ACCT 2301 Ch 2

Which of the following statements is true of a trial​ balance? A trial balance is also known as a balance sheet. A trial balance is the first step in the accounting cycle. A trial balance is also known as the chart of accounts. A trial balance is a list of all accounts with their balances.

A trial balance is a list of all accounts with their balances.

Which of the following is an asset​ account? Unearned Revenue Wages Payable Notes Payable Accounts Receivable

Accounts Receivable

Which of the following is a financial statement that presents a​ business's accounting​ equation? Balance Sheet Chart of Accounts Trial Balance Income Statement

Balance Sheet

Ranger Pool Company received cash of​ $40,000 and issued common stock. Which of the following accounts will be​ credited? Common Stock Cash Accounts Receivable Accounts Payable

Common Stock

​________ represents a debt owed for renting a building.

Rent Payable

Which of the following is a source document that provides the evidence and data for accounting​ transactions? Ledger Trial balance Journal Sales invoice

Sales invoice

Which of the following statements regarding the accounting equation is​ incorrect? Each category of the accounting equation contains accounts. The equation is the basic tool of accounting. The equation consists of three​ categories: assets,​ liabilities, and equity. The equation can be stated as assets plus liabilities equals equity.

The equation can be stated as assets plus liabilities equals equity.

For each​ account, identify whether the changes would be recorded as a debit​ (DR) or credit​ (CR).

a. Increase to Accounts Receivable DR b. Decrease to Unearned Revenue DR c. Decrease to Cash CR d. Increase to Interest Expense DR e. Increase to Salaries Payable CR f. Decrease to Prepaid Rent CR g. Increase to Common Stock CR h. Increase to Notes Receivable DR i. Decrease to Accounts Payable DR j. Increase to Interest Revenue CR

The ability of a company to pay its debts can be evaluated by using the​ ________.

debt ratio

A shortened form of the ledger is called a​ ________.

​T-account