chap 2 quiz
Accounts that require a credit to increase the account
Revenue, common stock
steps for measuring transactions:
1) use a source document to identify accounts affected; 2) analyze the impact of the transaction on the accounting equation; 3) assess whether the transaction results in a debit or credit to account balances; 4) record the transaction in a journal; 5) post the transaction to the general ledger
a separate ____ is used to post transactions and provides a summary of the effects of all transactions for a particular item
account
The full set of accounting procedures used to measure and communicate business transactions is referred to as the
accounting cycle
If a transaction decreases cash by $100, the balance sheet will balance if what occurs
another asset is increased, a liability is decreased
The cost of equipment is typically recorded as a(n) ____, while the cost of repairs is typically recorded as a(n) ____.
asset; expense
accounts receivable are
assets in the balance sheet
What is the correct order of the items found on the balance sheet?
assets, liabilities, stockholders' equity
the accounting equation is:
assets= liabilities + stockholders' equity
Shriver Corp. borrows $25,000 from a bank and signs a two-year promissory note. What accounts will be affected by this transaction and what is the effect?
cash increases, notes payable increases
A list of all account names used to record transactions of a company is referred to as the
chart of accounts
which are stockholder equity accounts?
common stock, retained earnings
expense
cost of conducting business during the period
A proper journal entry should have which account title and amount indented?
credit
In a double entry accounting system, the right side of the account is represented by a(n)
credit
Roland Corporation borrows $10,000 from the bank by signing a promissory note. Recording this transaction will include a:
credit to notes payable, debit to cash
A proper journal entry includes the ____, the account and amount debited, the account and amount credited, and a brief explanation of the transaction
date
In a double-entry accounting system, a(n) ____ represents the left side of the account.
debit
To increase an expense account, you should ____ the expense account
debit
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
The sum of accounts with ____ balances must equal the sum of the accounts with ____ balances
debit; credit
For every journal entry, total ____ must be equal to total credits.
debits
A t-account has space at the top for the account title and two slides for recording ____ and ____ to the account.
debits/credits; increases/decreases
When a company pays salary expense, the balance sheet effects are to
decrease stockholders' equity, decrease assets
the first step for analyzing the effect of transactions is:
determine one account in the accounting equation that will increase or decrease
dividend
distribution of cash to stockholders
A(n) represents a payment of cash to the stockholders of a company
dividend
Crane purchases equipment by signing a note payable with the equipment dealer for $10,000. The accounts affected for Crane are
equipment and notes payable
A(n) ____ transaction involves an exchange between the company and a separate economic entity
external
accounting transactions are classified as:
external or internal transactions
paying salaries to employees, purchasing inventory from suppliers, borrowing money from the bank
external transactions
A(n) ____ ____ is a collection of accounts used to keep track of increases and decreases in financial position elements
general ledger
revenues cause retained earnings to
increase
A(n) ___ transaction is an event that affects the financial position of the company but does not include an exchange with a separate economic entity
internal
____ transactions typically are recognized at the end of the period.
internal
using supplies on hand
internal transaction
A chronological record of all economic events affecting a firm are recorded in a(n)
journal
A(n) ____ entry describes the format for recording a transaction.
journal
The process of transferring information from the journal to the ledger is referred to as
posting
prepaid rent is
rent paid in advance
types of accounts which affect retained earnings
revenues, dividends, expenses
An account that is used informally for analysis instead of drawing a formal general ledger account is referred to as a(n)
t-account
The type of information included in an account includes
the account number, the account title, columns for increases and decreases
Claire purchases equipment for $10,000 by paying $3,000 in cash and borrowing $7,000 from the bank. The number of accounts affected by this transaction is
three
A list of all accounts and their balances at a particular date showing that debits equal credits is referred to as a(n)
trial balance
