Accounting Chapter 2 Review

All of the following events at a sandwich shop are transactions except

• A customer purchases a sandwich shop

• A delivery of coffee beans purchased on account from the local roaster is received

• A representative from the local university contacts the manager of the shop to get a list of catering services

• The accountant for the sandwich shop pays the electric bill

Identify the asset from the following list of accounts:

• Notes Payable

• Common Stock

• Retained Earnings

• Inventory

Amounts owed to a company by its customer would be:

• Accounts Receivable

• Accounts Payable

• Inventory

• Prepaid Expenses

Thorpe Corporation purchases a new delivery truck and signs a note payable at the truck dealership for the total cost. The impact of this transaction on Thorpe Corporation

• increases assets and decreases stockholders' equity

• decreases assets and increases liabilities

• increases assets and increases liabilities

• increases assets and increases stockholders' equity

Adam Corporation issues stock to Cara Riley in exchange for $24,000 cash. The impact on Adam Corporation's assets from this transaction

• increases assets

• decreases assets

• does not have any impact on assets

• Not enough information is provided to determine the impact of assets

Blake Company completed a consulting job and billed the customer $5,000. The impact on Blake Company from this transaction

• increases assets and increases liabilities

• increases liabilities and decreases stockholders' equity

• decreases liabilities and increases stockholders' equity

• increases assets and increases stockholders' equity

Accounts Receivable will appear on which of the following financial statements?

• Income Statement

• Statement of Retained Earnings

• Balance Sheet

• Statement of Cash Flows

Accounts Payable had a normal beginning balance of $1,200. During the period, there were debit postings of $200 and credit postings of $800. What was the ending balance?

• $600 credit

• $1,800 debit

• $1,900 credit

• $600 debit

Which of the following debit and credit rules is correct?

• Increases in assets and liabilities are debited

• Increases in liabilities and stockholders' equity are debited

• Decreases in assets and liabilities are credited

• Increases in liabilities and stockholders' equity are credited

A company's beginning Cash balance was $8,000. At the end of the period, the balance was $6,000. If total cash paid out during the period was $28,000, the amount of cash receipts was

• $34,000

• $30,000

• $26,000

• $36,000