Accounting Coach: Debits and Credits
T or F: A sole proprietor's withdrawal of cash for personal use is recorded in the account Salaries Expense.
F
T or F: Recording an entry in the general journal is referred to as posting.
F
T or F: Sales commission expense is part of the cost of goods sold.
F
T or F: The sale of a company's old delivery truck would be recorded in a sales journal and in the account Sales.
F
A customer's check dated June 27 was received by XYZ Corp. on June 30 and was deposited on July 2. The amount of the check should be reported as part of XYZ's cash as of the following date: __________.
June 30
Purchasing supplies on credit will be recorded with a credit to the account __________ __________.
accounts payable
A company providing services on credit will debit the account __________ __________.
accounts receivable
Recording revenues when they are earned rather than when the money is received is part of which basis or method of accounting? accrual cash accrual
accrual
Entries to bring the accounts up to the accrual basis of accounting prior to issuing the financial statements are known as __________ entries.
adjusting
Accumulated Depreciation will be listed on which financial statement?
balance sheet
The financial statement that has the form of the accounting equation is the __________ __________.
balance sheet
The end-of-year balances in the asset accounts will become the following year's __________ balances.
beginning or starting or opening
The sole proprietor's drawing account is closed to the
owner's capital account
Which is not an expense on the income statement of a sole proprietorship?
owner's draw
The account that is debited when a sole proprietor withdraws some of the business's cash for personal use is
owner's drawing
The process of recording amounts from a journal into the general ledger is called __________.
posting
Under the accrual basis of accounting, owner's equity is increased by a bank loan collecting a receivable providing a service providing a service
providing a service
Under the accrual basis of accounting, which of the following will not cause a change in owner's equity? purchase of land advertising a product performing services on credit purchase of land
purchase of land
Sales of merchandise and fees earned from providing services are examples of the income statement element __________.
revenues
Freight-out is part of a company's __________.
selling expenses
If an amount is recorded with two of its digits transposed, the amount of the difference is evenly divisible by the digit __________.
9
The accounting equation for a corporation is assets = liabilities + stockholders' __________.
equity
The minimum number of accounts affected by every transaction is __________.
2
A sole proprietor's owner's equity balance was $10,000 at the beginning of the year and was $22,000 at the end of the year. During the year the owner invested $5,000 in the business and had withdrawn $24,000 for personal use. The sole proprietorship's net income for the year was $__________.
31,000
Bad Debts Expense is an income statement account used to report the losses associated with the asset account __________ __________.
Accounts Receivable
__________ Depreciation is a contra-asset account.
Accumulated
The word for a cost that has expired or has been matched with revenues is __________.
expense
__________-entry accounting refers to two or more amounts recorded for every business transaction.
Double
T or F: A lawsuit has been filed against a company. Even if the company's attorney believes that it is remote that the company will lose, the amount should be recorded in a liability account. True False True
T
T or F: A separate account for meals expense is helpful since business meals are expensed in full on the financial statements but may be only 50% deductible on the income tax return. True False True
T
T or F: Both assets and expenses will normally have debit balances.
T
T or F: Both liabilities and revenues will normally have credit balances.
T
T or F: If equipment used in the business is sold for cash and the amount is more than its book value, a gain is recorded.
T
T or F: The interest due on a long-term loan is usually recorded in an account which is separate from the account containing the principal amount.
T
T or F: The purchase of supplies should be recorded in the company's Purchases account.
T
"Book of original entry" describes
a journal
Each revenue and expense account will begin the accounting year with __________ balance.
a zero
Prepaid Insurance and Supplies on Hand are examples of __________ accounts.
asset
The Allowance for Doubtful Accounts is one of the accounts under the __________ section of the chart of accounts.
asset
The__________ accounts are usually listed first in the general ledger and in the chart of accounts.
asset
A listing of the account numbers and titles but without account balances is the __________ of accounts.
chart
A listing of the names and numbers of the accounts that are available for recording transactions is the __________ of accounts.
chart
Entries made at the end of the accounting year to the income statement accounts after the financial statements have been prepared are __________ entries.
closing
A check written by a company is recorded as a __________ to the general ledger account Cash.
credit
A profitable corporation's balance in Retained Earnings.
credit
A revenue account's normal balance.
credit
An entry on the right side of a T-account is.
credit
The Cash account will have a __________ balance if the amount of cash is negative.
credit
The balance you would expect in Accumulated Depreciation.
credit
The entry to Accounts Payable for a purchase on credit.
credit
The entry to Accounts Receivable when a customer's account is collected.
credit
The entry to increase J. Smith, Capital.
credit
The entry to increase Sales Taxes Payable.
credit
The entry to reduce the balance in Supplies on Hand.
credit
The entry to the Equipment account when equipment is scrapped.
credit
The expected balance in Purchase Discounts.
credit
The usual entry to Sales or to Service Revenues.
credit
This will increase the balance in a liability account.
credit
Usually the Allowance for Doubtful Accounts will have this type of balance.
credit
In a general journal entry, the account that is to be __________ will be indented.
creditied
When a company pays a bill by writing a check, the account Cash is
creditied
Entries in the general journal appear in order by __________.
date
A sole proprietor's Drawing Account will likely have a __________ balance.
debit
An entry on the left side of a T-account.
debit
Rent Expense, Wages Expense, and Advertising Expense are expected to have __________ balances.
debit
Sales Discounts will likely have a __________ balance.
debit
The entry to Accumulated Depreciation to remove the depreciation associated with a machine that was scrapped.
debit
The entry to J. Smith, Drawing when a withdrawal occurs.
debit
The entry to Payroll Withholdings Payable when remitting payroll taxes.
debit
The entry to increase the balance in Prepaid Insurance.
debit
The expected balance for Customer Deposits. debit credit debit
debit
This will decrease the balance in Accounts Payable. debit credit debit
debit
This will increase the balance in an asset account.
debit
To charge an account means to __________ an account.
debit
The account to be __________ will be listed first in a general journal entry.
debited
Recording each transaction with a minimum of one debit and one credit is known as __________ -entry bookkeeping.
double
The term __________ means to sum or to add up.
foot
Depreciation is likely to be first recorded in the__________ journal.
general
Posted transactions are stored in accounts contained in the __________ ledger.
general
The journal entry to record depreciation is recorded in the __________ journal.
general
The entries recorded in the general journal are also posted to accounts in the __________ __________.
general ledger
Generally, which accounts are closed at the end of the accounting year? balance sheet accounts income statement accounts income statement accounts
income statement accounts
At the end of the accounting year Depreciation Expense is closed to
income summary
Revenues have the effect of causing owner's or stockholders' equity to
increase
Under the accrual basis of accounting, a payment in late 2019 for the 2020 insurance expense will decrease the asset Cash and will
increase another asset
A __________ is known as the book of original entry.
journal
The amounts reported on a trial balance are the balances of the accounts contained in the general __________.
ledger
Customer Deposits and Unearned Fees are examples of accounts under the balance sheet classification of __________.
liabilites
Accounts Payable, Wages Payable, and Notes Payable are examples of __________ accounts.
liability
The sales journal, cash disbursement journal, and cash receipts journal are examples of __________ journals.
special
A control account in the general ledger is supported by the details in a __________ ledger.
subsidiary
The income statement accounts are referred to as
temporary
Sales and services that are provided on credit will cause an increase in the asset account __________ __________.
temporary accounts
Recording $945 as $954 is known as a __________ error.
transposition
The internal report that presents the balances in the accounts in either a debit or credit column in order to prove that the total of the debit balances is equal to the total of the credit balances is known as the __________ balance.
trial
A listing of all of the account balances in order to prove that the total of the debit balances is equal to the total of the credit balances is a __________ __________.
trial balance
Recording $1,000 in the account Property Tax Expense instead of Rent Expense __________ cause the trial balance to be out of balance.
will not
The trial balance __________ be out of balance if an entire journal entry is recorded twice. will will not will not
will not
