Connect 2
When recording a transaction, the debits must always equal the
credits
The equipment account is increased with an entry on the _______ side of the Equipment T-account
debit
The line item, common stock, on the balance sheet results from a ________ activity
financing
Effect on total assets when a company buys a cash register for a cash payment of $1,200
no effect. Equipment is increased and cash is decreased
when a company pays its supplier for amounts owed, its cash and accounts _________ are decreases
payable
accounts payable is increased with an entry on the ______ side of the T-Account
credit
What is the effect of recording the borrowing of $10,000 from a bank on the accounting equation?
1. assets increase 2. liabilities increase
Identify the key activities necessary to start a business
1. purchase assets 2. obtain financing
what are possible effects on the accounting equation when recording a transaction that increases an asset by $100
1. stockholders equity increases by $100 2. an asset decreases by $100 3. a liability account increases by $100
Which transactions are recorded in the accounting system?
both external exchanges and internal events
a company typically receives ______, an asset, when it issues stock to its owners
cash
A company issued 1,000 shares of its stock for $100,000. The increase in the common stock account would be recorded with a
credit
entries are first recorded in the ________ and then the ledger
journal
what measures a company's ability to pay liabilities as they come due in the short run
liquidity
What are investing activities?
purchasing equipment, purchasing land, purchasing company logo
What is an appropriate application of the cost principle regarding land that was purchased 20 years ago and has increased in value?
the land is reported on the balance sheet at its original price
MMM Pizza bought $1500 of supplies on account. What is the effect of recording this transaction on the company's total assets
total assets will increase