Accounting 230

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accounting equation

Assets​ = Liabilities​ + Equity

Decrease in accounts payable

Debit

increase to cash

Debit

increase to rent expense

Debit

normal balance of dividends

Debit

normal balance of land

Debit

Assets are economic resources that have no future benefits for the business.

False

Dividends are the expenses of a business.

False

Equity decreases with expenses and revenues.

False

Many liabilities have the word receivable in their titles.

False

The left side of the accounting equation measures the amount that the business owes to creditors and to the stockholders.

False

The total amount of assets a business possesses may or may not be equal to the total of liabilities and equity of the business.

False

Which of the following statements is true of the Common Stock​ account?

It is an equity account that has a normal credit balance.It

Which sequence correctly summarizes the accounting​ process?

Journalize​ transactions, post to the​ accounts, prepare a trial balance

A debt that a business owes is called​ ________.

Liability

Maxwell Plumbing Services earned​ $500 by completing a job for Smith Company. The​ $500 earned by Maxwell Plumbing Services is its​ ________.

Revenue

Which of the following statements is true of​ revenues?

Revenues increase​ equity, so a revenue​ account's normal balance is a credit balance.1

A shortened form of the ledger is called a​ ________.

T-account

A creditor who has loaned money to a business has a claim to some of the assets of the business until the debt is paid.

True

Assets are something of value that the business owns or has control of.

True

Common stock represents the basic ownership of every corporation.

True

Dividends are a distribution of a​ corporation's earnings to stockholders.

True

Equity increases when revenues are earned.

True

Liabilities represent​ creditors' claims on the​ business's assets.

True

The left side of the accounting equation always equals the right side of the accounting equation.

True

The three types of events that affect retained earnings are​ dividends, revenues, and expenses.

True

office supplies

asset, increase wit debit

prepaid rent

asset, increase with debit

The economic resources of a business such as​ furniture, building, and land are its​ ________.

assets

For Office​ Supplies, the category of account and its normal balance is​ ________.

assets and a debit balance

Which one of the following account groups normally has a debit​ balance?

assets and expenses

Which of the following accounts decreases with a​ credit?

cash

Which of the following accounts increases with a​ credit?

common stock

decrease to cash

cr

decrease to prepaid rent

cr

increase common stock

cr

increase to interest revenue

cr

increase to salaries payable

cr

decrease to accounts receivable

credit

decrease to office supplie

credit

increase to common stock

credit

increase to notes payable

credit

increase to unearned revenue

credit

normal balance of common stock

credit

normal balance of interest payable

credit

normal balance of notes payable

credit

normal balance of service revenue

credit

normal balance of unearned revenue

credit

increase to prepaid rent

debit

normal balance of advertising expense

debit

normal balance of office supplies

debit

normal balance of utilities expense

debit

decrease to accounts payable

dr

decrease to unearned revenue

dr

increase to accounts receivable

dr

increase to interest expense

dr

increase to notes receivable

dr

not an external user of a​ business's financial​ information

employee

The​ owners' claims to the assets of the business are called​ ________.

equity

For Retained​ Earnings, the category of account and its normal balance is​ ________.

equity and a credit balance

For​ revenues, the category of account and its normal balance is​ ________.

equity and a credit balance

For​ expenses, the category of account and its normal balance is​ ________.

equity and a debit balance

common stock

equity, increase with credit

interest revenue

equity, increase with credit

service revenue

equity, increase with credit

advertising expnse

equity, increase with debit

dividens

equity, increase with debit

utilities expense

equity, increase with debit

Dividends is​ a(n) ________ account that has a normal​ ________ balance.

equity; debit

A liability account is increased by a debit.

false

All asset accounts and equity accounts increase with a debit.

false

The Common Stock account is increased by a debit.

false

The accounting analysis system is used to record the dual effects of each transaction.

false

financial accouting

field of accounting that focuses on providing information for external decision makers

managerial accounting

field of accounting that focuses on providing information for internal decision makers

accounting

information system that measures business​ activities, processes that information into​ reports, and communicates the results to decision makes

Which one of the following account groups normally has a credit​ balance?

liabilities and revenues

Which one of the following account groups will decrease with a​ debit?

liabilities and revenues

The Salaries Payable account is​ a(n) ________.

liability account with a normal credit balance

accounts payable

liability, increase with credit

unearned revenue

liability, increase with credit

Which of the following accounts decreases with a​ debit?

notes payable

creditor

person or business to whom a business owes money

Which of the following accounts increases with a​ debit?

prepaid rent

FASB

private organization that oversees the creation and governance of accounting standards in the US

certified public accounting

professional accountants who serve the general public

Certified management accountants

professionals who work for a single company

Accounts Payable is increased with a credit

true

An account that normally has a debit balance may occasionally have a credit balance.

true

An asset account is increased by a debit.

true

Expenses decrease​ equity, so an expense​ account's normal balance is a debit balance.

true

The Dividends account is increased by a debit.

true

The balances in the liability and revenue accounts are increased with a credit.

true

The normal balance of an account is the increase side of the account.

true

The system of accounting in which every transaction affects at least two accounts is called the​ double-entry system.

true

The​ T-account is a summary device that is shaped like a capital T with debits posted on the left side of the vertical line and credits posted on the right side of the vertical line.

true

SEC

us governmental agency that oversees the US financial market

Accounts Receivable is​ a(n) ________ account and has a normal​ ________ balance.

​​asset; debit

Prepaid Rent is​ a(n) ________ account and has a normal​ ________ balance.

​​asset; debit

Accounts Payable is​ a(n) ________ account and has a normal​ ________ balance.

​​liability; credit


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