Financial Accounting Chapter 2
A debit is not the normal balance for which of the following? Asset account Dividends account Expense account Common stock account
Common Stock Account
An accountant has debited an asset account for $1,200 and credited a liability account for $500. What can be done to complete the recording of the transaction?
Credit a different asset account for $700.
An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?
Debit a Stockholders' account for $800.
Devendra Company pays cash dividends of $600. The entry for this transaction will include a debit of $600 to
Dividends
A credit is not the normal balance for which account listed below?
Dividends account
A debit is not the normal balance for which account listed below? Dividends Cash Accounts Receivable Service Revenue
Service Revenue
A journal provides
a chronological record of transactions
A trial balance will not balance if
a journal entry is only partially posted
An account consists of
a title, a debit side, and a credit side.
A trial balance may balance even when each of the following occurs except when
a transposition error is made.
A T-account is
a way of depicting the basic form of an account.
Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)
advertising brochure.
For the basic accounting equation to stay in balance, each transaction recorded must
affect two or more accounts.
An accounting convention is best described as
an accounting custom
A debit to an asset account indicates
an increase in the asset
A chart of accounts usually starts with
asset accounts
Delta72 Company received a cash advance of $700 from a customer. As a result of this event,
assets increased by $700.
An account is an individual accounting record of increases and decreases in specific
assets, liabilities, and stockholders' equity items.
Another name for journal is
book of original entry
An account will have a credit balance if the
credits exceed the debits.
Assets normally show
debit balances.
A three column form of account is so named because it has columns for
debit, credit, and balance.
A trial balance is a listing of
general ledger accounts and balances.
An accounting record of the balances of all assets, liabilities, and stockholders' equity accounts is called a
general ledger.
A credit to a liability account
indicates an increase in the amount owed to creditors.
If a company has overdrawn its bank balance, then
its cash account will show a credit balance.
After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to
ledger accounts.
After transaction information has been recorded in the journal, it is transferred to the
ledger.
A chart of accounts for a business firm
lists the accounts and account numbers that identify their location in the ledger.
After journal entries are posted, the reference column
of the general ledger will show journal page numbers.
A journal is not useful for
preparing financial statements
A number in the reference column in a general journal indicates
that the entry has been posted to a particular account.
If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates
the mathematical equality of the accounting equation.
A complete journal entry does not show
the new balance in the accounts affected by the transaction.
An account consists of
three parts
A list of accounts and their balances at a given time is called a(n)
trial balance
A numbering system for a chart of accounts
usually starts with balance sheet accounts.
At January 1, 2015, Alligator Industries reported retained earnings of $150,000. During 2015, Alligator had a net loss of $30,000 and paid dividends of $15,000. At December 31, 2015, the amount of retained earnings is
$105,000.
At October 1, 2015, Padilla Industries had an accounts payable balance of $40,000. During the month, the company made purchases on account of $33,000 and made payments on account of $48,000. At October 31, 2015, the accounts payable balance is
$25,000.
Electrelane Company showed the following balances at the end of its first year: Cash $ 4,000 Prepaid insurance 7,000 Accounts receivable 5,000 Accounts payable 4,000 Notes payable 6,000 Common stock 2,000 Dividends 1,000 Revenues 32,000 Expenses 25,000 What did Electrelene Company show as total credits on its trial balance?
$44,000
During 2015, its first year of operations, Neko's Bakery had revenues of $60,000 and expenses of $35,000. The business paid dividends of $20,000. What is the amount of stockholders' equity at December 31, 2015?
$5,000 credit
At January 31, 2015, the balance in Aislers Inc.'s supplies account was $750. During February, Aislers purchased supplies of $900 and used supplies of $1,125. At the end of February, the balance in the supplies account should be
$525 debit.
At December 1, 2015, Cursive Company's accounts receivable balance was $1,800. During December, Cursive had credit revenues of $7,200 and collected accounts receivable of $6,000. At December 31, 2015, the accounts receivable balance is
$600 credit
A compound journal entry involves
3 or more accounts
An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?
A credit balance in an expense account
A trial balance would only help in detecting which one of the following errors?
A transposition error when transferring the debit side of journal entry to the ledger
An account is a part of the financial information system and is described by all except which one of the following? An account has a debit and credit side. An account is a source document. An account may be part of a manual or a computerized accounting system. An account has a title.
An account is a source document.
