Accounting Chapter 2 example #63869

A new account is opened for each transaction entered into by a business firm.

The recording process becomes more efficient and informative if all transactions are recorded in one account.

When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers.

An account is often referred to as a T-account because of the way it is constructed.

A debit to an account indicates an increase in that account.

If a revenue account is credited, the revenue account is increased.

The normal balance of all accounts is a debit.

Debit and credit can be interpreted to mean increase and decrease, respectively.

The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

A credit balance in a liability account indicates that an error in recording has occurred.

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

Revenues are a subdivision of retained earnings.

Under the double-entry system, revenues must always equal expenses.

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

Business documents can provide evidence that a transaction has occurred.

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

Transactions are entered in the ledger accounts and then transferred to journals.

All business transactions must be entered first in the general ledger.

A simple journal entry requires only one debit to an account and one credit to an account.

A compound journal entry requires several debits to one account and several credits to one account.

Transactions are recorded in alphabetic order in a journal.

A journal is also known as a book of original entry.

The complete effect of a transaction on the accounts is disclosed in the journal.

The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

The chart of accounts is a special ledger used in accounting systems.

A general ledger should be arranged in the order in which accounts are presented in the financial statements, beginning with the balance sheet accounts.

The number and types of accounts used by different business enterprises are the same if generally accepted accounting principles are being followed by the enterprises.

Posting is the process of proving the equality of debits and credits in the trial balance.

After a transaction has been posted, the reference column in the journal should not be blank.

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction.

The normal balance of an expense is a credit.

The journal provides a chronological record of transactions.

The ledger is merely a bookkeeping device and therefore does not provide much useful data for management.

The chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger.

The primary purpose of a trial balance is to prove the mathematical equality of the debits and credits after posting.

The trial balance will not balance when incorrect account titles are used in journalizing or posting.

An account consists of

The left side of an account is

An account is NOT a

An account consists of

A T-account is

Credits decrease and increase what

A debit to an asset account indicates

The normal balance of any account is the

The double-entry system requires that each transaction must be recorded

What is the expanded basic accounting equation?

In recording an accounting transaction in a double-entry system

An accounting convention is best described as

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?

An account will have a credit balance if the

What is not true of the terms debit and credit?

If a company has overdrawn its bank balance, then

When a company pays dividends

A credit to a liability account

In the first month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $600. The cash account has a(n)

TransAm Mail Service purchased equipment for $2,500. TransAm paid $400 in cash and signed a note for the balance. TransAm debited the Equipment account, credited Cash and

Radio Moscow Industries purchased supplies for $1,000. They paid $400 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $600. Which of the following would be the correct way to complete the recording of the transaction?

On January 14, Edamame Industries purchased supplies of $700 on account. The entry to record the purchase will include

At January 1, 2014, Alligator Industries reported retained earnings of $130,000. During 2014, Alligator had a net loss of $30,000 and paid dividends of $15,000. At December 31, 2014, the amount of retained earnings is

Mt. Zion Inc. pays its employees twice a month, on the 7 th and the 21 st . On June 21, Mt. Zion Inc. paid employee salaries of $5,000. This transaction would

During February 2014 its first month of operations, the owner of Ariel Pink Enterprises invested cash of $25,000. Ariel had cash revenues of $5,000 and paid expenses of $7,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

At January 31, 2014, the balance in Aislers Inc.'s supplies account was $250. During February, Aislers purchased supplies of $300 and used supplies of $375. At the end of February, the balance in the supplies account should be

During 2013, its first year of operations, Neko's Bakery had revenues of $60,000 and expenses of $33,000. The business paid dividends of $20,000. What is the amount of stockholders' equity at December 31, 2014?

On July 7, 2014, Hidden Camera Enterprises performed cash services of $1,700. The entry to record this transaction would include

The final step in the recording process is to

The usual sequence of steps in the transaction recording process is:

In recording business transactions, evidence that an accounting transaction has taken place is obtained from

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

The first step in the recording process is to

The recording process occurs

A compound journal entry involves

A journal provides

When three or more accounts are required in one journal entry, the entry is referred to as a

When two accounts are required in one journal entry, the entry is referred to as a

Another name for journal is

The standard format of a journal would not include

Transactions in a journal are recorded in

A journal is not useful for

A complete journal entry does not show

When journalizing, the reference column is

On June 1, 2014 Ted Leo buys a copier machine for his business and finances this purchase with cash and a note. When journalizing this transaction, he will

The ledger should be arranged in

An accounting record of the balances of all assets, liabilities, and stockholders' equity accounts is called a

The usual order of accounts in the general ledger is

Management could determine the amounts due from customers by examining which ledger account?

Delta72 Company received a cash advance of $700 from a customer. As a result of this event,

Camper Van Company purchased equipment for $2,600 cash. As a result of this event,

The procedure of transferring journal entries to the ledger accounts is called

A number in the reference column in a general journal indicates

A chart of accounts for a business firm

Posting accumulates the effects of

The first step in designing a computerized accounting system is the creation of the

The steps in preparing a trial balance include

A trial balance is a listing of

Customarily, a trial balance is prepared

What is the correct sequence of steps in the recording process?

Deerhoof Company purchases equipment for $1,700 and supplies for $400 from Milkman Co. for $2,100 cash. The entry for this transaction will include a

Devendra Company pays cash dividends of $600. The entry for this transaction will include a debit of $600 to