CH 2 Learnsmarts to Review

The Retained Earnings account is increased with an entry on the -------side of the account. (Enter one word per blank.)

right

Company X issued $10,000 of common stock to its owners for cash. It recorded the transaction by increasing assets and increasing liabilities. Which of the following statements are correct? (Select all that apply)

Liabilities will be too high. Stockholders' equity will be too low.

What is the effect on total assets when a company purchases a cash register for a cash payment of $1,200?

No effect

When a business issues common stock, what does it give to its owners?

Stock certificates

A transaction may be recorded with an increase in an asset and a decrease in a(n)

another asset

Z Best, Inc. issued $1,000,000 of common stock for cash. By accident, Z Best recorded the transaction by increasing cash and decreasing stockholders' equity. As a result of this entry, ______. (Check all that apply.) Multiple select question.

common stock is understated the accounting equation is out of balance stockholders' equity is understated

A company purchased supplies and promised to pay $200 for them next month. The increase in Accounts Payable would be recorded with a

credit

A company paid $500 cash for a new printer. The entry to record this transaction would include a ______ to Cash.

credit,

A company paid $500 for supplies that it purchased last month. The decrease in liabilities would be recorded with a Blank______ to Accounts Payable.

debit, Credits increase, not decrease, Accounts Payable.

The general journal, also known as the journal, ______. (Check all that apply.) Multiple select question.

is where the effects of each transaction is recorded chronologically is where transactions are first recorded does not provide account balances

Morris Lest, Inc. purchased machinery for $10,000 cash. The effect of this transaction is to cause ______.

total assets to remain the same