Chapter 2 quiz – Flashcards
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Statements that are true:
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-Assets are increased by debits -Liabilities are decreased by debits -Revenues are increased by credits
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Trial balance
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Trial balance can verify the equality of debits and credits, lists all the accounts with their current balances, and can be taken at any time.
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Which of the following transactions will increase an asset and increase a liability?
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Buying equipment on account
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Receiving cash from a customer on account will...
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have no effect on total assets
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Which of the following is not an asset account?
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None of them (salary expense, common stock, and service revenue)
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If the credit to record the purchase of supplies on account is not posted,
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liabilities will be understated.
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An investment of cash by stockholders into the business will:
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increase stockholder's equity.
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Purchasing a laptop computer on account will
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have no effect on stockholders' equity, increase total liabilities, increase total assets.
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Which of the following transactions will increase an asset and increase stockholders' equity?
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Performing a service on account for a customer.
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The journal entry to record the purchase of supplies on account:
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debits supplies and credits accounts payable.
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Purchasing computer equipment for cash will..
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have no effect on total assets, total liabilities, or stockholders' equity
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where do we first record a transaction?
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journal
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If the credit to record the payment of an account payable is not posted,
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cash will be overstated.
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A business' receipt of a $125,000 building, with a $75,000 mortgage payable, and issuance of $50,000 of common stock will...
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increase stockholders' equity by $50,000
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The journal entry to record a payment on account will...
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debit Accounts Payable and credit cash.
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The journal entry to record the receipt of land and a building and the issuance of common stock..
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debits land and building and credits common stock.
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what is the effect on total assets and stockholders' equity of paying the telephone bill as soon as it received each month?
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Decrease on total assets, Decrease on Stockholders' equity
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Performing a service on account will
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increase total assets and stockholders' equity.
