for debits and credits. the account title.

The two roles of financial accounting are to: communicate information to external parties for decision making purposes. measure and report results to taxing authorities. report cost accounting information for internal decisions. measure business activities of the company.

communicate information to external parties for decision making purposes. measure business activities of the company.

True or false: The two functions of financial accounting are to measure business activities and prepare tax returns.

false: Reason: The two functions of financial accounting are to measure business activities and communicate those measurements to external parties for decision-making purposes.

A transaction is initially recorded in the journal, and then subsequently posted to the general_________

ledger

The process of transferring information from a journal entry to the specific accounts affected in the general ledger is referred to as_______

posting or post

The process of transferring information from the journal to the ledger is referred to as preparing journal entries. posting. transaction analysis. preparing adjustments.

posting.

The purpose of a general ledger is to record a chronological listing of the accounts used by a particular company. record all transactions for a particular item. provide in a single location the list of transactions affecting each account and the account's balance.

provide in a single location the list of transactions affecting each account and the account's balance.

The purpose of a journal is to maintain a balance for each account. record all transactions for a particular item. record a chronological listing of every transaction for a company.

record a chronological listing of every transaction for a company.

Consistent with the________recognition principle, companies record revenue at the time goods are provided to customers. (Enter only one word.)

revenue