ACC 202 chapter 2

record a chronological listing of every transaction for a company

the purpose of a journal is to

Chart of accounts

A list of all account names used to record transactions of a company is referred to as a:

the amounts owed by customers

Accounts receivable are assets which represent

I only

If a company has an increase in total revenues of $10,000, which of the following is possible? Total assets increase by $10,000. Total liabilities increase by $10,000. Total stockholders' equity decreases by $10,000.

credit note payable debit to cash

Pluto Inc. borrows $3,000 from Second National Bank by signing a promissory note. Recording this transaction will include which of the following?

Debit Cash$3,000; credit note payable $3,000

Rawlings Corp. borrows $3,000 on a note payable from Third National Bank. Which of the following is used to record this transaction?

False

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

True

True or false: An external transaction is a transaction the firm conducts with a separate economic entity.

False

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

Service Revenue

Which of the following accounts normally has a credit balance? Cash. Accounts Receivable. Dividends. Service Revenue.

Revenue

Consistent with the _______recognition principle, companies record revenue at the time goods are provided to customers. (Enter only one word.)

expenses and dividends

Credits increase revenues, whereas debits increase

Debit

In a double-entry accounting system, the ____ represents the left side of the account

issued shares to stockholders

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

credit to common stock

Shannon Corporation issues common stock for $25,000. Recording this transaction will include a

Common Stock and retained earnings

The two components of stockholders' equity are

columns for debit and credit the account title

The type of information included in an account includes

revenues, expenses, dividends

What are the three components of retained earnings?

Revenue

Which type of account is increased with a credit?

Service Revenue

A credit is used to increase which of the following accounts?

Accounts payable

A debit is used to decrease which of the following accounts?

trial balance

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

account; general ledger

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

external

A(n) ___________ transaction involves an exchange between the company and a separate economic entity. (Enter one word per blank)

Account

All transactions related to a particular item over a period of time are summarized in a(n):

debits and credit

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

Debit to Cash Credit common stock

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

Transferring the debit and credit information from the journal to individual accounts in the general ledger.

Posting is the process of

provide in a single location the list of transactions affecting each account and the account's balance.

The purpose of a general ledger is to

false

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

provided goods or services to a customer.

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

Accounts Receivable

When a company performs services for a customer, and the customer agrees to pay for the services at a later date, the transaction is recorded in which account?

Common stock, Retained Earnings

Which of the following are stockholder equity accounts?

general ledger

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

Ledger

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

total debit amounts should always equal total credit amounts

Which of the following is true about a trial balance? Only income statement accounts are shown. Total debit amounts should always equal total credit amounts. Correct Only balance sheet accounts are shown. The trial balance shows the change in all account balances over the accounting period.

journals entries are instantly posted to the ledger

Which of the following represents a common advantage of a computerized accounting system?

The General Journal

Which of the following shows a chronological record of all transactions?

Repay amounts previously borrowed from the bank

Which of the following transactions causes a decrease in total liabilities?

Provide services to customers on account

Which of the following transactions causes an increase in stockholders' equity? Pay dividends to stockholders. Incorrect Obtain cash by borrowing from a local bank. Provide services to customers on account. Correct Purchase advertising on a local radio station.

Pay dividends to stockholders

Which of the following transactions decreases total assets? Purchase supplies on account. Receive a utility bill but do not pay it. Pay dividends to stockholders. Correct Receive cash from customers for sales in the current period.

Purchase office supplies on account

Which of the following transactions increases total liabilities? Pay for rent in the current period. Purchase equipment with cash. Pay dividends to stockholders. Purchase office supplies on account.

Expense

Which type of account is increased with a debit?