ACC231 Chapter 3

The two roles of financial accounting are to: Multiple select question. - communicate information to external parties for decision making purposes. - measure business activities of the company. - measure and report results to taxing authorities. - report cost accounting information for internal decisions.

- communicate information to external parties for decision making purposes. - measure business activities of the company.

A journal entry should contain which of the following information? Multiple select question. Accounts and amounts debited Description of the transaction Accounts and amounts credited The end balance of each account The date

Accounts and amounts debited, Description of the transaction, Accounts and amounts credited, The date

The two functions of financial accounting are to measure business activities and prepare tax returns.

False

A ledger provides a chronological record of all transactions affecting the firm. True False

False A journal provides a chronological record of the transactions of a

Which of the following instances would cause the preliminary balance sheet not to balance?

Increase assets; increase expenses - An increase in expenses decreases net income, which decreases both retained earnings and stockholders' equity. With an increase in assets and decrease in stockholders' equity, the accounting equation does not balance.

what does a journal provide?

a chronological record of transactions affecting a company

A(n) Blank______ is maintained for each financial statement item, whereas a(n) Blank______ contains all of the accounts of the company. Multiple choice question. general ledger; journal journal; general ledger account; general ledger account; journal

account; general ledger

Which of the following accounts is not reported on an income statement?

assets

Which accounts require a debit entry to increase the account? Multiple select question. Revenue incorrect Cash correct Accounts payable Utility expense

cash and utility expense

A list of all account names used to record transactions of a company is referred to as the Multiple choice question. general journal balance sheet chart of accounts income statement

chart of accounts

formal account names used to record transactions in the journal are listed in the ____

chart of accounts

A journal provides a

chronological record of all transactions affecting a firm.

Which of the following is on the right side of an account? Multiple choice question. It depends on whether the account is being increased or decreased. Debit Credit

credit

The accounting equation is Assets = Liabilities + Stockholders' Equity. Accounts on the right side of the equal sign in this equation are increased with Multiple choice question. - credits. - both debits and credits depending on the account. - debits

credits

A proper journal entry includes the Blank______, the account and amount debited, the account and amount credited, and a brief explanation of the transaction. Multiple choice question. net income amount date financial statement type of account

date

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, credit

A T-account has space at the top for the account title and two sides for recording Blank______ and Blank______ to the account. Multiple choice question. inputs; outputs closing and post-closing. debits; credits assets; liabilities

debits; credits

Expenses Blank______ retained earnings; therefore, to increase any expense, one would Blank______ the expense account. Multiple choice question. decrease; credit decrease; debit increase; credit increase; debit

decrease; debit

what is a journal entry?

describe the format for recording a transaction

Which type of account is increased with a debit?

expense

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

journal entries are instantly posted to the ledger

Which of the following contains a list of transactions affecting each account and the account's balance? Multiple choice question. Ledger Journal Account

ledger

A chart of accounts is a Multiple choice question. list of all account names and numbers used by a company. correct record of a company's daily transactions. posting of journal entries to individual accounts.

list of all account names and numbers used by a company.

The process of transferring information from the journal to the ledger is referred to as Multiple choice question. transaction analysis. preparing adjustments. preparing journal entries. posting.

posting

The process of transferring information from a journal entry to the specific accounts affected in the general ledger is referred to as _____ (Enter only one word.)

posting or post

The purpose of a general ledger is to

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

Which of the following accounts is not reported on a balance sheet?

revenues

An income statement includes which of the following accounts? Multiple select question. - revenues - assets - expenses - stockholders' equity - liabilities

revenues and expenses

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

statement

Select the accounts that increase with a debit. Multiple select question. Accounts receivable Supplies Accounts payable Advertising expense Common stock

supplies, accounts receivable, advertising expense