ACC chapter 2 practice – Flashcards
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An investment of cash by stockholders into the business will: A) increase stockholders' equity B) decrease total liabilities C) have no effect on total assets D) decrease total assets
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a
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Purchasing a laptop computer on account will A) have no effect on stockholders' equity B) increase total assets C) increase total liabilities D) all of the above
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d
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Performing a service on account wll A) increase total assets B) increase stockholder's equity C) increase total liabilities D) both a and b
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d
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Receiving cash from a customer on account will A) increase stockholder's equity B) decrease liabilities C) increase total assets D) have no effect on total assts
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d
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Purchasing computer equipment for cash will A) decrease both total assets and stockholder's equity B) increase both total assets and total liabilities C) have no effect on total assets, total liabilities, or stockholders equity D) decrease both total liabilities and stockholders equity
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c
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Which of the following transactions will increase an asset and increase a liability? A) payment of an account payable B) purchasing office equipment for cash C) issuing stock D) buying equipment on account
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d
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Which of the following transactions will increase an asset and increase stockholder's equity? A) collecting cash from a customer on accounts receivable B) purchasing supplies on account C) borrowing money from a bank D) performing a service on account for a customer
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d
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Where do we first record a transaction? A) trial balance B) account C) ledger D) journal
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d
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Which of the following is not an asset account? A) common stock B) service revenue C) Salary expense D) none of the above accounts is an asset
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d
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Which statement is false? A) assets are increased by debits B) liabilities are decreased by debits C) Revenues are increased by credits D) dividends are increased by credits
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d
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The journal entry to record the receipt of land and a building and the issuance of common stock A) debits land and building and credits common stock B) debits land, building, and common stock C) debits land and credits common stock D) debits common stock and credits Land and Building
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a
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The journal entry to record the purchase of supplies on account A) credits supplies and debits accounts payable B) Debits supplies and credits accounts payable C) debits supplies expense and credits supplies D) credits supplies and debits cash
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b
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If the credit to record the purchase of supplies on account is not posted: A) assets will be understated B) stockholder's equity will be understated C) expenses will be overstated D) liabilites will be understated
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d
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The journal entry to record a payment on account will A) Debit accounts payable and credit retained earnings B) debit expenses and credit cash C) debit accounts payable and credits cash D) debit cash and credit expenses
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c
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if the credit to record the payment of an account payable is not posted A) cash will be understated B) expenses will be understated C) cash will be overstated D) liabilities will be understated
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c
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Which statement is false? A) a trial balance can verify the equality of debits and credits B) a trial balance can be taken at any time C) a trial balance lists all the accounts with their current balances D) a trial balance is the same as a balance sheet
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d
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A business' receipt of a $130,000 mortgage payable and issuance of $60,000 of common stock will A) increase stockholder's equity by 130,000 B) decrease assets by 70,000 C) increase stockholders equity by 60,000 D) increase assets by 60,000
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c
