Accounting Chapter 2

Purchasing land with a note would have what impact on the accounting equation?

• Increase liabilities, increase owners equity

• Increase assets, increase owners equity

• Increase liabilities, increase assets

• Decrease assets, increase liabilities

A debit is used to increase which of the following accounts?

• Accounts Payable.

• Common Stock.

• Service Revenue.

• Utilities Expense.

Below are four out of the six steps in the measurement process, put them in the correct order:

• Analyze impact of transaction on A=L+SE

• Assess whether the transaction results in a debit or credit to the account

• post the transaction to the general ledger

• prepare a trial balance

True or false: A debit to an account balance always results in the balance increasing.

• True

• False

The full set of procedures used to accomplish the measurement/communication process of accounting is referred to as the:

• General ledger.

• Accounting cycle.

• Chart of accounts.

• Trial balance.

A(n) __________ summarizes all transactions related to a particular item over a period of time.

• Debit

• Chart of accounts

• Source document

• Account

When a company pays employees' salaries for the current period, how will the basic accounting equation be affected?

• Stockholders' equity decreases

• Expenses decrease

• Liabilities decrease

• Revenues decrease

Receiving cash from customers before services are performed affects which of the following accounts?

• Accounts Receivable

• Deferred Revenues

• Prepaid Assets

• Service Revenue

Receiving cash from an account receivable:

• Increases revenue and decreases an asset.

• Decreases a liability and increases an asset.

• Increases an asset and increases revenue.

• Increases one asset and decreases another asset.

Providing services to customers on account causes assets to increase and stockholders' equity to increase.

• True

• False