Chapter 2
All transactions related to a particular item over a period of time are summarized in a(n):
Account.
A debit is used to decrease which of the following accounts?
Accounts Payable.
Providing services to customers for cash would be recorded with a:
Credit to Service Revenue.
Which of the following is possible for a particular business transaction?
Decrease assets; decrease liabilities.
A debit to Salaries Expense will:
Decrease stockholders' equity.
Account balances in the general ledger are updated for transactions through the process of:
Posting.
The process of transferring debit and credit information from the general journal to the general ledger is known as:
Posting.
After transactions are recorded in the journal, they are posted to the:
After transactions are recorded in the journal, they are posted to the:
A credit is used to decrease which of the following accounts?
Cash
A list of all account names used to record transactions of a company is referred to as a:
Chart of accounts.
Paying dividends to stockholders would be recorded with a:
Debit to Dividends.
The purchase of supplies on account would be recorded with a:
Debit to Supplies.
A credit to Cash will:
Decrease assets.
Which of the following does not represent an external business transaction?
Expiration of an insurance policy over time.
Providing services to customers for cash would have what effect on the accounting equation?
Increase total assets and total stockholders' equity.
Transactions are recorded using debits and credits in a(n):
Journal.
Purchasing land with cash would have what effect on the accounting equation?
No effect.
Which of the following transactions decreases total assets?
Pay dividends to stockholders.
Which of the following transactions decreases stockholders' equity?
Pay salaries for the current period.
Which of the following transactions causes a decrease in stockholders' equity?
Paying advertising expense for the current month.
Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits?
Prepare a trial balance.
Which of the following transactions increases total assets?
Provide services to customers on account.
Which of the following transactions increases total liabilities?
Purchase office supplies on account.
Which of the following transactions causes a decrease in total liabilities?
Repay amounts previously borrowed from the bank.
Which of the following accounts normally has a credit balance?
Service Revenue.
Which of the following accounts normally has a debit balance?
Supplies.
Which of the following shows a chronological record of all transactions?
The general journal.
Which of the following is true about a trial balance?
Total debit amounts should always equal total credit amounts.
Which of the following correctly describes a list of accounts and their balances, showing that total debits equal total credits?
Trial balance.