Financial Accounting Chapter 2
All transactions related to a particular item over a period of time are summarized in a(n):
Account
A debit is used to decrease which of the following accounts?
Accounts Payable
Which of the following is not a step in the process of measuring external transactions?
Analyze the impact of the transaction on the accounting equation. Record the transaction using debits and credits. Post the transaction to the T-account in the general ledger. correct: All of the steps listed are steps in the measurement process of external transactions.
A list of all account names used to record transactions of a company is referred to as a:
Chart of account
Providing services to customers for cash would be recorded with a:
Credit to Service Revenue.
The payment for utilities of the current month would be recorded as
Debit Utilities Expense; Credit Cash.
Paying dividends to stockholders would be recorded with a:
Debit to Dividends.
The purchase of supplies on account would be recorded with a:
Debit to Supplies.
Which of the following is possible for a particular business transaction?
Decrease assets; decrease liabilities
A debit to Salaries Expense will:
Decrease stockholders' equity
Which of the following does not represent an external business transaction?
Expiration of an insurance policy over time
After transactions are recorded in the journal, they are posted to the:
General ledger
If a company has an increase in total revenues of $10,000, which of the following is possible? I. Total assets increase by $10,000. II. Total liabilities increase by $10,000. 111. Total stockholders' equity decreases by $10,000.
I only
Which of the following causes the accounting equation not to balance?
Increase assets; increase dividends.
Providing services to customers for cash would have what effect on the accounting equation?
Increase total assets and total stockholders' equity.
Which of the following transactions causes an increase in total assets?
Issue common stock in exchange for cash.
In the language of accounting, the term "debit" always means
Left-hand side.
Purchasing land with cash would have what effect on the accounting equation?
No effect
Which of the following transactions decreases total assets?
Pay dividends to stockholders
Which of the following transactions decreases stockholders' equity?
Pay salaries for the current period
Which of the following transactions causes a decrease in stockholders' equity?
Paying advertising expense for the current month.
Which of the following represents an external transaction?
Payment of utility bill
Account balances in the general ledger are updated for transactions through the process of:
Posting
The process of transferring debit and credit information from the general journal to the general ledger is known as:
Posting
Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits?
Prepare a trial balance
Which of the following transactions increases total assets?
Provide services to customers on account
Which of the following transactions causes an increase in stockholders' equity?
Provide services to customers on account.
Which of the following transactions increases total liabilities?
Purchase office supplies on account
Which of the following transactions causes a decrease in total liabilities?
Repay amounts previously borrowed from the bank.
A credit is used to increase which of the following accounts?
Service Revenue.
Which of the following accounts normally has a credit balance?
Service Revenue.
Which of the following shows a chronological record of all transactions?
The general journal
A trial balance can best be explained as a list of
The income statement accounts used to calculate net income. Revenue, expense, and dividend accounts used to show the balances of the components of retained earnings. The balance sheet accounts used to show the equality of the accounting equation. correct: All accounts and their balances at a particular date.
If a company has an increase in total expenses of $10,000, which of the following is possible?
Total assets decrease by $10,000.
Which of the following is true about a trial balance?
Total debit amounts should always equal total credit amounts.
Posting is the process of
Transferring the debit and credit information from the journal to individual accounts in the general ledger.
Which of the following correctly describes a list of accounts and their balances, showing that total debits equal total credits?
Trial balance
A debit is used to increase which of the following accounts?
Utilities Expense.
A credit to Cash will:
decrease in assets
A credit is used to decrease which of the following accounts?
Cash
The purchase of supplies with cash would be recorded as
Debit Supplies; Credit Cash.
Which of the following accounts normally has a debit balance?
Supplies
Transactions are recorded using debits and credits in a(n):
Journal