week 2

A trial balance is a(n) (list/balance/chart) of accounts and their balances at a point in time and is used to confirm that the sum of debit account balances equals the sum of account balances. Use one word for each blank.

- List - Credit

When preparing a trial balance, there are certain steps that need to be followed. the correct order.

1. List each account title and its amount from the general ledger 2. Compute the total of debit balances and the total of credit balances 3. Verify that total debit balances equal total credit balances 4. Locate and resolve errors

Which statement best describes a T-account?

A T-account represents a ledger account and is a tool used to show the effects of one or more transactions.

Which of the following statements is (are) correct regarding a T-account?

A T-account represents a ledger account. A T-account may be used as a tool to visualize the effects of a transaction. A T-account will show the debit and credit effects of transactions.

It is a list of all ledger accounts and includes an identification number assigned to each account

A chart of accounts

Which of the following statements is the correct definition of a creditor?

A creditor is an individual or organization that has a right to receive payments from a business.

It is a collection of all accounts and balances that exist in a business.

A general ledger

It is a book of original entry that includes a chronological record of all transactions that have occurred within a business during a period occurred

A journal

Which of the following statements is (are) correct regarding a journal?

A journal is used to record business transactions. Transactions are generally entered in chronological order. In a journal, both the debit and credit side of the transaction can be seen.

Which of the following statements is the correct definition of a liability?

A liability is a claim by a creditor against the assets of a business.

Which of the following statements is (are) correct regarding the definition of a liability?

A liability is a debt owed by the business. A liability is a claim by creditors against the assets of a business. A liability can be settled by transferring assets or providing products or services to others.

The correct definition of an "account" includes which of the following?

A record of increases and decreases in a specific asset, liability, equity, revenue, or expense.

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.

It is a list of each account and its balance at any given time and is used to verify that debits = credits

A trial balance

Which of the following statements explains what a trial balance is?

A trial balance confirms that the sum of debit account balances equals the sum of credit account balances.

Which of the following statements is accurate regarding Accounts payable?

Accounts payable refer to promises to pay later, which may arise from the purchase of supplies or services.

Which statement is correct regarding entering transactions into the accounting equation?

After recording a transaction, the total of the right side of the accounting equation must equal the total of the left side of the accounting equation.

Which of the following statements is the best definition of an asset?

Assets are resources owned or controlled by a company and that have expected future benefits.

Assets are

Assets are resources owned or controlled by the business.

Equipment is a(n) (asset/liability/expense) account. It is reported on the (left/right) side of the accounting equation and is (increased/decreased) when equipment is purchased

Blank 1: asset Blank 2: left Blank 3: increased

Supplies are (assets/expenses/liabilities) until they are used. When they are used up, their costs are reported as (assets/expenses/liabilities).

Blank 1: assets Blank 2: expenses

Which of the following accounts would be considered an asset?

Building Supplies Cash Accounts receivable

Identify which of the following lists include only examples of assets.

Building, cash, accounts receivable

Cash can take many forms. From the lists of items below, choose the one which includes only items that would be defined as cash.

Coins, checks, money orders

J. Jackson invested $1,000 in his business. Show how to use T-accounts to record this transaction by selecting the correct answer below.

Debit Cash; credit Owner, Capital.

Which of the following statements is (are) accurate regarding equipment purchased within a business?

Equipment is an asset. Equipment cost is initially recorded as an asset and the cost is allocated over time to expense. Equipment is reported on the left side of the accounting equation. Equipment purchases are reported on the balance sheet.

Which of the following statements is the best definition of the Chart of Accounts?

It is a list of all ledger accounts which exist in a business and includes an identification number assigned to each account.

Given the descriptions below, which is (are) true regarding notes receivable?

It is the promise of another entity to pay a specific sum of money on a specified future date. Another name for a note receivable is a promissory note. Notes receivable is classified as an asset.

Which of the following statements correctly explains how to prepare a trial balance?

List each account title and its amount from the ledger. If an account has a zero balance, it may be omitted entirely. Compute the total of debit balances and the total of credit balances. Verify that the total debit balances equals the total credit balances.

Which of the following items would be considered "cash" and reflected in a company's Cash account?

Money orders Coins Checks

Which of the following would be included on an income statement?

Net income Total revenues Total expenses

Which of the following are accurate statements regarding how to report or treat prepaid accounts?

Over time, the expired portion of prepaid accounts is removed from the account and reported as an expense. The unexpired portion of prepaid accounts are treated as assets. The expired portion of prepaid accounts is reported on the income statement as an expense.

Which of the following statements is the correct definition of owner's equity?

Owner's equity is the owner's claim on a company's assets.

Which of the following would be considered a source document in an accounting system? (

Payroll records Sales receipt Purchase order Checks

Which of the following statements is correct about prepaid expenses?

Prepaid expenses are also called prepaid accounts and are considered assets.

The business earns $700 of consulting revenue. How would these earnings affect the total equity of a business?

Revenues increase, so total equity is increased

The business earns $2,800 cash for services performed. How would this transaction affect the total equity of a business?

Revenues would be increased, so equity is increased

Which of the following statements are accurate regarding supplies?

Supplies are assets until they are used. Unused supplies are treated as assets. When supplies are purchased, they are added to the Supplies account. Unused supplies can be recorded as Store Supplies, Office Supplies or Supplies.

Which of the following statements is accurate about the Land account?

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. The Land account is an asset.

Which of the following best and fully describes a general ledger?

The general ledger is a record containing all accounts used by a company.

Notes receivable is considered a(n)

asset

Notes receivable is considered a(n) (asset/liability).

asset

Prepaid accounts are assets (assets/liabilities) that represent prepayments of future expenses and are increased with a debit/credit).

assets,debit

The general ledger can be used to determine which of the following:

common and unique accounts used by a business. increases and decreases in all accounts in a business. all accounts used by a company and their balances.

L. Lyons started a business and invested $4,000. Illustrate how to record the transaction in the T-accounts by completing the following sentence. The Cash account would be (debited/credited) on the (left/right) side of the T-account and the Owner, Capital account would be (debited/credited) on the (left/right) side of the T-account.

debited; left; credited; right

Fill in the blank question. An account is a record of increases and ------ in a specific asset, liability, equity, revenue or expense.

decreases

True or false: Assets are claims by creditors against the company.

false

After entering a transaction into the accounting equation, an increase in total assets can be accompanied by a(n) (increase/decrease) in total liabilities or equity.

increase

Fill in the blank question. After entering a transaction into the accounting equation, an increase in total assets can be accompanied by a(n) (increase/decrease) in total liabilities or equity.

increase

Accounts payable refer to promises to pay later by the business and are classified as a(n) (asset/liability/expense) account.

liability

An income statement reports:

the revenues minus the expenses incurred by a business

True or false: The cost of land owned by a business is recorded in the Land account and this account is classified as an expense.

true