ACCT 2301 Ch 2
Which of the following statements is true of a trial balance? A trial balance is also known as a balance sheet. A trial balance is the first step in the accounting cycle. A trial balance is also known as the chart of accounts. A trial balance is a list of all accounts with their balances.
A trial balance is a list of all accounts with their balances.
Which of the following is an asset account? Unearned Revenue Wages Payable Notes Payable Accounts Receivable
Accounts Receivable
Which of the following is a financial statement that presents a business's accounting equation? Balance Sheet Chart of Accounts Trial Balance Income Statement
Balance Sheet
Ranger Pool Company received cash of $40,000 and issued common stock. Which of the following accounts will be credited? Common Stock Cash Accounts Receivable Accounts Payable
Common Stock
________ represents a debt owed for renting a building.
Rent Payable
Which of the following is a source document that provides the evidence and data for accounting transactions? Ledger Trial balance Journal Sales invoice
Sales invoice
Which of the following statements regarding the accounting equation is incorrect? Each category of the accounting equation contains accounts. The equation is the basic tool of accounting. The equation consists of three categories: assets, liabilities, and equity. The equation can be stated as assets plus liabilities equals equity.
The equation can be stated as assets plus liabilities equals equity.
For each account, identify whether the changes would be recorded as a debit (DR) or credit (CR).
a. Increase to Accounts Receivable DR b. Decrease to Unearned Revenue DR c. Decrease to Cash CR d. Increase to Interest Expense DR e. Increase to Salaries Payable CR f. Decrease to Prepaid Rent CR g. Increase to Common Stock CR h. Increase to Notes Receivable DR i. Decrease to Accounts Payable DR j. Increase to Interest Revenue CR
The ability of a company to pay its debts can be evaluated by using the ________.
debt ratio
A shortened form of the ledger is called a ________.
T-account