unit 2 smartbook
creditor
A creditor is an individual or organization that has a right to receive payments from a business.
Which of the following is the best definition of a source document in the accounting process?
A source document identifies and describes transactions and is the basis for entering an event into the accounting system.
notes receivable
Another name for a note receivable is a promissory note. Notes receivable is classified as an asset. It is the promise of another entity to pay a specific sum of money on a specified future date.
what accounts would be considered an asset
Building Supplies Cash Accounts receivable
what would be considered a source document in an accounting system?
Checks Sales receipt Payroll records Purchase order
Notes Payable
Notes payable is reported on the balance sheet. Notes payable is a formal promise to pay a certain sum of money on a specified future date. Notes payable is a liability account.
What are examples of prepaid (expense) accounts? (Check all that apply.)
Prepaid insurance Prepaid rent (not prepaid buildings, thats a diff. asset acc)
land account
The Land account is an asset. The Land account is increased on the left side of its T-account. The Land account is used to record the costs of land purchased by the business.
general ledger
The general ledger is a record containing all accounts used by a company.
unearned revenues
Unearned revenue is a liability account which is set up when a customer pays in advance for a product or service. Unearned revenues refer to a liability that is settled when a company delivers a product or performs a service.
supplies
When supplies are purchased, they are added to the Supplies account. Unused supplies can be recorded as Store Supplies, Office Supplies or Supplies. Unused supplies are treated as assets. Supplies are assets until they are used.
Prepaid Accounts
assets that represent prepayments of future expenses
When financial statements are prepared, unexpired prepaid accounts are recorded as _______________ and the expired portion of the prepaid account is reported as _____________________
assets, expense
would be considered "cash" and reflected in a company's Cash account?
check, money orders, coin
The general ledger can be used to determine
common and unique accounts used by a business. which accounts are being used by a company and their balances at any given time. increases and decreases in all accounts in a business.
Accrued Liabilities
expenses that have been incurred but have not been paid at the end of the accounting period ex. wages payable interest payable taxes payable
when credit sales are made, accounts receivable...
increase
Equity
owner's claim on a company's assets.
An account
record of increases and decreases in a specific asset, liability, equity, revenue or expense.
accounts payable
refer to promises to pay later, which may arise from the purchase of supplies or services.
When the product or service related to an unearned revenue is delivered, the earned portion of the unearned revenue is transferred to a _____ account.
revenue
A liability can be settled by
transferring assets or providing products or services to others.
Building account
used to record the costs of purchasing a store, office, warehouse or factory.