ACCT 2401 LearnSmart Ch. 2

S. Sunshine received and paid for utility bill of $50. Show how to record this transaction to the T-accounts by selecting the correct answer below.

$50 on left side of the Utility expense account; $50 on the right side of the Cash account

You are entering a transaction in the journal. Place the following steps in the order that they would be entered in the journal.

1. Enter date of transaction in date column 2. Enter name of accounts debited and their amount 3. Enter name of accounts credited and their amounts 4. Enter explanation

Illustrate how the financial statements are linked by placing them in the correct order of preparation

1. Income statement 2. Statement of owner's equity 3. Balance sheet

When preparing a trial balance, there are certain steps that need to be followed. Place the following steps in the correct order

1. List each account title and its amount from the general ledger 2. Compute the total of debit balances and the total of credit balances 3. Verify that total debit balances equal total credit balances 4. Locate and resolve errors

Recall the required information in a financial statement heading. Rearrange the following line items as they would appear in a heading.

1. Name of the business 2. Name of the financial statement 3. Period of time the financial statement covers

Which of the following statements is (are) correct regarding a T-account?

A T-account will show the debit or credit side of each transaction A T-account represents a ledger account A T-account may be used as a tool to visualize the effects of transaction

Choose the statement below that correctly explains a general journal

A journal is a complete record of each transaction in one place and includes the debit and credit of each transaction

Which of the following statements is(are) correct regarding the definition of a liability?

A liability is a debt owned by the business A liability can be settled by transferring assets or providing products or services to others A liability is a claim by creditors against the assets of a business

Which of the following statements is the best definition of an asset?

Assets are resources owned or controlled by a company and that have expected future benefits

Which of the following accounts has a normal debit balance?

Buildings; Accounts receivable; Cash; Supplies

Liabilities

Claims against the assets of a business

Which of the following statements are correct?

Crediting means to enter transactions on the right side of a T-account Crediting can be abbreviated "Cr^2" Crediting a liability account will increase it Crediting the owner, capital account means to increase it

Which of the following statements is (are) correct?

Crediting means to enter transactions on the right side of the T-account Crediting a liability account will increase it Crediting the Owner, Capital account means to increase it Crediting can be abbreviated "Cr^2"

J. Jackson invested $1,000 in his business. Show how to use T-accounts to record this transaction by selecting the correct answer below

Debit Cash; credit Owner, Capital

The owner of Paul's Programming Services withdraw $100 from the business for personal use. Show how to use T-accounts to record this transaction by selecting the correct answer below.

Debit Owner, Withdrawals; credit Cash

The owner of Paul's Programming Services withdrew $100 from the business for personal use. Show how to use T-accounts to record this transaction by selecting the correct answer below

Debit Owner, Withdrawals; credit Cash

Which of the following statement is correct?

Debiting means to enter transactions on the left side of a T-account

Which of the following statements is (are) accurate regarding equipment purchased within a business?

Equipment purchases are reported on a balance sheet Equipment is an asset Equipment cost is initially recorded as an asset and as it is used and gets worn down, the cost is gradually expensed Equipment is reported on the left side of the accounting equation

Which of the following statements is correct regarding expenses

Expenses are increased on the left side of their T-account because they decrease equity

A business pays $500 for rent. How would this payment affect the equity of a business?

Expenses are increased, so equity is decreased

Which of the following below would have a normal debit balance?

Expenses; Owner, Withdrawals; Cash

Which statement is correct regarding entering transactions into the accounting equation?

If the total right side of the accounting equation increased, then the total of the left side of the accounting equation must also increase.

Creditors

Individuals or organizations that have rights to receive payments from a business

Given the descriptions below, which are true regarding notes receivable?

It is the promise of another entity to pay a specific sum of money on a specified future date. Notes receivable is classified as an asset. Another name for notes receivable is a promissory note. Notes receivable is decreased with a credit.

There are several types of accounts that impact equity. Which of the accounts below cause equity to increase?

Owner's capital and revenues

Simon, the owner of a business, invests $10,000 in his new business, Simon's Sports. How would this affect the equity of a business?

Owner, Capital would be increased, so equity is increased

Jeff, the owner of a business, withdrew $100 from the business's checking account for personal use. How would this affect the total equity of this business?

Owner, Withdrawals would be increased and total equity would decrease as well

Lenten Company paid $1,200 for insurance coverage for the next year. Show how this transaction should be entered into T-accounts of Lenten Company, by selecting the correct answer below.

Place $1,200 on the left side of the Prepaid Insurance account; place $1,200 on the right side of the Cash account

Which of the following is correct regarding posting a transaction?

Posting means to transfer journal information to a ledger.

From the following list of accounts, choose the lists with contains only expense accounts

Rent expense, wages expense, insurance

The business earns $700 of consulting revenue. How would these earnings affect the total equity of a business?

Revenues increase, so total equity is increased

Which of the following accounts are examples of revenues?

Sales, services revenue, fees earned

Expenses

The costs of doing business

Revenues

The dollars earned because of services performed or products sold

Which of the following describes a general ledger?

The general ledger is a record containing all accounts used by a company

Which of the following statements is accurate about that Land account?

The land account is used to record the costs of land purchased by the business The Land account is an asset The Land account would be increased on the left side of its t-account

Liabilities

The obligations owed by the business to creditors

Which of the following statements is (are) correct regarding the posting process?

The posting process does not require detailed explanations in the ledger Entries must be posted to the ledger before financial statements are prepared Entries are posted as soon as possible The posting process creates a link between the ledger and the journal

Owner's equity

The residual interest in the assets of a business after deducting the business's debts

Assets

Things of value owned by a business

Assets

Things of value owned by the business

Which of the following statements is(are) correct regarding the effect of debiting or crediting accounts?

To reduce Cash, you would credit it To increase the Withdrawals account, you would debit it To reduce Accounts payable, you would debit it To increase an expense account, you would debit it To decrease an asset, you would credit it

Which of the following statements is (are) correct regarding a journal?

Transactions are generally entered in chronological order In a journal, both the debit and credit side of the transaction can be seen A journal is used to record business transactions

Which of the following statements is (are) correct regarding a journal?

Transactions are generally entered in chronological order. A journal is used to record business transactions In a journal, both the debit and credit side of the transaction can be seen

Which of the following statements are accurate regarding supplies?

Unused supplies are treated as assets Unused supplies can be recorded as Store Supplies, Office Supplies or Supplies Supplies are assets until they are used When supplies are purchased, they are added to the Supplies account

Which of the following statements best describes the purpose of the Owner,Capital account?

When an owner invests in a business, the invested amount is recorded in the Owner, Capital account

Select the statements that are true regarding debiting and crediting

a debit or credit can increase or decrease an account, depending on the account for an account where a debit in an increase, the credit is a decrease a credit will always decrease an asset account a debit can increase an expense account

Which of the following accounts would be considered an asset?

accounts receivable, building, cash, supplies

The balance sheet reports:

assets, liabilities and the ending capital balance

Prepaid accounts are _________ (assets/liabilities) that represent prepayments of future expenses and are increased with a __________ (debit/credit).

assets; debit

Enter one word for each blank. The expanded accounting equation is: ___________ = ______________ + owner's capital + _______________ - _______________- owner's withdrawals. Do not include the word "account(s)" in your answers.

assets; liabilities; revenues; expenses

Journal

book of original entry that includes a chronological record of all transaction that have occurred within a business during a period occurred

Accounts payable refer to obligations owed _________ (by/to) the business and are classifies as a(n) _____________ (asset/liability/expense) account.

by; liability

General ledger

collection of all accounts with their activity and balances that exist in a business

The general ledger can be used to determine which of the following:

common and unique accounts used by a business increases and decreases in all accounts in a business which accounts are being used by a company and their balances at any given time

The T-account for Accounts payable had 4 transactions entered in into it. It was increased by $300 and by $100 and decreased by $50 and by $150, respectively. Its balance at the end of the period would be a (debit/credit) ____________ balance of $_________________.

credit; 200

Holt Computer Services received $200 from a customer that it had billed earlier in the month. Illustrate how to record the transaction to the T-accounts by completing the following sentences. Accounts receivable would be ________(debited/credited) on the _____________(left/right) side of the T-account, and Cash would be ___________(debited/credited) on the __________(left/right) side of the T-account.

credited; right; debited; left

J. Brown provided services to a customer and immediately collected $1,900 cash. Show how to record the transactions to the T-accounts by completing the following sentence. Service Revenue would be _____________ (debited/credited) on the ___________________ (left/right) side of the T-account, and Cash would be ______________ (debited/credited) on the ___________ (left/right) side of the T-account.

credited; right; debited; left

J. Brown purchased $900 of supplies on credit/ Illustrate how to record the transaction to T-accounts by completing the following sentence. Accounts payable would be _______________ (debited/credited) on the ___________ (left/right) side of the T-account, and Supplies would be __________ (debited/credited) on the _____________ (left/right) side of the T-account.

credited; right; debited; left

On Jan 2, Callie Taylor received a $700 payment from a customer previously billed for services performed. The journal entry to record this transaction would include a ________ (debit/credit) to the______________ account and a ___________(debit/credit) ti the Accounts Receivable account.

debit; cash; credit

The account title is shown at the top of a T-account. The left side of a T-account is called the ___________ side, and the right side is called the ______________ side.

debit; credit

On Jan. 2, Taylor company performed $800 worth of services for a client. The Client paid $100 immediately, but promised to pay the balance next month. The journal entry to record this transaction would include a __________ to the Cash account; a __________to the Accounts receivable account and a ____________ to the Service revenue account.

debit; debit; credit

Which of the following is required information when entering a transaction into a journal?

debited accounts date of the transaction credited accounts explanation of transaction

Holt Computer Services purchased $2,000 of new equipment and paid immediately. Illustrate how to record the transaction into T-accounts of Holt Services by completing the following sentence. The Equipment account would be __________ (debited/credited) on the ______________ (left/right) side of the T-account and the Cash account would be ____________ (debited/credited) on the ________________ (left/right) side of the T-account.

debited; left; credited; right

Major Programming receives $5,000 cash in advance of providing programming services to a customer. Describe how to record the transaction to the T-accounts by completing the following sentence. ash would be _____________ (debited/credited) on the ______________ (left/right) side of the T-account, and Unearned Programming Revenue would be ______________ (debited/credited) on the ______________ (left/right) side of the T-account.

debited; left; credited; right

P. BUtter purchased $300 of supplies fro cash. Illustrate how to record the transaction into T-accounts by completing the following sentence. The Supplies would be ____________ (debited/credited) on the _____________ (left/right) side of the T-account and the Cash account would be ________ (debited/credited) on the ___________ (left/right) side of the T-account.

debited; left; credited; right

R&R Programming pays a $900 supply bill that it had received earlier in the month. Illustrate how to record the transaction to the T-accounts by completing the following sentence. Accounts payable would be ____________ (debited/credited) on the ______________(left/right) side of the T-account, and Cash would be __________(debited/credited) on the (left/right) side of the T-account.

debited; left; credited; right

An account is a record of increases and ___________ in a specific asset, liability, equity, revenue or expense item.

decreases

The statement of owner's equity reports:

how equity changed over a period of time

Revenues can cause equity to _____________(decrease/increase) and they are increased on the _________(left/right) side of the T-account.

increase; right

Accounts receivable __________ (increased/decreased) by credit sales and are ____________ (increased/decreased) by customer payments

increased; decreased

Chart of accounts

list of all ledger accounts which exist in a business and includes an identification number assigned to each account

Trial balance

list of each account and its balance at any given time and is used to verify that debits = credits

A trial balance is a(n) (list/balance/chart) ____________ of accounts and their balances at a point in time and is used to confirm that the sum of debit account balances equals the sum of _______________ account balances.

list; credit

Which of the following items would be considered "cash" and reflected in a company's Cash account?

money orders, checks, coin

An income statement reports:

the revenues less the expenses incurred by a business

The Owner, Withdrawal account is used to record_________(investments/withdrawals/expenses/revenues) by the owner and has a __________(positive/negative) impact on equity.

withdrawals; negative