accounting chapter 2
a list of all accounts and their balances at a particular date showing the debits equal credits is referred to a a ____ ___
trial balance
which of the following are external transactions
-borrowing money from the bank -purchasing inventory from suppliers -paying salaries to employees
which of the following are stockholder equality accounts?
-common stock -retained earnings
which of the following are stockholder equity accounts?
-retained earnings -common stock
the two roles of financial accounting are to:
1. communicate information to external parties for decision making purposes 2. measure business activities of the company
a ____ is maintained for each financial statement item, where as a __ contains all of the accounts of the company.
account; general ledger
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
the accounting equation is
assets= liabilities +stockholder's equity
smith's company's journal shows a debit to cash and a credit to notes payable, both for 15,000. this indicates that smith company
borrowed 15000 cash and signed a note
tabor company issues $20,000 of common stock to investors. recording this transaction will include a credit to
common stock
the two components of stockholders equity are
common stock and retained earnings
pluto inc. borrows 3,000 from second national bank by signing a promissory note. recording this transaction will include which of the following?
credit note payable debit cash
Shannon Corporation issues common stock for $25,000. Recording this transaction will include a
credit to common stock
carnival company issues commons tock to investors for 50,000. which of the following is used to record this transaction?
debit cash; credit common stock
rolan corporation borrows 10,000 from the bank by signing a promissory note. recording this transaction will include?
debit to cash credit to notes payable
accounts on the left Side of the accounting equation(assets) are increased with a _____ to the account, whereas accounts on the right side of the accounting equation are increased with a ___
debit, credit
A T-Account has space at the top for the account title and two sides for recording ______ and ______ to the account
debits and credits
an account should have an account title, account number, a place for the date of transactions, and two columns for
debts and credits
dividends paid to stockholders will cause retained earnings to
decrease
what is the effect of dividends on retained earnings?
decrease
the purpose of a journal is to
def: provides chronological record of all transactions affecting a firm. Prior to the widespread use of computers, companies, recorded their transactions in paper-based journals.
which type of account is increased with a debt?
expense
credits increase revenues, whereas debits increase ___
expenses and dividends
which contains a list of transactions affecting each account and the account's balance?
general ledger
revenues cause retained earnings to
increase
what effect does revenue have on retained earnings
increase
net income ____ retained earnings
increases
klick's journal shows a debit to cash and a credit to common stock. this journal entry indicates that Klick:
issued shares to stockholders
computerized system
journal entries are instantly posted to the general ledger
manual sytem
journal entries are posted periodically to the general ledger
a transaction is initially recorded in the journal, and then subsequently posted in the general _____
ledger
which of the following includes the list of transactions affecting each individual account and the account balance?
ledger
the term debit means to play the entry on the _____ hand side of the account
left
the accounting equation is: Assets=_______ + stockholders equity
liabilities
the process of transferring information from the journal to the ledger is referred to as
posting
the purpose of a general ledger is to
provide in a single location in the list of transactions balance.
Ursula Company's bookkeepers records revenue relating to a customer transaction. This indicates that the company
provides goods or services to a customer
which of the following is an external transaction
purchasing supplies from a vendor
consistent with the ___ recognition principle, companies record revenue at the time goods are provided to customers.
revenue
which type of account is increased with credit
revenue
the two basic components for calculating net income are _____ and ___
revenues and expenses
the types of accounts which affect retained earnings are
revenues, expenses, and dividends
what are the three components of retained earnings?
revenues, expenses, and dividends
term credit means to place the entry on the ___ hand side of the account
right
an simplified version that I used informally for analysis instead of drawing formal general ledger account is referred to as a
t-account
the type of information included in an account includes
the account title -columns for debts and credits
accounts receivable are assets which represent
the amounts owed by customers
