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stockholders equity is increased by

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revenues

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the purchase of an asset for cash

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leaves total assets unchanged

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the payment of a liability

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decreases assets & liabilities

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a revenue generally

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increases assets & stockholders equity

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a paid dividend

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decreases assets & stockholders equity

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an expense

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decreases stockholders equity

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are advanced receipts from customers treated as revenue at the time of receipt? why or why not?

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no, revenue cannot be recognized until the work is performed

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is the purchase of equipment treated as an expense at the time of purchase? why or why not?

answer

no, the cost needs to be allocated to the years of expected use

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the left side of an account is

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the debit side

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the right side of an account

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is the credit side

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an account consists of

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a title, a debit side, and a credit side

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a debit to an asset account indicates

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increase in the asset

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debits

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increase assets and decrease liability

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the normal balance of any account is the

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side which increases that amount

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

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in at least two different accounts

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which of the following describes the classification and normal balance of the retained earnings account

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stockholders equity, credit

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a revenue account

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is increased by credits

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which accounts normally have credit balances

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revenues, liabilities, and retained earnings

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a company that receives money in advance of performing a service

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debits cash and credits unearned fees

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assets normally show

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debit balances

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if a company has overdrawn its bank balances, then

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its cash account will show a credit balance

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a revenue account

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is increased with a credit

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a credit to a liability account

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indicates an increase in the amount owed to its creditors

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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 $400. The cash account has a

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$500 debit increase

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Denton Company showed the following balances at the end of it's first year: Cash $7,000 Prepaid insurance 700 Accounts receivable 3,500 Accounts payable 2,800 Notes payable 4,200 Common stock 1,400 Dividends 700 Revenues 21,000 Expenses 17,500 What did Denton Company show as total credits on its trial balance?

answer

$29,400

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During January 2007, its first month of operation, Dilter Enterprises earned net income of $1,900 and paid dividends to the owners of $500. At January 31, the balance in retained earnings will be

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$1,400 credit

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During January 2007, Handy Services Inc. paid a cash dividends of $2,000. This transaction

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reduces stockholders' equity by $2,000

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At December 1, 2007, Marco Company's accounts receivable balance was $1,200. During December, Marco had credit sales of $5,000 and collected accounts receivable of $4,000. At December 31, 2007, the accounts receivable balance is

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$2,200 debit

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At October 1, 2007, Deet Industries had an accounts payable balance of $30,000. During the month, the company made purchases on account of $25,000 and made payments on account of $40,000. At October 31, 2007, the accounts payable balance is

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$15,000 credit

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

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source documents

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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

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ledger accounts

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The first step in the recording process is to

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analyze the transaction in terms of its effect on the accounts

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a journal provides

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a chronological record of transactions

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Transactions in a journal are initially recorded in

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chronological order

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The name given to entering transaction data in the journal is

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journalizing

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Which of the following journal entries is recorded correctly and in the basic format?

answer

Cash 1,500 Wages Expense 550 Advertising Expense 950

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When a company has performed a service but has not yet received payment, it

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debits accounts receivable and credits revenue from services

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A company that receives money in advance of performing a service

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debits cash and credits unearned fees

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When a company receives a utility bill but will not pay it right away, it should

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debit utilities expense and credit accounts payable

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An accounting record that includes a list of accounts and their balances at a given time is called a

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trial balance

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The unearned revenue account is classified as a(n)

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liability

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Which of the following is an asset?

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Prepaid rent

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A person who wants to determine the balance of a particular account should refer to the

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ledger

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The usual ordering of accounts in the general ledger is

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assets, liabilities, stockholders' equity, revenues, and expenses

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

answer

Accounts Receivable

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

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posting

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A chart of accounts for a business firm

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lists the accounts in the ledger

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The principle purpose of posting is to

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accumulate the effects of journalized transactions in the individual accounts

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A trial balance is a listing of

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general ledger accounts and balances

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Customarily, a trial balance is prepared

answer

at the end of an accounting period

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