Which of the following accounts impact equity? … of the following accounts impact equity? (Check...

Which of the following accounts impact equity? (Check all that apply.)

~Your answer is correct.

a Owner, Withdrawal

& Expenses

Liabilities

a Owner, Capital

& Revenue

Assets

Challenge

• Read about this

) )

)

)

The correct answer is shown.

The T- account for Cash had 3 transactions entered into it. It was increased by $400 and decreased

by $100 and by $30, respectively. Its balance at the end of the period would be a (debit/credit) Jebit

balance of $270.

~Your answer is correct. • Read about this

Challenge

Which statement best describes a T-account?


AT-account is used in a business to accurately report the financial status of its operations to the

owners.

AT-account represents a ledger account and is a tool used to understand the effects of one or

more transactions.

AT-account is a formal financial statement which reports whether debits =credits at any given

time.

AT-account is used to record transactions 1in a chronological order and serves as a book of

original entry.

Match the item on the left with the correct definition on the right

~Your answer Is correct.

You matched:

Creditors

~ Uabilities

~ Assets

~ Expenses

ChalltDJt ----

• Raad about this

The correct match:

a-a Individuals or organizations that have rights to receive payments from a business

oa Claims against the assets of a business

a-a Things of value owned by a business

D-a The costs of doing business

You are entering a transaction in the journal. Place the following steps in the order that they would be

entered in the journal.

'-'Your answer is correct.

~ :1 Enter date of transaction in date column

( o,/ 2 Enter name of account(s) debited and their amount(s)

( o,/ 3 Enter name of account(s) credited and their amount(s)

8 Enter explanation

Challenge

• Read about this

Which of the following statements is (are) true about accounts receivables? (Check all that apply.)


Accounts receivable is increased when credit sales are made.

a Accounts receivable is increased with a debit.

a Accounts receivable reflects the amount of money still owed by customers. ) Accounts receivable is increased when payments are received from credit customers.

Accounts receivable is a liability.

Accounts receivable is decreased when payments are received from credit customers.

Challenge

Which of the following is correct regarding posting a transaction?


Posting means to enter transactions into a journal.

a Posting means to transfer journal information to a ledger. )

Posting takes place once during an accounting period.

Challenge


On Jan. 2, Callie Taylor performed $800 worth of services for a client. The client paid $100

immediately, but promised to pay the balance next month. The journal entry to record this transaction

in Callie Taylor's books would include a 0eb1' .. (debit/credit) to the Cash account; a Jeo·t (debit/credit)

to the Accounts receivable account and a credi·' (debit/credit) to the Service revenue account.


ChaUenge

Match the items on the left with their definition on the right.


You matched: The correct match:

~ Assets c-:::J Things of value owned by the business

f Owner's equity C""'5J

The residual interest in the assets of a business after

ll deducting the business's debts

t Revenues c-:::J The dollars earned because of services performed or

IL products sold

~ Liabilities c-:::J The obligations owed by the business to creditors

Challenge

Select the statement below that best defines prepaid accounts.


Prepaid accounts are assets that represent prepayments of future expenses.

Prepaid accounts are expenses and are increased with a credit.

Prepaid accounts are liabilities that are due within a specified time period.

Prepaid accounts reflect a company's cash balance and include currency, coins and money

orders.

Challenge


J. Brown purchased $900 of supplies on credit. Illustrate how to record the transaction to T-accounts

by completing the following sentence.

Accounts payable would be rredite- I( debited,/ credited) on the ng 1c(left/right) side of the T-account,

and Supplies would be debit6d(debited/credited) on the letL (left/right) side of the T-account.


Challenge

Which of the following statements is (are) correct regarding the posting process? (Check all that

apply.)


The journal page is entered in the posting reference column of the journal.

Posting is only required at the end of the year.

Challenge

• Read about this

Which of the following statements is correct in regards to debiting and crediting an account?


Debit means to increase an account.

A debit or a credit can increase an account, depending on what kind of account it is.

Credit means to increase an account.

Credit means to decrease an account if the account is on the right side of the accounting

equation.

Challenge


An account is a record of increases and decrease!::> in a specific asset, liability, equity, revenue or

expense item.


Challenge

The business earns $2,800 cash for services performed. How would this receipt affect the total

equity of a business?


Revenues would be decreased, so equity would be decreased.

There is no affect on total equity.

Revenues would be increased, so equity is increased.

Revenues would be decreased, so equity is increased.

Challenge

• Read about this


Enter one word for each blank. The expanded accounting equation is:

assers = ltao1htiPS + owner's capital + revenues - expenses - owner's withdrawals. Do not include the

word "account(s)" in your answers.


Challenge

When preparing a trial balance, there are certain steps that need to be followed. Place the following

steps in the correct order.

V Your answer Is correct. M Read about this

F1 List each account title and its amount from the general ledger.

~ 2 Compute the total of debit balances and the total of credit balances.

8 Verify that total debit balances equal total credit balances.

~ Locate and resolve errors.

Challenge

Match the definition on the left with the term/item on the right.

V'Your answer is correct

Your answers:

It is a collection of all accounts with their activity and c-:J V' A general ledger balances that exist in a business.

It is a book of original entry that includes a V' A journal chronological record of all transactions that have c-:J occurred within a business during a period occurred

It is a list of each account and its balance at any given c-:J V' A trial balance time and is used to verify that debits = credits

It is a list of all ledger accounts which exist in a business and includes an identification number assigned to each account

i~@i!.i!JM

V' A chart of accounts c-:J

l l


After entering a transaction into the accounting equation, an increase in total assets can be

accompanied by a(n) (increase/ decrease) icreas~ in total liabilities and (equity/ assets)Pqu y.


Challenge

Which of the following accounts are examples of expenses? (Check all that apply.)


a Rent expense

Withdrawals

Accounts payable

a Supplies expense

Challenge

• Read about this

]

]

S. Sunshine received and paid for a utility bill of $50. Show how to record this transaction to the T

accounts by selecting the correct answer below.

~Your answer is correct. • Read about this '

$50 on the left side of the Utility expense account; $50 on the left side of the Cash account.

$50 on the right side of the Utility expense account; $50 on the right side of the Cash account.

a $50 on left side of the Utility expense account ; $50 on the right side of the Cash account. j $50 on the left side of the Cash account; $50 on the right side of the Utilities expense account.

Challenge

Which of the following statements is (are) correct regarding the Owner, Capital account? (Check all

that apply.)


The Owner, Capital account is an equity account.

a The Owner, Capital account is used to record investments by the owner.

The Owner, Capital account is used to record purchases of assets.

The Owner, Capital account is increased on the left side of the T-account.

The Owner, Capital account is increased on the right side of the T-account.

Challenge

Which of the following describes a general ledger?


The general ledger describes all liability accounts.

The general ledger combines sales and expenses to determine the net income of a business.

a The general ledger is a record containing all accounts used by a company. )

The general ledger is a record of all transactions in alphabetical order.

Challenge


Supplies are ~ssets (assets/expenses/liabilities) until they are used. When they are used up, their

costs are reported as expenses (assets/expenses/liabilities).


I

• Read about this

Challenge

Choose the account(s) below, that would have a normal credit balance.


owner's withdrawals

a unearned revenues

expenses,

ifll revenues

a accounts payable

a owner's capital

Challenge

• Read about this

]

Which of the following statements is correct regarding the effect of debits and credits in accounts?


Assets are on the left side of the accounting equation, so to increase them, you would credit

them.

Revenues increase equity, so to increase a revenue account, you would debit it.

Investments cause Owner, Capital to increase, so to increase the capital account. you would debit

it.

Expenses reduce equity, so to increase an expense account you would debit it.

Challenge


J. Brown withdrew $40 from the business's checking account for personal use. Show how to record

the transaction to the T-accounts by completing the following sentence.

Owner, Withdrawals would be debited( debited/credited) on the er1(left/right) side of the T-account,

and Cash would be credited( debited/credited) on the ng1 (left/right) side of the T-account.


Challenge


The owner of a business withdrew $40 from the business's checking account for personal use. Show

how to record the transaction to the T-accounts by completing the following sentence.

Owner, Withdrawals would be debite (debited/ credited) on the e (left/right) side of the T-account.

and Cash would be c;redited(debited/ credited) on the r"gh (left/right) side of the T-account.


A business pays $500 for rent. How would this payment affect the equity of a business?


Expenses are decreased, so equity is decreased.

a Expenses are increased, so equity is decreased. ) Expenses are increased, so total equity is increased.

Challenge

Choose the statement below that correctly explains a general journal..

VYour answer is correct. • Read about this

A journal is a record of all of the accounts that exist in a business and includes their identifying

account number.

A journal is a list of accounts and their balances at any given moment.

A journal is a complete record of each transaction in one place and includes the debit and credit

of each transaction.

A journal is a record keeping device that is used to monitor customer account balances.

Challenge

Which of the following statements is correcf?


Debiting means to increase a liability account.

a Debiting means to enter transactions on the left side of a T-account.

Debiting means to enter transactions in a book of original entry in chronological order.

Debiting means to enter transactions on the right side of a T-account.

Challenge

]

Which of the following would be included on a statement of owner's equity? (Check all that apply.)


Total revenues

n Capital balance at end of period

Total assets

n Capital balance at beginning of period

Total liabilities

lfl Net income (loss)

lfl Owner withdrawal's

n Owner investments

Challenge

Which of the following accounts has a normal debit balance? (Check all that apply.)

~Your answer Is correct. • Read about this

lfl~c_as_h ____________________________________________________ _

Accounts payable

lfl Buildings

lfl Accounts receivable

Unearned revenue

lfl Supplies

Challenge


Since expenses are the costs of doing business and cause equity to oecreasP (increase/decrease),

expenses are increased on the lef (right/left) side of their T-account.


Challenge

Jeff, the owner of a business, invests an additional $100 into his business from his personal

checking account. How would this affect the equity of his business?


Owner, Capital would be increased and total equity would also increase.

Owner, Capital would be decreased and equity would be decreased.

Owner, Capital would be increased and total equity would decrease.

Owner, Capital would be decreased and total equity would increase.

Challenge

• Read about this

When entering transactions into accounts, the rules of double-entry accounting must be followed.

These rules include: (Check all that apply.)


a the total amount debited must equal the total amount credited.

The total number of accounts debited must equal the total number of accounts credited.

The accounting equation must remain in balance.

There must be at least one credit and one debit.

Challenge

]


When financial statements are prepared, unexpired prepaid accounts are recorded as assets

(expenses/assets/liabilities) and the expired portion of the prepaid account is reported as a(n)

expense (expense/asset/liability).

'-'Your answer is correct. • Read about this

Challenge


The Notes payable account is a(n) ·ability (asseVliability/expense) account and is increased on the

rignL (left/right) side of the T-account.


Challenge

Which of the following statements best explains the posting reference in a journal and a ledger?


The posting reference is entered when journalizing a transaction, so there is no need for it in the

ledger.

The posting reference creates a link between the journal and the ledger.

The posting reference depicts the initials of the person journalizing and posting.

A posting reference includes a detailed explanation of the transaction.

Challenge

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.

Building costs are treated as expenses in the period they are incurred and reported on the

income statement.

A Building expense account is used to record the costs of purchasing a store, office, warehouse

or factory.

A Building account is increased on the right side of a T-account because it is an asset.

Challenge

The balance sheet reports:


a assets, liabilities and the ending capital balance

the revenues less the expenses incurred by a business

how cash was received and spent during a period

how equity changed over a period of time

Challenge

• Read about this

)

Which of the following financial statements reports the financial position of a business at a point in

time?


Income statement

a Balance sheet

Statement of cash flows

Statement of owner's equity

Challenge

• Read about this

)

Analyzing the accounting equation at the end of the month will reveal the following. Select all that

apply.

._,,Your answer is correct. • Read about this

a assets= liabilities+ equity

assets and liabilities will be reported on the income statement

revenues and expenses will change the equity account

increases and decreases in cash will be reported on the balance sheet

Challenge

]

Describe where dollar signs are appropriate in financial statements.


Dollar signs are used besides every number in a column.

a Dollar signs are used beside the first and last numbers in a column. ) Dollar signs are not used in financial statements.

Challenge

Which of the following lists of items contain only examples of prepaid (expense) accounts?


Prepaid rent, prepaid land

Prepaid insurance, unearned revenue, prepaid accounts payable

a Prepaid rent, prepaid insurance ] Prepaid insurance, prepaid accounts receivable, prepaid land

Challenge

Which of the following is the best definition of a source document in the accounting process?


A source document identifies and describes transactions and is the basis for the accounting

information which is entered in an accounting system.

A source document shows all the information about the legal rights a company has in relation to

when it should pay a bill.

A source document is used to determine who hired an employee that is assigned the duty of

entering transactions into the accounting process.

Challenge

Which of the statements below is true regarding the statement of owner's equity?


Total expenses are reported on the statement.

Ending total assets is reported on the statement.

a Both the beginning and ending Capital balances are reported on the statement.

Only the beginning Capital balance is reported on the statement.

Only the ending Capital balance is reported on the statement.

Challenge

• Read about this

Identify which of the following formulas correctly defines how to calculate the debt ratio.


Total liabllitiesjTotal equity

Total assets/Total liabilities

Total assets/Net income

a Total liabilities/Total assets

Challenge

• Read about this

)

The accounting process serves which of the following purposes in a business? (Check all that apply.)


a Identifies business transactions

a Presents information in business reports

a Summarizes business transactions

a Analyzes and records business activities

Identifies employees to be fired

Determines management's responsibilities

Cballenge

M Read about this

Given the following information for Jackson's Boots, calculate its Debt Ratio for the current year. $ in Thousands 20X2

Total assets $250 Total liabilities $100

Total equity $150

'-'Your answer is correct. • Read about this

lfl~·4_o ______________________________________________ --J

2.50

.66

Challenge

Review each of the following statements to determine which is correct regarding the importance of

assessing a company's risk of paying debt. (Check all that apply.)


A company that finances their assets by borrowing will need to make enough money to pay off th

debt.

Assessing a company's risk of paying off debt is not required when the company is highly

leveraged.

A company's required debt payments may be greater than its ability to generate money to make

those payments.

Challenge

Which of the following financial statements report(s) the financial position of a business over a period

of time? (Check all that apply.)


a Statement of cash flows

a Statement of owner's equity

Balance sheet

a Income statement

Challenge

• Read about this

) )

)

Which of the following statements explains the difference between a Balance column account and a

T-account?


T-accounts show both the debit and credit side of a transaction, while the Balance column

accounts show only the debit or the credit to the account.

Balance column accounts are a less formal way of recording a transaction, while T-accounts are

used in actual business practice.

T-accounts are a simple way to visualize t he effect of a transaction; however, Balance column

accounts are used in actual accounting systems.

Balance column accounts ref lect year-end balances, but T-accounts reflect the current balance at

any point in t ime.

Challenge

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 time, the expired portion of the policy must be removed from the asset account as it has

This prepayment of the policy will initially be treated as an expense and over time, the expired

portion will be treated as an asset.

As a portion of the policy expires, the expired portion will be removed and transferred to an

expense account.

Challenge

Which of the following statements is correct about prepaid expenses?


Prepaid expenses are another name for accounts receivable and are reported as an asset.

Prepaid expenses are also called prepaid liabilities and are classified as liabilities.

a Prepaid expenses are also called prepaid accounts and are considered assets.

Prepaid expenses are current expense accounts and are reported on the income statement.

Challenge

]

Which of the following would be considered a source document in an accounting system? (Check all

that apply.)


]

Challenge

True or false: The differences between U.S. GAAP and IFRS will increase over time as they work

towards a common conceptual framework.


lfl False

True

Challenge

• Read about this

]

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 actually received.


lfl~T_ru_e ________________________________________________ )

False

Challenge

Name the accounting document or report that is completed just prior to preparing financial

statements and assists in preparing the financial statements.


T-account

General ledger

General journal

a Trial balance

Challenge

• Read about this

]

Which of the following statements is (are) correct regarding unearned revenues? (Check all that

apply.)


Unearned revenues refer to assets which have yet to be billed to customers for services

performed by the business.

Unearned revenues are amounts owed by customers for services performed.

Unearned revenues refer to a liability that is settled when a company delivers a product or

performs a service.

Unearned revenue is a liability account which is set up when a customer pays in advance for a

product or service.

Challenge

In defining an accounting period, which of the following statements is (are) correct? (Check all that

apply.)


An accounting period can be one month, one quarter or one year.

An accounting period refers to each day in the calendar year.

An accounting period is used to determine the due date of payables.

A one-year reporting period is known as the fiscal year.

a An accounting period is determined by the business.

Challenge

Which of the following statements is (are) correct regarding the Balance column in a ledger (or

Balance column account)? (Check all that apply.)

~Your answer is correct. l!!J Read about this

It is not necessary to calculate the new balance of the account until the end of the period -

before financial statements are prepared.

Immediately after posting a transaction, the balance of the account is written in the Balance

column.

The amount of the debit or credit to the aocou nt is also entered in the Balance column of the

ledger.

lfi A zero balance for an account is usually shown by writing zeros or a dash in the balance column.

Challenge

J. Jackson invested $1,000 in his business. Show how to use T-accounts to record this transaction by

selecting the correct answer below.


Credit Cash; debit Owner, Capital.

Debit Cash; credit Revenue.

Debit Investments; credit Cash.

a Debit Cash; credit Owner, Capital.

Challenge

• Read about this

]

Which of the following statements is (are) correct regarding the sides of a T-account? (Check all that

apply.)

~Your answer is correct. M Read about this

if! The right side is called the credit side.

Liability accounts will be increased on the left side.

If! Asset accounts will be increased on the left side.

if! Liability accounts will be increased on the right side.

if! The left side is called the debit side.

The left side is called the credit side.

Asset accounts will be increased on the right side.

Challenge


Equipment is a(n) asse (asseVliability/expense) account. It is reported on the lef (left/right) side of

the accounting equation and is i 1creasElr(increased/decreased) when equipment is purchased.


Challenge

On Nov.1, L. Lyons pays $2,400 cash for supplies. Show how to use T-accounts to record this

transaction by selecting the correct answer below.

Y'Your answer is correct.

Cash would be debited, and Supplies would be credited

Supplies expense would be credited; Cash would be debited.

Supplies would be credited; Cash would be credited.

a Supplies would be debited, and Cash would be credited.

Challenge

• Read about this

]

Which of the following accounts would be considered an asset? (Check all that apply.)

V Your answer is correct .

& supplies

& Building

Accounts payable

Owner's capital

a Accounts receivable

• Read about this

·~c_a_sh __________________________________________________________ _

Challenge


Notes receivable is considered a(n) asset (asset/liability) and is increased on the eft (left/right) side

of a T-account when received.


Challenge

Recall the required information in a financial statement heading. Rearrange the following line items

as they would appear in a heading.

~Your answer Is correct. • Read about this

~ Name of business

~ Name of financial statement

~ Period of time the financial statement covers

Challenge


Accounts payable refer to obligations owed y (by/to) the business and are classified as a(n) rability

(asset/liability/expense) account.


Challenge

On Mar 3, L. Lyons received $100 cash in advance of providing catering services to a customer. Use

your knowledge of what a correct journal entry should look like to identify what would be included in

the correctjournal entry


Unearned Revenue would be debited and listed first

Unearned Revenue would be credited and listed second

Accounts Receivable would be debited and listed first

Cash would be credited and listed second

Bf a Cash would be debited and listed first

Challenge

S. Gunner purchased a piece of equipment costing $6,000. She paid $1,000 immediately and put

the rest on account. Show how to record this transaction to the T-accounts by selecting the correct

answer below.


$6,000 on left side of the Equipment account; $5,000 on the right side of the Accounts payable

account; $1,000 on the right side of the Cash account.

$6,000 on the left side of the Equipment account; $6,000 on the right side of the Accounts

payable account.

$6,000 on the left side of the Equipment account; $6,000 on the right side of the Cash account.

$6,000 on the right side of Equipment; $5,000 on the left side of Accounts payable; $1,000 on

the right side of the Cash account.

Challenge

When Myrtle withdraws $50 from the business for personal use, how would this affect the equity of a

business?

" Your answer is correct.

Assets are increased and equity is decreased.

Equity is increased and assets are increased.

a Assets are decreased and equity is decreased.

Assets are decreased and liabilities are decreased.

Challenge

• Read about this

Which of the following statements is the best definition of an asset?


a Assets are resources owned by a company and that have expected future benefits.

Assets represent the owner's claims against a company.

Assets are the distributions to the owners of a company.

Assets are claims against the company.

Challenge

Which of the following items would be considered "cash" and reflected in a company's Cash account?

(Check all that apply.)

~Your answer is correct. M Read about this

a Money orders )

ti checks

Notes Receivable

lfl~c_o_in ______________________________________________________ __

Prepaid Insurance

Challenge

The correct answer Is shown.

Holt Computer Services received $200 from a customer that it had billed earlier in the month.

Illustrate how to record the transaction to the T-accounts by completing the following sentence.

Accounts receivable would be credited( debited/ credited) on the r"gh (left/right) side of the T-account,

and Cash would be debited( debited/ credited) on the left (left/right) side of the T-account.

"'Your answer is correct. • Read about this

Challenge


R&R Programming pays a $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.

Accounts payable would be debih~< (debited/credited) on the IP t(left/right) side of the T-account, and

Cash would be c ·ea1te I( debited/credited) on the 1gh~ (left/right) side of the T-account.


Challenge

Which of the following statements is (are) correct regarding the definition of a liability? (Check all that

apply.)


A liability is an asset waiting to be received by a business.

A liability is a thing of value owned by the business and is increased on the left side of a T

account.

Challenge

Which of the selections below includes all of the required information to be entered in a journal?


Debited and credited accounts, dates and explanation of transaction, initials of person entering

transaction

Initials of person entering the transaction, debited accounts, dollar amounts of debits and date of

transaction

Date of transaction, explanation of transaction, debited and credited accounts, dollar amounts of

debits and credits

Challenge

Illustrate how the financial statements are linked by placing them in the correct order of preparation.


~ 1 Income statement

E 2 Statement of owner's equity

[ ~ 3 Balance sheet ----------------------------

Challenge


J. Brown provided services to a customer and immediately collected $1,900 cash. Show how to

record the transaction to the T-accounts by completing the following sentence.

Service Revenue would be redit&rl(debited/credited) on the , ,g· (left,/right) side of the T-account,

and Cash would be debit&d(debited/credited) on the 1~rt (left/right) side of the T-account.


ChaHenge

Which of the following statements is accurate about the Land account? (Check all that apply.)


a The Land account is an asset. ] The Land account is an expense account.

The Land account would be increased on the left side of its T-account.

The Land account records the costs of purchasing an office, warehouse or store.

a The Land account is used to record the costs of land purchased by the business. )

Challenge

Which of the following statements about revenues is correct?


Revenues cause equity to increase, and they are increased on the left side of the T-account.

Revenues cause equity to increase, and they are increased on the right side of the T-account.

Revenues cause equity to decrease, and they are increased on the right side of their T-account.

Revenues cause equity to increase, and they are reported on the left side of the accounting

equation.

Challenge

From the lists of accounts below, which one contains only revenue accounts?


Accounts payable, Interest revenue, Commissions earned

Sales, Rent revenue, Accounts receivable

Interest revenue, Professional fees earned, Sales

Accounts receivable, Service revenue, Professional fees earned

Challenge

• Read about this

Which of the following would be included on an income statement? (Check all that apply.)


a Total expenses

Total equity

a Total revenues

Total liabilities

& Netincome

Tota I assets

Challenge

M Read about this

]

Which of the following statements is (are) correct? (Check all that apply.)


a Crediting a liability account will increase it.

Crediting the Owner, Capital account means to increase it.

Crediting means to enter transactions on the right side of a T-account.

Crediting means to enter transactions on the left side of a T--account.

a Crediting can be abbreviated "Cr2". )

Challenge


The Owner, Withdrawal account is used to record withdrawals

(investments/withdrawals/expenses/revenues) by the owner and has a 1egative (positive/negative)

impact on equity.


Challenge


A trial balance is a(n) (lisVbalance/chart) SL 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 c ed ~ account balances.

Use one word for each blank.


Challenge

Which of the following accounts impact equity? … of the following accounts impact equity? (Check...

Documents

Transcript of Which of the following accounts impact equity? … of the following accounts impact equity? (Check...