Acct Ch 3
When services are sold on account, ___________.
Accounts Receivable is debited ans Sales is credited
Which source document number is based on the date of the transaction (not sequential numbering starting at one and going up)?
Calculator or Cash Register Tape
The source document for all cash payments is a sales invoice.
False
When cash is paid for supplies, the cash account is debited.
False
When cash is received on account, two asset accounts increase.
False
When cash is used to pay for insurance, the asset account Prepaid Insurance decreases.
False
When cash is paid for insurance, _________.
The balance of the Prepaid Insurance account is increased
The source document for cash payments is a _________.
check
Transactions are recorded in a journal in order by _____________.
date
A source document is a form for recording transactions in chronological order.
False
Examples of source documents include checks, sales invoices, memorandums, and letters.
False
Recording transactions in a journal is called posting.
False
The accounts affected when cash is received from the owner as an investment are Cash and the drawing account.
False
Preparing source documents for each transaction is an application of the accounting concept ___________.
Objective Evidence
The account debited when cash is paid for supplies is __________.
Supplies
When supplies are bought on account, the account debited is ____________.
Supplies
A business form giving written acknowledgement fro cash received is a receipt.
True
A memorandum is a form on which a brief message is written describing a transaction.
True
A receipt is the source document for cash recieved from transactions other than sales.
True
Checks and sales invoices are pre-numbered in sequence to help account for them.
True
Informantion in a journal includes the debit and credit parts of each transaction other than sales.
True
The Objective Evidence accounting concept requires that there be proof that a transaction did occur.
True
The accounts affected when paying cash for rent are Rent Expense and Cash.
True
The accounts affected when paying cash to the owner for personal use are the drawing account and Cash.
True
The source document used when supplies are bought on account is a memorandum.
True
When cash is received from sales, both the cash account and the sales account are increased.
True
When services are sold on account, an asset account and a revenue are affected.
True
A journal entry consists of __________.
all of the above
If an error is recorded in a journal entry, _________.
all of the above
A memorandum is prepared when _________.
both A and B
A business form ordering a bank to pay cash from a bank account is a ________.
check
The entry to record receipt of cash from the owner as an investment is _____________.
debit Cash, credit Capital
When cash is paid for an expense, the expense account is ___________.
debited
Double-entry accounting assures that _________.
debits equals credits
The recording of debit and credit parts of a transaction is __________.
double-entry accounting
