Accounting_2

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DSWare
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218805
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Accounting_2
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2013-05-09 21:43:54
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Accounting
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Accounting chapter 2
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  1. What items are reported on the income statement?
    Revenues, expenses, gains and losses
  2. On the income statement what is the equation for Net Income?
    Revenues - Expenses + Gaines - Losses = Net Income
  3. The Net Income reported onthe income statement causes the ____________ on the balance sheet to change.
    Owners Equity
  4. Revenues, gains and net income cause the owners equity to increase or decrease?
    Increase
  5. Expenses, losses, and a net loss cause the owners equity to increase or decrease?
    decrease
  6. _____________ requires that two accounts or more are involved in every transaction.
    Double Entry
  7. When cash is received ________ the cash account.
    Debit
  8. When cash is paid __________ the account cash.
    Credit
  9. The chart of accounts is a listing of the accounts presently having balances in the general ledger. True or False
    False
  10. Some accounting software classify some accounts as __________ accounts,
    while accountants might refer to these accounts as "revenue" accounts.
    income
  11. The accounts shown in the chart of accounts can be broadly classified into two categories: ______________ _____________ accounts and ______________  ______________ accounts.
    balance sheet and income statement
  12. Every transaction will affect how many accounts?
    two or more
  13. In addition to the standard chart of accounts for a specific industry,
    you will likely want to expand and/or modify the chart of accounts to
    fit your business. One tool that would be helpful in determining the
    accounts for your company would be your company's _______________ chart.
    organization
  14. What is this?

    Current Assets (account numbers 10000 - 16999)

    10100   Cash - Regular Checking
    10200   Cash - Payroll Checking
    10600   Petty Cash Fund
    12100   Accounts Receivable
    12500   Allowance for Doubtful Accounts
    13100   Inventory
    14100   Supplies
    15300   Prepaid Insurance
    Property, Plant, and Equipment (account numbers 17000 - 18999)

    17000   Land
    17100   Buildings
    17300   Equipment
    17800   Vehicles
    18100   Accumulated Depreciation - Buildings
    18300   Accumulated Depreciation - Equipment
    18800   Accumulated Depreciation - Vehicles
    Current Liabilities (account numbers 20000 - 24999)

    20100   Notes Payable - Credit Line #1
    20200   Notes Payable - Credit Line #2
    21000   Accounts Payable
    22100   Wages Payable
    23100   Interest Payable
    24500   Unearned Revenues
    Chart of accounts
  15. In a manual bookkeeping system, transactions are first recorded in a __________.
    journal
  16. In a manual bookkeeping system, each amount in a journal is posted to an _____________.
    account
  17. A company's ___________ ledger contains all of the accounts such as Rent Expense, Supplies, and Interest Payable.
    general
  18. An internal document that is prepared to prove that the total of all the
    debit balances is equal to the total of all the credit balances is a _________  ___________.
    trial balance
  19. Historically, the final step of the _______________'s responsibilities was to prepare a trial balance.
    bookkeeper
  20. Accounting _____________ has made the recording of transactions much more efficient.
    software
  21. Accounting software has eliminated many of the math and recording ________ that were common with a manual system.
    errors
  22. Because at least two accounts are involved in every transaction, the bookkeeping system is referred to as _________ entry bookkeeping.
    double
  23. Invoices from vendors (suppliers) which are due in 30 days should be credited to Accounts ___________
    payable
  24. The __________ of accounts is a listing of the general ledger accounts in which amounts can be posted.
    chart
  25. The chart of accounts has two broad types of accounts: balance sheet accounts and __________  ______________ accounts.
    income statement
  26. Historically, the financial statements have been prepared by an ______________.
    accountant
  27. The basic accounting equation is Assets = Liabilities + __________  _______.
    Owners Equity (Stockholders Equity)
  28. The owner invests personal cash in the business assets __________ Liabilities ___________ Owners Equity ______________
    Increase, no effect, increase
  29. The owner withdraws business assets for personal use __________ Liabilities ___________ Owners Equity ______________
    decrease, no effect, decrease
  30. The company receives cash from a bank loan.  __________ Liabilities ___________ Owners Equity ______________
    Increase, Increase, No Effect
  31. The company repays the bank that had lent money to the company. Assets _______, Liabilities ________ OE __________-
    decrease, decrease, No Effect
  32. The company purchases equipment with its cash. Assets ________, Liabilities _________, OE___________
    increase, no effect, no effect
  33. The owner contributes her personal truck to the business. Assets __________, Liabilities ____________, OE____________
    Increase, No effect, increase
  34. The company purchases a significant amount of supplies on credit.  Assets _________, liabilities_______________, OE_______________
    increase, increase, no effect (owners equity will not decrease until the supplies are used)
  35. The company purchases land by paying half in cash and signing a note payable for the other half.  Assets_____________ , Liabilities______________, OE______________
    Increase, Increase, No Effect
  36. Company X provides consulting services to Client Q in May. Company X
    bills Client Q in May for the agreed upon amount of $5,000. The sales
    invoice shows that the amount will be due in June.   In May, Company X records the transaction by a debit to Accounts Receivable for $5,000 and a credit to Service Revenues for $5,000. What is the effect of this entry upon the accounting equation for Company X?
    Assets______, Liabilities_________, OE____________
    Increase, No Effect, Increase
  37. Company X provides consulting services to Client Q in May. Company X
    bills Client Q in May for the agreed upon amount of $5,000. The sales
    invoice shows that the amount will be due in June.In June, Company X receives the $5,000. What is the effect on the accounting equation and which accounts are affected at Company X?  Assets_______ , liabilities______, OE__________
    Cash Increases, Accounts Receivables Decreases,

    No Effect on Liabilities

    No Effect on OE
  38. In May, Company X records the transaction by a debit to Accounts Receivable for $5,000 and a credit to Service Revenues for $5,000. What is the effect of this entry upon the accounting equation for Company X?

    What is the effect on Client Q's accounting equation in May when Client Q records the transaction as a debit to Consultant Expense for $5,000 and a credit to Accounts Payable for $5,000?  Assets__________, Liabilities__________, OE___________
    No Effect, Increase, Decrease
  39. In May, Company X records the transaction by a debit to Accounts Receivable for $5,000 and a credit to Service Revenues for $5,000. What is the effect of this entry upon the accounting equation for Company X?  What is the effect on Client Q's accounting equation in June when Client Q remits the $5,000? Also, which accounts will be involved?  Assets __________, Liabilities____________  OE______________
    Decrease, Decrease, No effect
  40. Which of the following will cause owner's equity to increase?

    expenses
                
    owner draws
                
    revenues
    revenues
  41. Which of the following will cause owner's equity to decrease?

    net income
                
    net loss
                
    revenues
    net loss
  42. The accounting equation should remain in balance because every transaction affects how many accounts?

    only one
                
    only two
                
    two or more
    two or more
  43. A corporation's net income is eventually recorded in the following stockholders' equity account: ___________ ___________.
    Retained Earnings
  44. A corporation's quarterly _______________
    will cause a reduction in the corporation's retained earnings, which in
    turn reduces the corporation's stockholders' equity. However, this will
    not reduce the corporation's net income.
    dividends
  45. The financial statement with a structure that is similar to the accounting equation is the _____________  _____________.
    balance sheet
  46. The financial statement that reports the portion of change in owner's
    equity resulting from revenues and expenses during a specified time
    interval is the ____________  _______________.
    income statement

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