Chapter 2

Question 1

account

Answer 1

An accounting form used to record the increases and decreases in each financial statement item.

Question 2

An account, in its simplest form, has what three parts.

Answer 2

A title, which is the name of the accounting equation element recorded in the account

A space for recording increases in the amount of the element

A space for recording decreases in the amount of the element

Question 3

T account

Answer 3

The simplest form of an account, which consists of an account title, a debit side, and a credit side.

Question 4

debit

Answer 4

Amount entered on the left side of an account. increases in assets are recorded as debits.

Question 5

credit

Answer 5

Amount entered on the right side of an account.decreases in assets are recorded as credits

Question 6

balance of the account

Answer 6

the number in the T chart that’s the amount of the difference between the debits and the credits that have been entered.

Question 7

ledger

Answer 7

A group of accounts for a business.

Question 8

chart of accounts

Answer 8

A list of the accounts in the ledger.

Question 9

Liabilities are often identified on the balance sheet by

Answer 9

titles that include payable.

unearned revenues

Question 10

unearned revenues

Answer 10

Cash received before services are delivered creates a liability to perform the services.

Question 11

The cash in your account is an asset to you but a ______ to the bank.

Answer 11

liability

Question 12

If the bank debits your account, the account balance will

Answer 12

decrease

Question 13

A deposit into your account at the bank is recorded as a(n)

Answer 13

credit

Question 14

Increases in stockholders’ equity as a result of selling services or products to customers are known as

Answer 14

revenues