Chapter 2 The Accounting Cycle: During the Period

Accounts on the left side of the accounting equation (assets) are increased with a(n) Debit to the account, whereas accounts on the right side of the accounting equation are increased with a(n) Credit.

1. Debit 2. Credit

Geo Corporation issues stock to investors for $100,000. Recording this transaction will include which of the following?

1. Debit to cash 2. Credit common stock

The term debit means to place the entry on the **LEFT** hand side of the account, and the term credit means to place the entry on the **RIGHT** hand side of the account.

1. LEFT 2.RIGHT

Which of the following are external transactions?

1. Purchasing supplies from a vendor 2. Purchasing inventory from suppliers 3. Borrowing money from the bank 4. Paying salaries to employees

The type of information included in an account includes

1. columns for debits and credits. 2. the account title.

Accounts on the left side of the accounting equation (assets) are increased with DEBIT to the account, whereas accounts on the right side of the accounting equation are increased with a(n) CREDIT

1.Debit 2.Credit

Which of the following are stockholder equity accounts

Common stock Retained earnings

Carnival Company issues common stock to investors for $50,000. Which of the following is used to record this transaction?

Debit cash; credit common stock.

Which type of account is increased with a debit?

Expense

The term debit means increase, and the term credit means decrease.

FALSE

A balance sheet is a list of all accounts and their balances showing that debits equals credits.

False

True or false: A ledger provides a chronological record of all transactions affecting the firm.

False Reason: A journal provides a chronological record of the transactions of a firm.

Which of the following contains a list of transactions affecting each account and the account's balance?

General ledger

Analyze the following journal entry. What is the transaction that required this entry? Multiple choice question. Borro

Issue stock to investors

Which of the following includes the list of transactions affecting each individual account and the account's balance?

Journal

Which of the following is an external transaction?

Purchasing supplies from a vendor

Consistent with the **BLANK**recognition principle, companies record revenue at the time goods are provided to customers

Revenue

Which type of account is increased with a credit?

Revenue

The accounting equation is: Assets = Liabilities +

Stockholders' Equity

A list of all accounts and their balances at a particular date showing that debits equal credits is referred to as a(n)

Trail Balance

A journal provides a

a chronological record of all transactions affecting a firm

A(n) ______ is maintained for each financial statement item, whereas a(n) ______ contains all of the accounts of the company.

account; general ledger

The two components of stockholders' equity are

common stock and retained earnings.

Tabor Company issues $20,000 of common stock to investors. Recording this transaction will include a credit to Multiple choice question. revenues.

common stock.

An account should have an account title, account number, a place for the date of the transaction, and two columns for

debits and credits.

Credits increase revenues, whereas debits increase

expenses and dividends

Credits increase revenues, whereas debits increase

expenses and dividends.

Klick's journal shows a debit to cash and a credit to common stock. This journal entry indicates that Klick:

issued shares to stockholders

A transaction is initially recorded in the journal, and then subsequently posted to the general ledger

ledger

The process of transferring information from the journal to the ledger is referred to as

posting

Ursula Company's bookkeeper records revenue relating to a customer transaction. This indicates that the company

provided goods or services to a customer

Consistent with the recognition principle, companies record revenue at the time goods are provided to customers

revenue

The type of information included in an account includes

the account title. columns for debits and credits.

True or false: The two functions of financial accounting are to measure business activities and prepare tax returns.

False : The two functions of financial accounting are to measure business activities and communicate those measurements to external parties for decision-making purposes.

What are the three components of retained earnings?

Revenues, expenses, and dividends