Financial Accounting_Chapter 2

Place the following steps in the order that a transaction would be entered in the general journal 1- Enter the transaction date 2- Enter an explanation for the entry 3-Enter name of account(s) debited and their amount(s) 4-Enter name of account(s) credited and their amount(s)

1- Enter the transaction date 2-Enter name of account(s) debited and their amount(s) 3-Enter name of account(s) credited and their amount(s) 4- Enter an explanation for the entry

The beginning balance in Acme's Accounts Payable was $4,000. Acme then bought $100 of supplies on account and paid $700 of the amount that it owed for supplies purchased on account last month. The ending balance in Acme's Accounts Payable was a credit of Blank

3400

Which of the following statements is (are) correct regarding a T-account? (Check all that apply.) A T-account reflects whether a transaction was posted correctly. A T-account represents a ledger account. A T-account will show the debits and credits of the transactions affecting the account.

A T-account represents a ledger account. A T-account will show the debits and credits of the transactions affecting the account.

Which of the following statements is (are) correct regarding a T-account? (Check all that apply.)

A T-account represents a ledger account. A T-account will show the debits and credits of the transactions affecting the account.

Which statement is false? A trial balance can verify the equality of debits and credits. A trial balance lists all the accounts with their current balances. A trial balance can be taken at any point in time. A trial balance is the same as a balance sheet

A trial balance is the same as a balance sheet.

On July 19, WX Company ordered $100 of supplies, promising to pay for them in August. The supplies were delivered and invoiced to WX on July 21 and WX paid $100 for them on August 10. The journal entry that WX made on August 10 would include a debit to Blank______.

Accounts Payable

Which of the following is used to record the summary of effects on one particular item? A trial balance A general journal A general ledger An account

An Account

What type of account appears on the left side of the accounting equation and is increased with amounts on the left side of T-accounts?

Asset

____ are economic resources owned by the company.

Assets

A company typically receives___, an asset, when it issues stock to its owners.

Cash

Financing provided by owners is referred to as ___

Contributed capital

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

Summarize ledger accounts?

Dollar amounts from journal entries are copied (posted) to the appropriate accounts in the ledger, so that account balances can be totaled.

Posting a transaction refers to the transferring of dollar amounts to each account affected by the transaction in the ____.

General ledger

Which statement is correct regarding entering transactions into the accounting equation? Multiple choice question. If one asset account is increased, then another asset account must be decreased in order for the left side of the accounting equation to be balanced. If total assets are increased, then liabilities only are increased as well. If total assets increased, then the total of liabilities plus stockholders' equity must also have increased. If one account is credited, then at least one other account

If total assets increased, then the total of liabilities plus stockholders' equity must also have increased.

Which of the following describes the order in which assets are reported under IFRS? Multiple choice question. Decreasing time to maturity Increasing time to maturity Increasing order of liquidity Decreasing order of liquidity

Increasing order of liquidity

Which of the following line items on a balance sheet results from an investing activity? (Check all that apply.) Land Buildings Equipment Common stock Account payable Notes payable

Land Buildings Equipment

A T-account is a simplified representation of a _____.

Ledger account

An amount posted on the right side of a T-account causes which accounts to increase? (Check all that apply.) Multiple select question. Assets Notes Payable Liabilities Cash Common Stock

Notes Payable Liabilities Common Stock

Mauricio, the owner of Pizza Aroma, spent $2,500 of his own money to take his family to Disney World. Because of the separate-entity assumption, Pizza Aroma's financial statements will report Blank______.

Nothing about this trip

Identify on which side of the Accounts Payable T-account the following would appear

Purchases of supplies on account would be on the credit side. Payments of supplies previously purchased on account on the debit side. Ending Accounts Payable balance on the credit side.

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

Stock certificates

On the balance sheet, contributed capital appears under_____

Stockholders equity

Company X issued 10,000 shares of its $1 par value stock to its owners for $10,000 cash. It recorded the transaction by increasing assets and increasing liabilities. Which of the following statements are correct? (Check all that apply.) Multiple select question. Stockholders' equity will be overstated. Liabilities will be overstated. Stockholders' equity will be understated. Liabilities will be understated. Assets will be understated. Assets will be overstated.

Stockholders' equity will be understated. Liabilities will be overstated.

Statements that are correct in regards to entering transactions in a journal.

Total dollar amount of debits must equal the total dollar amount of credits. Credited accounts should be indented.

True or false: An external event is a transaction the firm conducts with a separate economic entity. And why?

True; This can include transactions such as buying or selling goods or services, issuing or repurchasing shares of stock, borrowing or lending money, or entering into contracts or agreements with other entities.

Every transaction results in Blank______.

a balanced accounting equation at least two accounts being affected

A separate ______is maintained in order to accumulate the dollar effect of transactions on each financial statement item. (Enter only one word per blank.)

account

A common characteristic of (assets/liabilities) is their ability to provide benefits to the company.

assets

Lox, Stock and Bagel, Inc., issued $100,000 of stock. It recorded the transaction by increasing Cash and decreasing Common Stock. As a result of this entry, the accounting equation wil

be out of balance

Lox, Stock and Bagel, Inc., issued $100,000 of stock. It recorded the transaction by increasing Cash and decreasing Common Stock. As a result of this entry, the accounting equation will Blank

be out of balance

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

credit

he beginning balance in Ace's Accounts Payable was $3,000. Ace then bought $200 of supplies paying cash. It also paid $500 of the amount that it owed for supplies purchased on account last month. The ending balance in Ace's Accounts Payable is a____

credit of $2,500

In May, Pizza Aroma bought $1,200 of supplies and promised to pay the supplier next month. As soon as it receives the supplies in May, Pizza Aroma should record Blank______. (Select all that apply.) Multiple select question. credit to Accounts payable of $1,200 debit to Notes payable of $1,200 credit to Cash of $1,200 credit to Supplies of $1,200 debit to Supplies of $1,200

credit to Accounts payable of $1,200 and debit to Supplies of $1,200

A Blank______ to a stockholders' equity account causes total stockholders' equity to decrease.

debit

The account(s) that is/are Blank______ is/are always listed first in a journal entry.

debited

A number on the left side of a T-account means the account balance

either increased or decreased depending on the account

A(n) ____event involves an exchange between the company and a separate economic entity.

external

Accounts are updated by posting the effects listed in the general_____to the respective accounts in the general___.

general journal, general ledger

After entering a transaction into the accounting equation, an increase in total assets can be accompanied by a(n) (increase/decrease)in total liabilities and/or (equity/assets).

increase, equity

The line item, Equipment, on the balance sheet results from a(n) Blank______ activity.

investing

The separate entity assumption assumes the balance sheet of a corporation reports ______.

only the results of the business's activities

Stockholders' equity appears on the____ side of the accounting equation and are increased by amounts that appear on the ______side of stockholder equity T-accounts.

right, credit

Z Best, Inc. issued $1,000,000 of stock for cash. Z Best recorded the transaction by increasing cash and decreasing common stock and additional paid-in capital. As a result of this entry, Blank______. (C

the accounting equation is out of balance stockholders' equity is understated contributed capital is understated

Z Best, Inc. issued $1,000,000 of stock for cash. Z Best recorded the transaction by increasing cash and decreasing common stock and additional paid-in capital. As a result of this entry, Blank______. (Check all that apply.)

the accounting equation is out of balance stockholders' equity is understated contributed capital is understated

The __ balance is an internal report used to determine whether total debits equals total credits.

trial

True or false: IFRS and US GAAP financial statements report similar items, but use different financial statement formatting.

true