chapter 2 a-304

A company paid $500 cash for a new printer. The entry to record this transaction would include a Blank______ to Cash. Multiple choice question. debitor debit credit creditare

credit

A company purchased land in exchange for a $25,000, 10-year note payable. The increase in the Notes Payable account would be recorded with a Blank______. Multiple choice question. debitor creditar debit credit

credit

A company purchased supplies and promised to pay $200 for them next month. The increase in Accounts Payable would be recorded with a Blank______. Multiple choice question. debitor debit creditare credit

credit

A company sold 1,000 shares of stock for $100,000. The increase in the Common Stock account would be recorded with a Blank______. Multiple choice question. credit debit

credit

**** The document that shows the effects of transactions chronologically, but does not provide account balances, is the general " " *****

journal

During the accounting period, transactions are analyzed and recorded in the general Blank______ first. Multiple choice question. trial balance journal ledger income statement

journal

Accounts are updated by posting the effects listed in the general " " to the respective accounts in the general " ". (Enter one word per blank.)

journal ledger

Under the going concern or " " assumption, a business normally is assumed to exist long enough to meet its contractual obligations and plans. (Enter only one word per blank.)

continuity

Financing provided by owners is referred to as Blank______. Multiple choice question. current liabilities treasury stock noncurrent liabilities contributed capital

contributed capital

A company paid $2,000 cash to an employee for this month's salary. The entry to record this transaction would include a Blank______ to Cash. Multiple choice question. creditare debit credit debitor

credit

A chart of accounts is a Blank______. Multiple choice question. summary of each account's activity and its ending balance list of each account and its balance at a point in time list of daily transactions showing the accounts debited and credited for each transaction Reason: A chart of accounts is a list of account titles and reference numbers used by the company; it does not show any activity in the accounts. A journal lists the recording of daily transactions. list of account titles with corresponding reference numbers used by companies so that transaction items are consistently named

list of account titles with corresponding reference numbers used by companies so that transaction items are consistently named Reason: A chart of accounts is a list of account titles and reference numbers used by the company; it does not show any activity in the accounts. A journal lists the recording of daily transactions.

Intangibles such as trademarks and patents are Blank______. Multiple choice question. current assets noncurrent liabilities noncurrent assets current liabilities

noncurrent assets

Liabilities appear on the " " side of the accounting equation and are increased with amounts that appear on the " " side of liability T-accounts. (Enter one word per blank.)

1. right 2. credit or right

Steps transactions would be entered into a general journal

1. transaction date 2. Name of accounts debited and their amounts 3. Name of accounts credited and their amounts 4. Enter an explanation for the entry

f a company has issued 10,000 shares of common stock and its Common Stock account has a balance of $100,000, then par value must equal Blank______. Multiple choice question. an undetermined amount $10 $10,000 $1.00

10

The beginning balance in Accounts Payable was $4,000 and $100 of supplies were purchased on account. If the ending balance in Accounts Payable is $3,400, the the amount paid for supplies purchased on account was Blank______ and is found on the Blank______ of the Accounts Payable T-account. Multiple choice question. $2,500; debit $700; debit $500; credit $500; debit $700; credit

700 debit

Which statement best describes a T account? Multiple choice question. A T account is used to record transactions in a chronological order and serves as a book of original entry. A T account represents an account and is a tool used to understand the effects of one or more transactions. A T account is a formal financial statement which reports whether debits = credits at any given time. A T account is used in a business to accurately report the financial status of its operations to the owners.

A T account represents an account and is a tool used to understand the effects of one or more transactions. Not reporting whether debits = credits Reason: It represents a ledger account.

Which of the following statements is (are) correct regarding a T-account? (Check all that apply.) Multiple select question. A T-account represents a ledger account. A T-account will show the debits and credits of the transactions affecting the account. A T-account reflects whether a transaction was posted correctly.

A T-account represents a ledger account. A T-account will show the debits and credits of the transactions affecting the account. Reason: The T-account only shows the debit or credit side of a transaction.

Which statement is false? Multiple choice question. A trial balance is the same as a balance sheet. A trial balance lists all the accounts with their current balances. A trial balance can be taken at any point in time. A trial balance can verify the equality of debits and credits.

A trial balance is the same as a balance sheet.

Which of the following items are found on a chart of accounts? (Check all that apply.) Multiple select question. Account numbers Account balances Account titles Total debits Total credits

Account numbers Account titles Reason: A chart of accounts is a menu of account titles and number. The chart of accounts does not include account balances.

On July 19, WX Company ordered $100 of supplies, promising to pay for them in August. The supplies were delivered and invoiced to WX on July 21 and WX paid $100 for them on August 10. The journal entry that WX made on August 10 would include a debit to Blank______. Multiple choice question. Accounts Payable Cash Supplies

Accounts payable Reason: On July 21, WX recorded an increase to Supplies, an asset, and an increase to Accounts Payable, a liability. On August 10, WX will decrease Cash, an asset, with a credit and decrease Accounts Payable, a liability, with a debit.

Acme Enterprises issued shares of common stock for an amount in excess of par value. The journal entry to record this transactions includes a credit to Blank______. (Select all that apply.) Multiple select question. Retained Earnings Additional Paid-in Capital Notes Payable Cash Common Stock

Add. paid in cap common stock

What type of account appears on the left side of the accounting equation and is increased with amounts on the left side of T-accounts? Stockholders' equity Asset Liability

Asset

The entry to record the issuance of $1 par value common stock to investors for $10 per share in cash results in an increase in Blank______. (Select all that apply.) Multiple select question. Assets Cash Additional Paid-in Capital Retained Earnings Liabilities Common Stock Stockholders' Equity

Assets Cash Additional Paid-in Capital Common Stock Stockholders' Equity

Burrows, Inc. borrowed $100,000 from Last Bank by signing a formal agreement to repay the bank in 10 years. Burrows' journal entry to record this transaction will include a debit to Blank______. Multiple choice question. Accounts Payable Reason: Cash is debited and Notes Payable is credited. Notes Payable Reason: Cash is debited and Notes Payable is credited. Common Stock Reason: Cash is debited and Notes Payable is credited. Equipment Reason: Cash is debited and Notes Payable is credited. Retained Earnings Reason: Cash is debited and Notes Payable is credited.

Cash

Squid Roe, Inc. purchased equipment that cost $20,000 by issuing a $15,000 promissory note and paying the remainder in cash. Identify the effects of this transaction. (Check all that apply.) Multiple select question. Cash is decreased by $20,000. Cash is decreased by $5,000. Notes payable is decreased by $15,000. Equipment is increased by $20,000. Equipment is increased by $5,000. Notes payable is increased by $15,000.

Cash is decreased by $5,000. Equipment is increased by $20,000. Notes payable is increased by $15,000.

**** A journal entry that involves debiting and crediting more than two accounts is called a " " journal entry. ***

Compound

Balance sheets report Blank______. Multiple choice question. current year balances only current and prior year balances current and past two year balances Correct Answer current and prior year balances

Correct Answer current and prior year balances

A company paid $500 for supplies that it purchased last month. The decrease in liabilities would be recorded with a Blank______ to Accounts Payable. Multiple choice question. credit debit

Correct Answer debit

The totals on a trial balance reveal whether the total equal the total . (Enter one word per blank.)

Debits Credits

______ to a corporation's stockholders' equity accounts cause its total stockholders' equity to Blank______. Multiple choice question. Credits; decrease Debits; increase Debits; decrease

Debits; decrease

Describe where dollar signs are appropriate in financial statements. Multiple choice question. Dollar signs are not used in financial statements. Dollar signs are used beside the first and last numbers in a column. Dollar signs are used beside every number in a column.

Dollar signs are used beside the first and last numbers in a column.

Which of the following accounting cycle steps describes the summarizing in ledger accounts? Multiple choice question. A list of accounts and ending balances is checked to be sure total debits equal total credits. Dollars amounts from journal entries are copied (posted) to the appropriate accounts in the ledger, so that account balances can be totaled. Transactions are recorded chronologically, showing the accounts debited along with the corresponding accounts credited.

Dollars amounts from journal entries are copied (posted) to the appropriate accounts in the ledger, so that account balances can be totaled.

Using the Accounts Payable T-account, which formula is the correct formula to solve for the amount of purchases on account? Multiple choice question. Beginning Accounts Payable + Payments + Ending Accounts Payable Ending Accounts Payable - Payments - Beginning Accounts Payable Ending Accounts Payable + Payments - Beginning Accounts Payable Beginning Accounts Payable + Payments - Ending Accounts Payable

Ending Accounts Payable + Payments - Beginning Accounts Payable

Smith Company purchased $8,000 of supplies on account. Show how to record this transaction in the T-accounts by selecting the correct answer below. Multiple choice question. Enter $8,000 on the left side of the Supplies account. Enter $8,000 on the right side of the Accounts receivable account. Enter $8,000 on left side of the Supplies account; enter $8,000 on the right side of the Accounts payable account. Enter $8,000 on the left side of the Supplies account; enter $8,000 on the right side of the Cash account. Enter $8,000 on the right side of the Supplies account. Enter $8,000 on the left side of the Accounts payable account.

Enter $8,000 on left side of the Supplies account; enter $8,000 on the right side of the Accounts payable account.

Accounting transactions are classified as which of the following? (Select all that apply.) Multiple select question. Current events Internal events External events Noncurrent events

Internal events External events

What is the the effect on the accounting equation when the company declares a dividend to be paid later? (Check all that apply.) Multiple select question. Common stock decreases Common stock increases Liabilities increase Retained earnings increase Liabilities decrease Retained earnings decrease

Liabilities increase Retained earnings decrease

Company X issued 10,000 shares of its $1 par value stock to its owners for $10,000 cash. It recorded the transaction by increasing assets and increasing liabilities. Which of the following statements arecorrect? (Check all that apply.) Multiple select question. Liabilities will be understated. Assets will be understated. Stockholders' equity will be overstated. Assets will be overstated. Liabilities will be overstated. Stockholders' equity will be understated.

Liabilities will be overstated. Stockholders' equity will be understated.

On May 1, Ace Electronics ordered office equipment. The equipment was delivered to Ace on May 15, and Ace agreed to pay for it by the end of the month. Ace paid for the equipment on May 31. When will Ace make the first entry in its accounting system for this purchase? Multiple choice question. May 15 May 31 May 1

May 15

Able Company purchased $25,000 worth of equipment for $5,000 cash and a $20,000, 5-year note payable. Which accounts would be credited in the journal entry to record this transaction? (Select all that apply.) Multiple select question. Equipment Note Payable Accounts Payable Cash

Note Payable Cash

Able Company purchased $25,000 worth of equipment for $5,000 cash and a $20,000, 5-year note payable. Which accounts would be credited in the journal entry to record this transaction? (Select all that apply.) Multiple select question. Note Payable Cash Accounts Payable Equipment

Note Payable Cash

What does the company give when it borrows from a bank? Multiple choice question. Notes Payable Common Stock Additional Paid-in Capital Retained Earnings

Notes Payable

Which of the following are external transactions? Multiple select question. Using supplies purchased last month Paying salaries to employees Borrowing money from the bank Purchasing inventory from suppliers

Paying salaries to employees Borrowing money from the bank Purchasing inventory from suppliers

Which of the following is correct regarding posting a transaction? Multiple choice question. Posting means to enter transactions into a journal. Posting means to transfer journal information to a ledger. Posting takes place once during an accounting period.

Posting means to transfer journal information to a ledger.

Identify on which side of the Accounts Payable T-account the following would appear. Select all that are correct. Multiple select question. Purchases of supplies on account would be on the credit side. Ending Accounts Payable balance on the debit side. Ending Accounts Payable balance on the credit side. Payments of supplies previously purchased on account on the debit side. Purchases of supplies on account would be on the debit side. Payments of supplies previously purchased on account on the credit side.

Purchases of supplies on account would be on the credit side. Ending Accounts Payable balance on the credit side. Payments of supplies previously purchased on account on the debit side. How is ending an accounts payable balance on the credit side

Which of the following events are transactions that should be entered in the accounting system? (Check all that apply.) Multiple select question. Receiving 3 cases of copy paper that cost $12 per case Paying $48 for 4 cases of copy paper that were delivered last month Ordering 5 cases of copy paper to be delivered and paid next month at a cost of $12 per case Hiring a new accountant who will start work next month at an annual salary of $48,000 Paying the office secretary's monthly salary of $2,000

Receiving 3 cases of copy paper that cost $12 per case Paying $48 for 4 cases of copy paper that were delivered last month Paying the office secretary's monthly salary of $2,000

When a business issues common stock, what does it give to its owners? Multiple choice question. Stock certificates Promissory note Cash Retained earnings

Stock certificates

Under the going concern or " " assumption, a business normally is assumed to exist long enough to meet its contractual obligations and plans.

continuity

On December 15, Pasta Disasta's board of directors declares a $1,000 cash dividend to shareholders to paid next month. Show the effect of this event on Pasta Disasta's accounting equation on December 15. Multiple choice question. Total stockholders' equity will increase. Total stockholders' equity will decrease. Total assets will increase. Total liabilities will decrease.

Total stockholders' equity will decrease.

Which of the following are internal events? (Select all that apply.) Multiple select question. Using supplies purchased and paid for last month Paying salaries to an employee Borrowing cash that will be repaid in five years to the bank Earning revenues after cash is received in advance from customers

Using supplies purchased and paid for last month Earning revenues after cash is received in advance from customers

Which is an internal transaction? Multiple choice question. Buying equipment Paying rent for the month Borrowing from the bank Using up insurance paid in advance

Using up insurance paid in advance

Every transaction results in Blank______. (Select all that apply.) Multiple select question. an increase in cash a balanced accounting equation an increase in one account and a decrease in another at least two accounts being affected

a balanced accounting equation at least two accounts being affected

A company records the effects of transactions for a particular item in a(n) Blank______. Multiple choice question. business diary listing special journal account Correct Answer account

account

A company records the effects of transactions for a particular item in a(n) Blank______. Multiple choice question. special journal business diary listing account

account

The purpose of an account is to Blank______. Multiple choice question. list all of the daily transactions of the company accumulate the dollar effect of transactions for each financial statement item record all the transactions of the company for a particular day classify items on the balance sheet

accumulate the dollar effect of transactions for each financial statement item

Par value of common stock is the Blank______. (Select all that apply.) Multiple select question. market price of the stock amount established by the board of directors legal amount per share excess amount received from selling stock

amount established by the board of directors legal amount per share

An amount posted on the left side of a T-account increases Blank______ and decreases Blank______. Multiple choice question. assets; liabilities liabilities; Common Stock Common Stock; assets liabilities; assets

assets; liabilities

On a balance sheet dollar signs are in front of the numbers Blank______. (Check all that apply.) Multiple select question. at the top and bottom of the liabilities and stockholders' equity section on all subtotals at the top and bottom of the asset section on every line item

at the top and bottom of the liabilities and stockholders' equity section at the top and bottom of the asset section

If a company debits Cash and credits Notes Payable, it Blank______. Multiple choice question. issued stock made a mistake repaid a loan borrowed money

borrowed money

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

chart of accounts

Balance sheets typically include Blank______. Multiple choice question. the current year balances only comparative data listing the more recent balances in a column to the right of the prior period balances comparative data listing the more recent balances in a column to the left of the prior period balances

comparative data listing the more recent balances in a column to the left of the prior period balances

The journal entry to record the paying back of amounts borrowed previously include all of the following Blank______ (ignore interest). Multiple select question. credit Notes Payable credit Cash debit Short-term Investments debit Cash debit Notes Payable debit Retained Earnings

credit Cash debit Notes Payable

Select the statements below that are correct in regards to entering transactions in a journal. (Check all that apply.) Multiple select question. Credited accounts should be indented. Total dollar amount of debits must equal the total dollar amount of credits. Credited accounts should be listed before debited accounts. Transactions that decrease an asset account include a negative sign in front of the amount under the credit column of the journal.

credit accounts should be indented total dollar amount of debits must equal the total dollar amount of credits

A company received $2,000 of equipment and promised to pay for it next month. The increase in equipment would be recorded with a Blank______ to the Equipment account. Multiple choice question. credit creditare debitor debit

debit

The payment of amounts previously borrowed will be recorded on the Blank______ side of the Notes Payable T-account. Multiple choice question. credit debit

debit

Acme Enterprises issued 10,000 shares of $0.10 par value common stock for $20,000 in cash. The journal entry to record this transaction will include a Blank______. (Select all that apply.) Multiple select question. debit to Cash of $20,000 credit to Additional Paid-in Capital of $19,000 credit to Notes Payable of $20,000 credit to Common Stock of $1,000 credit to Cash of $20,000 credit to Common Stock of $20,000

debit to Cash of $20,000 credit to Additional Paid-in Capital of $19,000 credit to Common Stock of $1,000

The journal entry to record the declaration of a dividend that is to be paid at a later date includes a Blank______. (Check all that apply.) Multiple select question. credit to Retained Earnings credit to Cash debit to Retained Earnings credit to Dividends Payable

debit to Retained Earnings credit to Dividends Payable

The journal entry to record the declaration of a dividend that is to be paid at a later date includes a Blank______. (Check all that apply.) Multiple select question. credit to Retained Earnings debit to Retained Earnings credit to Cash Reason: Dividends Payable is credited because the dividend is owed once it is declared and the cash has not yet been paid. credit to Dividends Payable

debit to Retained Earnings credit to Dividends Payable

When Diva, Inc. declared a $10,000 cash dividend, it recorded a $10,000 Blank______. (Check all that apply.) Multiple select question. debit to Dividends Payable Reason: Dividends Payable should be the credited, not debited. Retained earnings should be debited. credit to Retained Earnings Reason: Dividends Payable should be the credited, not debited. Retained Earnings should be debited. credit to Cash Reason: When a dividend is declared, the credit is to Dividends Payable, not Cash. The dividends are not paid initially. debit to Dividend Expense Reason: The debit is to Retained Earnings. Dividends are not expenses; they are distributions of profits.

debit to Retained Earnings credit to Dividends Payable

If the effect of an entry on the accounting equation increased assets and liabilities, then the company may have Blank______. Multiple choice question. debited Common Stock and Additional Paid-in Capital and credited Cash debited Notes Payable and credited Cash debited Cash and credited Common Stock and Additional Paid-in Capital debited Cash and credited Notes Payable

debited Cash and credited Notes Payable

The payment of amounts previously borrowed (ignoring interest) causes a(n) Blank______. Multiple choice question. increase in assets and stockholders' equity decrease in assets and an increase in liabilities decrease in assets and an increase in stockholders' equity decrease in assets and stockholders' equity decrease in assets and liabilities increase in assets and liabilities

decrease in assets and liabilities

An accounting system provides Blank______. (Select all that apply.) Multiple select question. financial information needed to report results to outsiders assurance that a company cannot fail financial information needed to manage a company information about a company's future plans

financial information needed to report results to outsiders financial information needed to manage a company

Transactions are recorded chronologically in the Blank______. Multiple choice question. financial statements T-accounts trial balance general journal general ledger

general journal

Debit means Blank______. Multiple choice question. decrease right increase left

left Reason: Debit simply means left. Debits cause assets to increase (which is on the left side of the accounting equation), but debits cause liabilities and stockholders' equity to decrease (which are on the right side of the accounting equation).

Assets appear on the " " side of the accounting equation and are increased by amounts that appear on the " " side of asset T-accounts. (Enter one word per blank.)

left debit

The Cash T-account is increased with an entry on the " " side of the T-account. (Enter one word per blank.)

left or debit

The Equipment account is increased with an entry on the " " side of the Equipment T-account.

left or debit

The Equipment account is increased with an entry on the " " side of the Equipment T-account. (Enter one word per blank.)

left or debit

If a company is not expected to continue in business, its assets should be valued and reported at their Blank______ values. Multiple choice question. liquidation historical maturity non-current

liquidation

If a company is not expected to continue in business, its assets should be valued and reported at their Blank______ values. Multiple choice question. non-current historical maturity liquidation

liquidation

Transactions are Blank______. (Select all that apply.) Multiple select question. external events only, not internal events exchange of promises measurable internal events such as the use of assets in operations exchanges between a business and one or more external parties to a business

measurable internal events such as the use of assets in operations exchanges between a business and one or more external parties to a business

Transferring entries from the journal to the ledger is called Blank______. Multiple choice question. journalizing balancing recording posting

posting

Identify what a company gives and receives when it invests in equipment by paying cash and signing a two-year note. (Check all that apply.) Multiple select question. It receives cash. It receives equipment. It gives equipment. It gives stock. It receives stock. It receives a promissory note. It gives cash. It gives a promissory note.

receives equipment. It gives cash. It gives a promissory note. Reason: The receipt of a promissory note increases the asset, Notes Receivable. Giving a promissory note increases the liability, Notes Payable.

Journals are used to Blank______. Multiple choice question. show the balances in individual accounts record transactions chronologically report the results of operations to stockholders let management know how much cash remains

record transactions chronologically

The Common Stock account is increased with an entry on the " " side of the T-account. (Enter one word per blank.)

right credit

A ledger is used to Blank______. Multiple choice question. make a balance sheet unnecessary show increases and decreases in individual accounts, as well as an ending balance prove that debits equal credits report the results of operations to stockholders, creditors, and managers

show increases and decreases in individual accounts, as well as an ending balance

Z Best, Inc. issued $1,000,000 of stock for cash. Z Best recorded the transaction by increasing cash and decreasing common stock and additional paid-in capital. As a result of this entry, Blank______. (Check all that apply.) Multiple select question. stockholders' equity is understated assets are understated contributed capital is understated the accounting equation is out of balance liabilities are understated

stockholders' equity is understated contributed capital is understated the accounting equation is out of balance

Position 2 of 6 Record journal entries in the general journal correct toggle button unavailable Record journal entries in the general journal Position 3 of 6 Post amounts to the general ledger correct toggle button unavailable Post amounts to the general ledger Position 4 of 6 Adjust revenues and expenses in the journal and post to the ledger correct toggle button unavailable Adjust revenues and expenses in the journal and post to the ledger Position 5 of 6 Close revenues, expenses, gains, and losses to Retained Earnings incorrect toggle button unavailable Close revenues, expenses, gains, and losses to Retained Earnings Position

study

MMM Pizza bought $1,500 of supplies on account. What is the effect of recording this transaction on the company's total assets? Multiple choice question. Nothing can be recorded until cash is paid. Total assets will decrease. Total assets will increase. There is no effect.

total assets will increase Reason: Since the supplies were purchased "on account", MMM Pizza receives supplies, an asset, in exchange for a promise to pay, a liability. Thus, assets, Supplies, and liabilities, Accounts Payable, will both increase.

The naBlank 1Blank 1 na , Incorrect Unavailable balance is an internal report used to determine whether total debits equals total credits. (Enter only one word per blank.)

trail