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ACC 231 > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

What is a transaction?

A

Any event that has a financial impact on a business and can be measured reliably.

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2
Q

A(n) __________ is the record of all the changes in a specific asset, liability, or stockholders’ equity during a period.

A

Account

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3
Q

What type of account is cash?

A

Asset Account

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4
Q

What type of account is prepaid expenses?

A

Asset Account

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5
Q

What type of account is accounts receivable?

A

Asset Account

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6
Q

What type of account is notes receivable?

A

Asset Account

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7
Q

What type of account is PP&E?

A

Asset Account

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8
Q

What type of account is accounts payable?

A

Liability Account

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9
Q

What type of account is notes payable?

A

Liability Account

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10
Q

What type of account is common stock?

A

Stockholders’ Equity Account

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11
Q

What type of account is Retained Earnings?

A

Stockholders’ Equity Account

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12
Q

What type of account is Revenues?

A

Stockholders’ Equity Account

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13
Q

What type of account is Expenses?

A

Stockholders’ Equity Account

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14
Q

What type of account is Dividends?

A

Stockholders’ Equity Account

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15
Q

What is the rules of Debits and Credits?

A

Debit means left side, Credit means right side of T-Account

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16
Q

Assets are ________ by debiting and ________ by crediting.

A

increased, decreased

17
Q

Liabilities are ________ by debiting and ________ by crediting.

A

decreased, increased

18
Q

Common stock is ________ by debiting and ________ by crediting.

A

decreased, increased

19
Q

Retained earnings are ________ by debiting and ________ by crediting.

A

decreased, increased

20
Q

Revenues are ________ by debiting and ________ by crediting.

A

decreased, increased

21
Q

Expenses are ________ by debiting and ________ by crediting.

A

increased, decreased

22
Q

Dividends are ________ by debiting and ________ by crediting.

A

increased, decreased

23
Q

When you purchase supplies on credit, you debit ______ and credit _______.

A

Debit supplies, credit accounts payable

24
Q

The business sold Tony Stark $15,000 of Common Stock for cash. How is this recorded?

A

Dr. Cash 15,000

Cr. Common Stock 15,000

25
Q

Steve Rogers purchase equipment for $3,000. How is this recorded?

A

Dr. Equipment 3,000

Cr. Cash 3,000

26
Q

Avengers Inc. borrows $10,000 from the bank and signs a two-year note payable to the bank. How is this recorded?

A

Dr. Cash 10,000

Cr. Notes Payable 10,000

27
Q

Avengers Inc. provides services for clients. Avengers Inc. collects $1,250 cash for services provided. How is this recorded?

A

Dr. Cash 1,250

Cr. Service Revenue 1,250

28
Q

Bruce Banner works for Avengers Inc. Bruce Banner performs $4,200 of services, and in return, receives the clients promise to pay this within one month. How is this recorded?

A

Dr. Accounts Receivable 4,200

Cr. Service Revenue 4,200

29
Q

Avengers Inc. pays $1,000 to the bank for its notes payable. How is this recorded?

A

Dr. Notes Payable 1,000

Cr. Cash 1,000

30
Q

Avengers Inc. pays $2,000 in Rent for Avengers Tower monthly. The company pays rent for the month of September. How is this recorded?

A

Dr. Rent Expense 2,000

Cr. Cash 2,000

31
Q

Avengers Inc. pays $1,300 of Cash Dividends to Tony Stark, the stockholder. How is this recorded?

A

Dr. Dividends 1,300

Cr. Cash 1,300

32
Q

True or False. Debit means increase.

A

False. Debit simply means LEFT in accounting terms. Increases/decreases can happen by means of debiting or crediting.

33
Q

True or False. Credit does not mean decrease.

A

True. Credit simply means RIGHT in accounting terms. Increases/decreases can happen by means of debiting or crediting.

34
Q

___________ _____________ is the balance that appears on the side of an account where increases are recorded.

A

Normal balance

35
Q

What does a Trial Balance do?

A

Summarizes all the account balances helping to prove that all debit balances equal total credit balances.

36
Q

True or False. A Trial Balance is a financial statement.

A

False. A Trial Balance is NOT a financial statement.

ACC 231 (3 decks)

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