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Exam 2: Recording Business Transactions

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Question 71

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Paying a utility bill when received would:

A) increase expenses
B) increase liabilities
C) increase owners' equity
D) decrease revenues

E) A) and B)
F) All of the above

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Question 72

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What criteria are used to determine if a transaction has occurred?

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If the event affects the entity's financ...

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Question 73

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The normal balance of a liability account is a ________ and the normal balance of the common shares account is a ________.

Identify the normal balance for the Retained Earnings account and expense accounts. What is the reasoning behind the "normal balances" for these accounts?

Moving data to the ledger is known as journalizing.

If the debit amount of an entry to record the purchase of supplies on account was not posted:

The entry to record an owner investment of $500 into the business would be:

Describe the journalizing process including its steps.

Assets, owners' equity, and expenses are all increased by debits.

Prepare journal entries in good form for the following transactions for the Calorie Corp. a. Owner invested cash of $12,000 and office equipment valued at $7,500 into the business, receiving common shares in exchange. b. Purchased supplies for cash, $1,000. c. Paid $750 for one months rent on the store. d. Billed a client $1,500 for services rendered. e. Owner received a dividend of $300.

Where is information for each account stored?

The right side of a T-account is always the:

Explain the following terms in your own words and give an example of each for Humpty's Equipment Inc. a. asset b. liability c. shareholders' equity d. dividend e. revenue f. expense

Purchasing a three-year insurance policy for cash would include a:

Which of the following accounts does not have a normal credit balance?

The normal balance of an expense account is a ________ because expenses decrease ________.

A credit decreases the balance of which types of accounts?

A journal is a record of financial transactions and can be thought of as a diary; it shows a chronological listing of a business's accounting activities.

Which element of an accounting system provides information about the balance in each account?

An organization's list of all its accounts and the related account numbers is called a: