Accounting chapter 2

A ledger is: A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item. A journal in which transactions are first recorded. A collection of documents that describe transactions and events entering the accounting process. A list of all accounts with their debit balances at a point in time. A list of all accounts a company uses and includes an identification number assigned to each account.

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

A credit is used to record: A decrease in an expense account. A decrease in an asset account. An increase in an unearned revenue account. An increase in a revenue account. All of the above.

All of the above.

A list of all accounts used by a company, and the identification number assigned to each account, is called a: Ledger. Journal. Trial balance. Chart of accounts. General Journal.

Chart of accounts.

The right side of a T-account is a(n): Debit. Increase. Credit. Decrease. Account balance.

Credit.

Unearned revenues are: Revenues that have been earned and received in cash. Revenues that have been earned but not yet collected in cash. Liabilities created when a customer pays in advance for products or services before the revenue is earned. Recorded as an asset in the accounting records. Increases to retained earnings.

Liabilities created when a customer pays in advance for products or services before the revenue is earned.

A trial balance that balances is not proof of complete accuracy in recording transactions. True False

true

Transactions are first recorded in the ledger. true false

false

If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100. True False

false

Source documents: A Include the ledger. B Are the sources of accounting information. C Must be in electronic form. D Are based on accounting entries. E Include the chart of accounts.

Are the sources of accounting information.

Prepaid expenses are: Payments made for products and services that do not ever expire. Classified as liabilities on the balance sheet. Decreases in retained earnings. Assets that represent prepayments of future expenses. Promises of payments by customers.

Assets that represent prepayments of future expenses.

A debit is: An increase in an account. The right-hand side of a T-account. A decrease in an account. The left-hand side of a T-account. An increase to a liability account.

The left-hand side of a T-account.

Another name for the balance sheet is the statement of position. True False

true

The journal is known as a book of original entry. True False

true