Learnsmart ACC chap. 2

In May, Pasta Disasta, pays it's supplies $1000 for supplies received in April. the effect on the accounting equation is a ______.

$1000 decrease in liabilities and assets.

Company X issued $10,000 of common stock to its owners for cash. it recorded the transaction by increase assets and increasing liabilities. which of the following is true?

stockholders equity will be too low. liabilities will be too high. assets are correctly stated because the company got cash (A+)

Noodlecake signs a contract with an independent developed for program code for a game app which will not be received until two months from the signing of the contract. This event _____

is an exchange of promises and thus is not a transaction.

Show the effect of recording the borrowing of $10,000 from a bank on the accounting equation. ________ by $10,000.

liabilities increase and assets increase.

When a business issues common stock, what does it give to its owners?

stock certificates.

The posting of the journal entry to record the purchase of land for $30,000 cash will include what?

A debit to the land T-account. A credit to the cash T-account.

Identify the account title that may be used to record borrowing cash in exchange for a promissory note.

Note Payable

Which accounts are affected by borrowing from a bank?

Notes Payable and Cash.

Lox, Stock and Bagel, issued $100,000 of common stock. It recorded the transaction by increasing cash and decreasing common stock. As a result of this entry, ________.

The accounting equation will be out of balance.

A company's beginning Account Payable is $1000. It had a $10,000 of purchases on account and paid $7,000 of the amounts owed. The accounts Payable ending balance equals a _____ balance.

$4,000 credit. Accounts payable, a liabitly equals a $4,000 credit balance. (=$1000 credit + $10,000 credit - $7000 debit)

When a company borrows from a bank by signings a formal agreement, an asset titled cash is increased and a _____ titled ______ _______ is increased.

Liability. Notes Payable.

______ assets are to be used up or tuned into cash with 12 months or the next operating cycle, whichever is longer, whereas _____ assets are to used over a longer period.

Current assets are to be used up or turned into cash with 12 months or the next operating cycle whichever is longer. whereas noncurrent assets are to be used over a longer period

Acme Enterprises borrowed $20,000 from Last Bank on a 5-year note payable. Acme's journal entry to record this transaction will include a _____ of $20,000.

Debit to Cash and Credit to Notes Payable.

_____ financing is obtained from creditors and ______ financing is obtained from owners.

Debt from creditors. Equity from owners.

Identify what a company gives and receives when it invests in equipment by paying cash and signing a two year note

It received: equipment. it's gives: cash and promissory note.

the effect of journal entries on each account is summarized in the _______.

Ledger

A transaction may be recorded with an increase in an asset and a decrease in a

another

In May, Pizza Aroma ordered $1,200 of supplies and promised to pay the supplier next month. As soon as it recieves the supplies in May, Pizza Aroma should record _____ of $1,200.

debit to supplies (Asset) and credit to accounts payable (Liability).

Typical steps needed before a business can start selling goods/services to customers include _______

financing and investing activities.

The duality of effects refers to the fact that each transaction

has at least two effects on the basic accounting equation.

The line item, Land, on the balance sheet results from a _____

investing activity.

Entries are first recorded in the _____ and then summarized in the ledger

journal

what does a business typically receive when it issues stock to owners

cash

A company typically recieves _____, an asset, when it issues stock to its owners.

cash.

If a company issues $100,000 common stock, the Common Stock T-account will have $100,000 posted on the ______ side.

credit and right side

Noodlecake pays $300 cash to create the company's logo. The journal entry to record this transaction would include a _____ for $300.

credit to cash and debit to logo/trademarks.

A classified balance sheet shows subtotals for current _____ and current ____

current assets and current liabilities.

Liabilities that will be paid or fulfilled within 12 months are ______ liabilities.

current. (current liabilities)

What is the effect on total assets when a company purchases land for a cash payment of $10,000?

No affect. land A plus is increased, land A minus is decreased. both are assets, thus there is no affect.