ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DO, Study Guides, Projects, Research of Accounting

Download ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DO and more Study Guides, Projects, Research Accounting in PDF only on Docsity! ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified i. Brown company paid its employee his weekly wages $400. Show how to record the transaction to the T-accounts by completing the following sentence. The wages expensive account would be (debited/credited) on the (left/right) side of the T- account, and the Cash account would be (debited/credited) on the (left/right) side of the T-account. ii. Which statement is correct regarding entering transactions into the accounting equation? iii. Butter Company purchased $300 of supplies for cash, illustrate how to record the transaction into T- accounts by completing the following sentence. iv. The Supplies account would be (debited/credited) on the (left\right) side of the T- account and the Cash account would be (debited/credited) on the (left/right) side of the T-account. v. Smith Company purchased $8,000 of supplies on credit. Show how to record this transaction to the T-account by selecting the correct answer below. Enter $8,000 on the lef t side of the Supplies account; enter $8,000 on the right side of the Account payable account. vi. Select the statements that are true regarding debiting and crediting. (Check all that apply.) A credit will always decrease an asset account. A debit can increase an expense account. For an account where a debit is an increase, the credit is a decrease. A debit or a credit can increase or decrease an account, depending on the account. vii. Match the items on the left with their definition on the right. Assets = Things of value owned by the business. ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified Equity = The residual interest in the assets of a business after deducting the business’s debts. Revenues = The dollars earned because of services performed or products sold. Liabilities = The obligation owed by the business to creditors. viii. Which of the following statements about the dividends account is (are) correct? (Check all that apply.) dividends are increased on the lef t side of the T-account. Dividends is used to record distribution of assets to the owner of a business. Dividends decrease equity. ix. Which of the following statements about revenues is correct? Revenues cause equity to increase, and they are increased on the right side of the T-account. x. When entering a transaction into a general journal, the entry would be dated; then the accounts (debited/credited) would be listed first; then the accounts (debited/ credited) would be listed next; and finally, a(n) explanation would be included to show the details of the transaction. xi. J. Jackson invested $1,00 in his business in exchange for common stock. Show how accounts to record this transaction by selecting the correct answer below. xii. The account title is shown at the top of a T-account is called the debit side, and the right side is called the credit side. xiii. Which of the following accounts impact equity? (Check all that apply.) revenue, common stock, dividends, expenses. xiv. When the stockholders receive a dividend, how would this affect the equity of a business? Assets are decreased, and equity is decreased. xv. Which of the following account are examples of revenue? (Check all that apply.) Sales, Fees earned, Service revenue. xvi. The stockholders of a business received a $1000 dividend. How would this affect the ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified xxvi. which of the following statements is the best definition of an asset? Assets are resources owned or controlled by a company and that have expected future benefits. xxvii. Which of the following items would be considered “cash” and reflected in a company’s Cash account? (Check all that apply.) Checks, Money orders, Coin. xxviii. Select the statement below that best defines prepaid accounts. Prepaid accounts are assets that represent prepayments of future expenses. xxix. Notes receivable is considered a(n) (asset/liability). xxx. Match the definition of the left with the term/item on the right. A general ledger. It is a collection of all accounts with their activity and balances that exist in a business 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. A journal. It is a list of each account and its balance at any given time and is used to verify that debits = credits. A trial balance. It is a list of all ledger accounts which exist in a business and includes as identification number assigned to each account. A chart of accounts. xxxi. Which of the following statements is (are) correct regarding a journal? (Check all that apply.) xxxii. Illustrate how the financial statements are linked by placing them in the correct order of preparation. Income statement. Statement of retained earnings. Balance sheet. Transactions are generally entered in chronological order. A journal is used to record business transactions. In a journal, both the debit and credit side of the transaction can be seen. ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified xxxiii. Major Programming receives $5000 cash in advance of providing programming services to a customer. Describe how to record the transaction to the T-account by completing the following sentence. Cash would be (debited/credited) on the (left/right) side of the T-account, and Unearned Programming Revenue would be (debited/credited) on the (left/right) side of the T- account. xxxiv. Supplies are (assets/expenses/liabilities) until they are used. When they are used up, their costs are reported as (assets/expenses/liabilities). xxxv. Which of the following is a correct statement regarding the posting process? Entries must be posted to the ledger before financial statements are prepared. xxxvi. Which of the following statements is (are) correct regarding the effect of debiting or crediting accounts? (Check all that apply.) to increase the dividends account, you would debit it. To reduce accounts payable, you would debit it. To reduce cash, you would credit it. To increase an expense account, you would debit it. To decrease an asset, you would credit it. xxxvii. Gunner company made a $50 payment on account for a previous equipment purchase. Show how this transaction should be entered into T-accounts of Gunner Company. By selecting the correct answer below. Place $50 on lef t side of the Accounts payable account; place $50 on the right side of the Cash account. xxxviii. Which of the following accounts has a normal debit balance? (Check all that apply.) supplies, accounts receivable, buildings, cash. xxxix. which of the following statements is accurate regarding accounts payable? Accounts payable refer to promises to pay later, which may arise from the purchase of supplies or services. xl. Equipment is a(n) (asset/liabilities/expense) account. It is reported on the (left/right) side of the accounting equation and is (increased/decreased) when equipment is ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified purchased. xli. a business paid $40 in dividends. Show how to record the transaction to the T- account by completing the following sentence. Dividends would be (debited/credited) on the (left/right) side of the T-account. And Cash would be (debited/credited) on the (left/right) side of the T- account. xlii. Which of the following accounts would be considered an asset? (Check all that apply.) accounts receivable, building, cash, supplies. xliii. When preparing a trial balance, there are certain steps that need to be followed. Place the following steps in the correct order. List each account title and its amount from the general ledger. Compute the total of debit balances and the total of credit balances. Verify that total debit balances equal total credit balances. Locate and resolve errors. xliv. Holt Computer Services purchased $2,000 of new equipment and paid immediately. Illustrate how to record the transaction into T-accounts of Holt Services by completing the following sentence. The equipment account would be (debited/credited) on the (left/right) side of the T- account and the Cash account would be (debited/credited) on the (left/right) side of the T- account. xlv. Gunner corporation received $300 cash from a client that had been billed earlier in the month. Show how to record this transaction into T-accounts by selecting the correct answer below. Place $300 on left side of cash account; place $300 on the right side of accounts receivable account. xlvi. Which of the following statements is (are) correct regarding the definition of a liability? (Check all that apply.) A liability is a debt owed by the business. a liability can be settled by transferring assets or providing products or services to others. a liability ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified be accompanied by a(n) (increase/decrease) in total liabilities and (equity/assets). liv. Which of the following statement is (are) correct regarding a T-account? (Check all that apply.) A t-account may be used as a tool to visualize the effects of a transaction. A t- account represents a ledger account. A t-account will show the debit and credit effects of transactions. lv. The T-account payable had 4 transactions entered into it. It was increased by $300 and by $100 and decreased by $50 and by $150, respective. Its balance at the balance at the end of the period would be a (debit/credit) balance of $ 200. lvi. Recall the required information in a financial statement heading. Rearrange the following line items as they would appear in a heading. Name of the business Name of the financial statement Period of time the financial statement covers lvii. The business earns $700 of consulting revenue. How would these earnings affect the total equity of a business? Revenues increase, so total equity is increased. lviii. A trial balance is a(n) (list/balance/chart) of accounts and their balance at a point in time and is used to confirm that the sim of debit account balances equals the sum of credit accounting balances. Use one word for each blank. lix. Which of the following financial statements report(s) the financial position of a business over a period of time? (Check all that apply.) statement of retained earnings, statement of cash flows, income statement. ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified lx. In defining a reporting period, which of the following statement is (are) correct? (Check all that apply.) A reporting period is determined by the business. A reporting period can be one moth, one quarter or one year. A one-year reporting period is known as the fiscal year. lxi. Name the accounting document or report that is completed just prior to preparing financial statements and assist in preparing the financial statements. Trial balance. lxii. The statement of retained earnings reports: how equity changed over a period of time. lxiii. Which of the following statements below is true regarding the statement of retained earnings? Both the beginning and ending retained earnings balances are reported on the statement. lxiv. Which of the following statements is (are) true regarding the balance sheet? (Check all that apply.) It depicts the equality of the accounting equation. The report date includes a single calendar day. It reports the financial position at a point in time. lxv. Describe where dollar signs are appropriate in financial statements. Dollar signs are used beside the first and last number in a column. lxvi. Which of the following financial statement reports the financial position of a business at a point in time? Balance sheet. lxvii. To enter transactions on the left side of a T-account means you will (debit/credit) the account and will cause a(n) (decrease/increase) in an asset account. lxviii. Brown Company paid $40 in cash dividends. Show how to record the transaction to the T- accounts by completing the following sentence. Dividends would be (debited/credited) on the (left/right) side of the T-account, and Cash would be (debited/credited) on the (left/right) side of the T-account. lxix. l. Lyons started a business and invested $4,000 in exchange for common stock. Illustrate how to record the transaction in the T-accounts by completing the following sentence. The Cash ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified account would be (debited/credited) on the (left/right) side of the T-account and the Common stock account would be (debited/credited) on the (left/right) side of the T- account. lxx. an account is a record of increase and decreases in a specific asset, liability, equity, revenue or expense. lxxi. Choose the account(s) below, that would have a normal credit balance. Revenues. Account payable, common stock, unearned revenues. lxxii. Which of the selections below includes all of the required information to be entered in a journal? Date of transaction, explanation of transaction, debited and credited accounts, dollar amounts of debits and credits. lxxiii. Which of the following accounts has a normal credit balance? (Check all that apply.) Unearned consulting revenue. Accounts payable. Common stock. lxxiv. a business pays $500 for rent. How would this payment affect the equity of a business? Expenses are increased, so equity is decreased. lxxv. Stan programming Services provided $8,000 of services and received payment immediately. Show how to record this transaction to the T-accounts by selecting the correct answer below. Enter $8000 on lef t side of the cash; enter $8000 on the right side of the Service revenue. lxxvi. true or false: The cost of land owned by a business is recorded in the Land account and this account is classified as an expense. lxxvii. Pintel Company paid $2,000 cash for a 12-month insurance policy. Describe how to record the transaction to the T-accounts by completing the following sentence. Cash would be (debited/credited) on the (left/right) side of the T-account, and Prepaid insurance would be (debited/credited) on the (left/right) side of the T-account. ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified xc. which of the following statements is (are) correct regarding the notes payable account? Check all that apply.) Notes payable is a formal promise to pay a certain sum of money on a specific future date. Notes payable is increased on the right side of the T-account. Notes payable is a liability account. Notes payable is reported on the balance sheet. xci. which of the following statements is accurate regarding the Building account? a building asset account is used to record the costs of purchasing a store, office, warehouse or factory. xcii. Which of the following are examples of prepaid (expense) accounts? (Check all that apply.) Prepaid insurance, prepaid rent. xciii. which of the following statement is correct about prepaid expense? Prepaid expense are also called prepaid accounts and are considered assets. xciv. An annual insurance policy is paid in advance by a company. How will the company treat this initial payment and the subsequent expiration of a portion of the policy over time? (Check all that apply.) Over the time, the expired portion of the policy must be removed from the asset account as it has been used up and is no longer considered an asset. the initial payment will be recorded as an increase to a Prepaid Insurance account. As a portion of the policy expires, the expired portion will be removed and transferred to an exp. account. xcv. FR definition of a source document in the accounting process? A source document identifies and describes transactions and is the basis for entering an event into the accounting system. xcvi. Analyzing the accounting equation at the end of the month will reveal the following. Select all that apply. revenues and expenses will change the equity account. assets = liabilities + equity. xcvii. True or false: the revenue recognition principle states that revenue should be recorded in the period in which it is earned which may or may not be the period in which payment was ACCOUNTING FOR BUSINESS TRANSACTIONS.CHAPTER 2. WITH ANSWERS 100% CORRECT STUDY GUIDE, DOWNLOAD TO SCORE A/2023.Qualified actually received. xcviii. which of the following statements is (are) correct regarding the balance column in a ledger (or balance column account)? (Check all that apply.) immediately after posting a transaction, the balance of the account is written in the Balance column. A zero balance for an account is usually shown by writing zeros or a dash in the balance column. An abnormal balance is identified by circling it, writing it in red or setting it in brackets. xcix. Which of the following statements explains the differences between a Balance column account and a T-account? T-account are a simple way to visualize the effect of a transaction; however, Balance column accounts are used in actual accounting systems. c. The accounting process serves which of the following purposes in a business? (Check all that apply.) record business transaction, analyzes transaction, identifies transactions and source documents. ci. Which of the following statements is (are) correct regarding unearned revenues? (Check all that apply.) unearned revenue is a liability account which is set up when a customer pays in advance for a product or service. Unearned revenues refer to a liability that is settled when a company delivers a product or performs a service. cii. True or false: at the end of the period, the assets will still equal the liabilities plus equity. ciii. Which of the following would be considered a source document in an accounting system? (check all that apply.) sales ticket, checks, purchase order, employee time sheet. civ. which of the following statements is correct about prepaid expenses? Prepaid expenses are also called prepaid accounts and are considered assets.