Question 1

revenues

Accepted Answer

increase equity and are the assets or monies earned from a company\'s earnings activities

Question 2

investments

Accepted Answer

increase equity and are assets an owner puts into the business

Question 3

Dividends

Accepted Answer

Decrease equity and payments from the company to the owners

Question 4

Expenses

Accepted Answer

Decrease equity and are the cost of assets or services used to earn revenue

Question 5

investments

Accepted Answer

Owners Investments cause an INCREASE in equity and are entered directly in the COMMON STOCK account

Question 6

assets

Accepted Answer

An amount Owned, Resources with future benefits, Controlled by the business

Question 7

smiths company purchased $100 of supplies and paid immediately. show how to record this transaction in the accounting equation

Accepted Answer

Decrease Cash; increase supplies

Question 8

a customer of landen consulting company makes a $400 payment of cash on a bill for services provided last month. Record this transaction into the accounting equation of landen consulting by

Accepted Answer

Increasing Cash, $400  decreasing accounts receivable, $400

Question 9

four major types of transactions that affect equity in a business are

Accepted Answer

expenses, revenues, dividends, and common stock

Question 10

given the lists of accounts below, identfiy which list contains only acoounts that would appear on a balance sheet

Accepted Answer

retained earnings, equipment, accounts payable

Question 11

liability

Accepted Answer

A liability is an amount owed to a creditor

Question 12

jackson programming company paid its june rent of $500. demonstrate how to use the accounting equation to record the transaction by completing the following sentence.

Accepted Answer

Jackson company would decrease CASH and increase EXPENSES in the accounting equation.

Question 13

operating activities

Accepted Answer

These activities are the every day activities that occur in running a business, selling a product or providing a service

Question 14

Investing activities

Accepted Answer

These activities are the acquiring and disposing of assets that an organization uses in its business

Question 15

financing activities

Accepted Answer

These activities provide the monies needed to pay for resources such as land and buildings

Question 16

revenues

Accepted Answer

cause equity to increase

Question 17

how do expenses affect equity

Accepted Answer

if expenses increase, then total equity decreases  higher expenses cause lower total equity

Question 18

the accounts payable account is a

Accepted Answer

liability account

Question 19

when a business provides a service to a customer *on credit* it means that

Accepted Answer

Accounts Receivable will be increased   an asset has been created or increased  the business will receive payment for its services at a later time

Question 20

Dividends (Payments to the owner)

Accepted Answer

cause a DECREASE in equity and are entered directly in the DIVIDENDS account

Question 21

how accounting equation applies to businesses

Accepted Answer

The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners.  The relation of assets, liabilities and equity is reflected in the equation  The equation states that Assets=Liabilities + Equity  The equation applies to all monetary business transactions and events

Question 22

ABC Co. performs $200 of services for a customer, but does not get paid right away. Demonstrate how ABC Co. would record this transaction in the accounting equation by completling the following sentence

Accepted Answer

ABC Co. would increase the accounts RECEIVABLE account and increase the REVENUE account in the accounting equation.

Question 23

Dividends of $60 cash are paid to the corporation\'s shareholders.

Accepted Answer

you would record this transaction in the accounting equation by decreasing the CASH account and INCREASING the dividends account

Question 24

example of assets

Accepted Answer

Supplies  Cash  Land  Building  Accounts Receivable

Question 25

Private accounting

Accepted Answer

This area of accounting is where employees work for businesses

Question 26

Public accounting

Accepted Answer

This area of accounting includes offering tax advice services and auditing services

Question 27

Both public and private accounting

Accepted Answer

Accounting specialists in this area of area of accounting are highly regarded

Question 28

a customer makes a partial payment of $100 on a service for which you have already billed him, you would record this transaction into the accounting equation by

Accepted Answer

increasing Cash and decreasing Accounts Receivable

Question 29

on 6/25, supplies costing $1000 were purchased, but only $400 of this amount was paid on 6/25. the remainder of the bill went on account. to record this transaction on 6/25:

Accepted Answer

Supplies would be increased by $1000; Cash would decreased by $400 and Accounts Payable would be increased by $600  *supplies costing $1000 were purchased  only $400 was paid out in cash  account payable increased by $600 ($1000-400).*

Question 30

Last month, Hair Salon company purchased $900 of supplies on account. Today, Hair Salon wants to make a payment of $200 on this bill. Record this transactions into the accounting equation of Hair Salon Company by

Accepted Answer

decreasing cash, $200  decreasing Accounts Payable, $200

Question 31

Jackson\'s Catering provided $3000 worth of cookies to the local college. The college paid immediately. Record this transaction for Jackson\'s Catering in the accounting equation by:

Accepted Answer

Increasing Cash; increasing revenues

Question 32

using the accounting equation

Accepted Answer

recording the purchase of equipment for cash would include an increase to the EQUIPMENT account and a decrease to the CASH account

Question 33

meaning of the cost principle

Accepted Answer

Cost is measured on a cash or equal-to-cash basis  Accounting information is based on actual cost  Cost of services received is measured as the amount of cash paid

Question 34

when recording transactions into the accounting equation

Accepted Answer

At least two accounts will be affected when recording a transaction  After recording the transaction, total assets will always equal total liabilities plus equity   The accounting equation must always remain in balance

Question 35

why accounting information is useful

Accepted Answer

it records, summarizes and reports business transactions  it is essential to help make business decisions  it is helpful in comparing the performance of one company against a competitor

Question 36

net income formula

Accepted Answer

revenues-expenses=net income

Question 37

Importance of accounting

Accepted Answer

Accounting information helps users make business and financial decisions  Accounting is a system that identifies, records and communicates financial information

Question 38

equity

Accepted Answer

the equity of a corporation consists of retained earnings and contributed capital

Question 39

revenue recognition principle

Accepted Answer

The principle guides a business as to when it should recognize revenue  Revenue should be recorded when it is earned  The earnings process is complete when the services are performed or product is sold

Question 40

why does a business need accounting information

Accepted Answer

Accounting records business transactions and communicates financial information.

Question 41

smith company purchased $8000 of supplies on account. Show how to record this transaction to the T-accounts by selecting the correct answer below

Accepted Answer

Enter $8000 on left side of the Supplies account; enter $8000 on the right side of the Accounts Payable account

Question 42

Dividends account

Accepted Answer

Dividends decrease equity  Dividends is used to record distributions of assets to the stockholders of a business  Dividends is increased on the left side of the T-account

Question 43

Brown company paid $40 to its stockholders. Show how to record the transaction to the T-accounts by completing the following sentence.

Accepted Answer

Dividends would be DEBITED on the left side of the T-account, and Cash would be CREDITED on the right side of the T-account

Question 44

Assets

Accepted Answer

things of value owned by a business

Question 45

expenses

Accepted Answer

the costs of doing business

Question 46

liabilities

Accepted Answer

claims against the assets of a business

Question 47

creditors

Accepted Answer

individuals or organizations that have rights to receive payments from a business

Question 48

you are entering a transaction in the journal. place the following steps in the order that they would be entered in the journal

Accepted Answer

1) enter date of transaction in date column  2)Enter name of accounts debited and their amounts  3)Enter name of accounts credited and their amounts  4)Enter explanation

Question 49

The cost of land owned by a business is recorded in the land account and this account is classified as an expenses

Accepted Answer

False

Question 50

Holt computer services purchased $2000 of new equipment and paid immediately. Illustrate how to record the transaction into T-accounts by completing the following sentence

Accepted Answer

The equipment account would be DEBITED on the LEFT side of the T-account and the cash account would be CREDITED on RIGHT side of the T-account.

Question 51

Equity

Accepted Answer

The residential interest in the assets of a business after deducting the business\'a debts

Question 52

has normal debit balance

Accepted Answer

Cash, Supplies, Accounts receivable, Buildings

Question 53

Stan Programming Services provided $8000 of services and received payment immediately. Show how to record this transaction to the T-accounts by selecting the correct answer below

Accepted Answer

Enter $8000 on left side of the cash account; enter $8000 on the right side of the Service revenue account

Question 54

a trail balance

Accepted Answer

is a LIST of accounts and their balances at a point in time and is used to confirm that the sum of debit account balances equals the sum of CREDIT account balances.

Question 55

when preparing a trail balance

Accepted Answer

!) List each account title and its amount from the general ledger  2) Compute the total of debit balances and the total of credit balances  3)Verify that total debit balances equal total credit balances  4)Locate & resolve

Question 56

R Programming pays $900 supply bill that it had received earlier in the month. Illustrate how to record the transaction to the T-accounts by completing the following sentence.

Accepted Answer

Accounts Payable would be DEBITED on the LEFT side of the T-account, and cash would be CREDITED on the right side of the T-account.   *When the bill is paid, the Accounts payable account will be debited to reduce it. Accounts payable is increased with a credit(right side) and decreased with a debit (left side). Cash is reduced with a credit. Cash is reduced with a credit, which is entered on the right side of the account*

Question 57

Normal debit balance

Accepted Answer

Expenses, Dividends, Cash

Question 58

included on income statment

Accepted Answer

total revenues  total expenses  net income

Question 59

Butter Company purchased $300 of supplies for cash. Illustrate how to record the transaction into T-accounts by completing the following sentence.

Accepted Answer

The supplies account would be DEBITED on LEFT side of the T-accounts and the cash account would be CREDITED on the RIGHT side of the T-account.

Question 60

T-account has three sides

Accepted Answer

the top is called the Title  the left side is called the DEBIT side  the right side is called the CREDIT side

Question 61

The business earns $2800 cash for services performed. How would this receipt affect the total equity of a business

Accepted Answer

Revenues would be increased, so equity is increased.

Question 62

accounts that impact equity

Accepted Answer

Expenses  Common Stock  Revenue  Dividends

Question 63

a journal

Accepted Answer

it is a book of original entry that includes a chronological record of all transactions that have occurred within a business during a period occurred

Question 64

trail balance

Accepted Answer

it is a list of each account and its balance at any given time and is used to verify that debits=credits

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