Chapter 4 and 5

Question 1

chart of accounts

Answer 1

a list of all accounts

Question 2

how do we number accounts in the chart of account?

Answer 2

1. Assets
2. Liabilities
3. Owner’s Equity
4. Revenue
5. Expenses

Question 3

Double entry accounting

Answer 3

each transaction affects at least two accounts

Question 4

debit is on the _____, credit is on the ______.

Answer 4

left, right.

Question 5

Asset
------------
      |
      |
      |

Answer 5

Asset
------------
    \+ |  -
       |
       |

Question 6

Liability
------------
           |  
           |
           |

Answer 6

Liability
------------
       -  |  +
           |
           |

Question 7

Owner's
   Equity
------------
           |  
           |
           |

Answer 7

Owner's
     Equity
------------
    (-)  |  +
           |
           | investment

(-) = owners capital

Question 8

Owners 
Withdrawals
------------
         | 
           |
           |

Answer 8

Owners 
Withdrawals
------------
      \+  |  
           |
           |

Question 9

Expenses
------------
           | 
           |
           |

Answer 9

Expenses
------------
       \+  |  
           |
           |

Question 10

Revenue
------------
           | 
           |
           |

Answer 10

Revenue
------------
           |  +
           |
           |

Question 11

where are normal balances found?

Answer 11

on the increase side of an account

Question 12

revenue (fees earned)

Answer 12

increases in OE as a result of selling goods or providing service (only a credit)

Question 13

expenses

Answer 13

every time you pay a cost of operating a business the expenses go up (accumulates) so if you pay rent

Rent. Exp. Cash
———- ——-
+| |-
| |

Question 14

owner drawing

Answer 14

treated like an expense- only a debit accumulates

Owner D. Cash
———- ——-
+| |-
| |

Question 15

temporary capital accounts

Answer 15

revenue, expense, and withdrawals accounts are used to collect information for a single accounting period

Question 16

permanent accounts

Answer 16

continuous from one accounting period to the next

Question 17

name the three basic parts to a T account

Answer 17

classification, account, debit/credit

Question 18

what are the six steps involved in analyzing a business transaction?

Answer 18

1. identify accounts affected
2. classify accounts affected
3. determine account of increase or decrease for each account affected
4. which account is debited? for what amount?
5. which account is credited? for what amount?
6. what is the complete entry in T-accounts forms?

Question 19

account

Answer 19

shows the specific balance for any item

Question 20

new accounting equation

Answer 20

A = L + OC + R - OwD - E

Question 21

how do you set up a trial balance?

Answer 21

Trial Balance
Date

Question 22

what are the two accounts affected ?

paid Floral Fixtures a portion of the amount owed for furniture purchased earlier in the month, $2,500

Answer 22

A/P, name - debit, $2,500

Cash - credit, $2,500

Question 23

which accounts are affected?

you received $350 for the service provided in transaction #8

Answer 23

cash - debit, $350

A/R - credit, $350

Question 24

what the acronym for T - accounts?

Answer 24

ALOeOdER

Question 25

what’s the acronym for chart accounts ?

Answer 25

ALORE

Question 26

T is the letter…

Answer 26

T