Accounting 230
accounting equation
Assets = Liabilities + Equity
Decrease in accounts payable
Debit
increase to cash
Debit
increase to rent expense
Debit
normal balance of dividends
Debit
normal balance of land
Debit
Assets are economic resources that have no future benefits for the business.
False
Dividends are the expenses of a business.
False
Equity decreases with expenses and revenues.
False
Many liabilities have the word receivable in their titles.
False
The left side of the accounting equation measures the amount that the business owes to creditors and to the stockholders.
False
The total amount of assets a business possesses may or may not be equal to the total of liabilities and equity of the business.
False
Which of the following statements is true of the Common Stock account?
It is an equity account that has a normal credit balance.It
Which sequence correctly summarizes the accounting process?
Journalize transactions, post to the accounts, prepare a trial balance
A debt that a business owes is called ________.
Liability
Maxwell Plumbing Services earned $500 by completing a job for Smith Company. The $500 earned by Maxwell Plumbing Services is its ________.
Revenue
Which of the following statements is true of revenues?
Revenues increase equity, so a revenue account's normal balance is a credit balance.1
A shortened form of the ledger is called a ________.
T-account
A creditor who has loaned money to a business has a claim to some of the assets of the business until the debt is paid.
True
Assets are something of value that the business owns or has control of.
True
Common stock represents the basic ownership of every corporation.
True
Dividends are a distribution of a corporation's earnings to stockholders.
True
Equity increases when revenues are earned.
True
Liabilities represent creditors' claims on the business's assets.
True
The left side of the accounting equation always equals the right side of the accounting equation.
True
The three types of events that affect retained earnings are dividends, revenues, and expenses.
True
office supplies
asset, increase wit debit
prepaid rent
asset, increase with debit
The economic resources of a business such as furniture, building, and land are its ________.
assets
For Office Supplies, the category of account and its normal balance is ________.
assets and a debit balance
Which one of the following account groups normally has a debit balance?
assets and expenses
Which of the following accounts decreases with a credit?
cash
Which of the following accounts increases with a credit?
common stock
decrease to cash
cr
decrease to prepaid rent
cr
increase common stock
cr
increase to interest revenue
cr
increase to salaries payable
cr
decrease to accounts receivable
credit
decrease to office supplie
credit
increase to common stock
credit
increase to notes payable
credit
increase to unearned revenue
credit
normal balance of common stock
credit
normal balance of interest payable
credit
normal balance of notes payable
credit
normal balance of service revenue
credit
normal balance of unearned revenue
credit
increase to prepaid rent
debit
normal balance of advertising expense
debit
normal balance of office supplies
debit
normal balance of utilities expense
debit
decrease to accounts payable
dr
decrease to unearned revenue
dr
increase to accounts receivable
dr
increase to interest expense
dr
increase to notes receivable
dr
not an external user of a business's financial information
employee
The owners' claims to the assets of the business are called ________.
equity
For Retained Earnings, the category of account and its normal balance is ________.
equity and a credit balance
For revenues, the category of account and its normal balance is ________.
equity and a credit balance
For expenses, the category of account and its normal balance is ________.
equity and a debit balance
common stock
equity, increase with credit
interest revenue
equity, increase with credit
service revenue
equity, increase with credit
advertising expnse
equity, increase with debit
dividens
equity, increase with debit
utilities expense
equity, increase with debit
Dividends is a(n) ________ account that has a normal ________ balance.
equity; debit
A liability account is increased by a debit.
false
All asset accounts and equity accounts increase with a debit.
false
The Common Stock account is increased by a debit.
false
The accounting analysis system is used to record the dual effects of each transaction.
false
financial accouting
field of accounting that focuses on providing information for external decision makers
managerial accounting
field of accounting that focuses on providing information for internal decision makers
accounting
information system that measures business activities, processes that information into reports, and communicates the results to decision makes
Which one of the following account groups normally has a credit balance?
liabilities and revenues
Which one of the following account groups will decrease with a debit?
liabilities and revenues
The Salaries Payable account is a(n) ________.
liability account with a normal credit balance
accounts payable
liability, increase with credit
unearned revenue
liability, increase with credit
Which of the following accounts decreases with a debit?
notes payable
creditor
person or business to whom a business owes money
Which of the following accounts increases with a debit?
prepaid rent
FASB
private organization that oversees the creation and governance of accounting standards in the US
certified public accounting
professional accountants who serve the general public
Certified management accountants
professionals who work for a single company
Accounts Payable is increased with a credit
true
An account that normally has a debit balance may occasionally have a credit balance.
true
An asset account is increased by a debit.
true
Expenses decrease equity, so an expense account's normal balance is a debit balance.
true
The Dividends account is increased by a debit.
true
The balances in the liability and revenue accounts are increased with a credit.
true
The normal balance of an account is the increase side of the account.
true
The system of accounting in which every transaction affects at least two accounts is called the double-entry system.
true
The T-account is a summary device that is shaped like a capital T with debits posted on the left side of the vertical line and credits posted on the right side of the vertical line.
true
SEC
us governmental agency that oversees the US financial market
Accounts Receivable is a(n) ________ account and has a normal ________ balance.
asset; debit
Prepaid Rent is a(n) ________ account and has a normal ________ balance.
asset; debit
Accounts Payable is a(n) ________ account and has a normal ________ balance.
liability; credit
