PR Ch2

A chronological record of all economic events affecting a firm are recorded in a(n)

journal

Which of the following are stockholder equity accounts? Common stock Notes payable Inventory Accounts receivable Retained earnings

Common stock Retained earnings

True or false: A balance sheet is a list of all accounts and their balances showing that debits equals credits.

False

Which of the following contains a list of transactions affecting each account and the account's balance?

General ledger

A transaction is initially recorded in the journal, and then subsequently posted to the general __________

Ledger

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

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

Which of the following is an external transaction? Using supplies on hand Purchasing supplies from a vendor Earning revenues after cash is received

Purchasing supplies from a vendor

Identify the three components of retained earnings. Revenues Assets Dividends Expenses

Revenues Dividends Expenses

A(n) ______ is maintained for each financial statement item, whereas a(n) ______ contains all of the accounts of the company.

account; general ledger

The type of information included in an account includes: columns for debits and credits. a posting reference. a daily total. the account title.

columns for debits and credits. the account title.

Select all that apply The two roles of financial accounting are to: report cost accounting information for internal decisions. communicate information to external parties for decision- making purposes. measure and report results to taxing authorities. measure business activities of the company.

communicate information to external parties for decision making purposes. measure business activities of the company.

Credits increase revenues, whereas debits increase

expenses and dividends.

Ursula Company's bookkeeper records revenue relating to a customer transaction. This indicates that the company

provided goods or services to a customer.

Consistent with the _____________________ recognition principle, companies record revenue at the time goods are provided to customers. (Enter only one word.)

revenue