Accounting Chapter 2

A(n) ______ is maintained for each financial statement item, whereas a(n) ______ contains all of the accounts of the company. a. Journal; general ledger b. Account; general ledger c. general ledger; journal d. account; journal

b. Account; general ledger

The type of information included in an account includes: a. The account title b. Columns for debits and credits c. A daily total d. A posting reference

A and B

Geo Corporation issues stock to investors for $100,000. Recording this transaction will include which of the following? (may be more than 1 choice) a. Credit common stock b. Credit revenues c. Debit to cash d. Debit to retained earnings

A and C

Identify the 3 components of retained earnings: a. Dividends b. Expenses c. Revenues d. Assets

A, B, C

Which of the follow are external transactions? a. Paying salaries to employees b. Purchasing inventory from suppliers c. Using supplies purchased last month d. Borrowing money from the bank

A, B, D

Accounts on the left side of the accounting equation (assets) are increased with a(n) ______ to the account, whereas accounts on the right side of the accounting equation are increased with a(n) ______.

Debit and credit

Which type of account is increased with a debit? a. Expense b. Stockholders' Equity c. Revenue d. Liability

Expense

Credits increase revenues, whereas debits increase....

Expenses and dividends

The type of accounts that affect retained earnings are:

Expenses, revenues, and dividends

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

False

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

False

True or false: The term debit means increase, and the term credit means decrease.

False

Which of the following contains a list of transactions affecting each account and the account's balance? a. General Ledger b. General Journal c. Account

General Ledger

A transaction is initially recorded in the journal, and then subsequently posted to the general ______.

Ledger

The process of transferring information from a journal entry to the specific accounts affected in the general ledger is referred to as ________.

Posting

The process of transferring information from the journal to the ledger is referred to as...

Posting

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

Provided goods or services to a customer

The purpose of a journal is to...

Record a chronological listing of every transaction for a company

Consistent with the _______ recognition principle, companies record revenue at the time goods are provided to customers.

Revenue

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

Trial balance

Carnival Company issues common stock to investors for $50,000. Which of the following is used to record this transaction? a. Debit cash; credit common stock. b. Debit cash; credit revenue. c. Debit common stock; credit cash. d. Debit common stock; credit retained earnings.

a. Debit cash; credit common stock.

Klick's journal shows a debit to cash and a credit to common stock. This journal entry indicates that Klick: a. Issued shares to stockholders b. Paid dividends to its stockholders c. Purchased shares from investors

a. Issued shares to stockholders

Which of the following includes the list of transactions affecting each individual account and the account's balance? a. Ledger b. Account c. Journal

a. Ledger

An account should have an account title, account number, a place for the date of the transaction, and two columns for: a. Revenues and expenses b. Debits and credits c. Assets and liabilities d. closing and post-closing

b. Debits and credits

Which of the following represents a common advantage of a computerized accounting system? a. Ensures accuracy of all the accounts in the general ledger b. Journal entries are instantly posted to the ledger c. Prevents errors in the preparation of journal entries

b. Journal entries are instantly posted to the ledger

The purpose of a general ledger is to: a. Record all transactions for a particular item b. Provide in a single location the list of transactions affecting each account and the account's balance c. Record a chronological list of the accounts used by a particular company

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

A(n) ______ is maintained for each financial statement item, whereas a(n) ______ contains all of the accounts of the company. a. Journal general ledger b. Account; journal c. Account; general ledger d. General ledger; journal

c. Account; general ledger

Which of the following contains a list of transactions affecting each account and the account's balance? a. General journal b. Account c. General Ledger

c. General Ledger

A chronological record of all economic events affecting a firm are recorded in a(n): a. Balance sheet b. Ledger c. Journal d. Trial balance

c. Journal

Credits increase revenues, whereas debits increase... a. Assets and liabilities b. Common stock and retained earnings c. Liabilities and stockholders' equity d. Expenses and dividends

d. Expenses and dividends