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14 Cards in this Set
- Front
- Back
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Where are debits and credits located on an account?
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debits on the left, credits on the right
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What system supports that each transaction must affect two or more accounts to keep the basic accounting equation in balance?
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Double-Entry System
**DEBITS MUST EQUAL CREDITS** |
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If debits are greater than credits, the account will have a ____ balance and vice versa.
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debit
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What account has a normal debit balance?
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Assets
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What account has a normal credit balance?
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liabilities
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What acronym is used to express what accounts debits increase?
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Debits increase
Expenses Assets and Dividends *All other accounts have a normal credit balance |
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Debits:
a.)increase both assets and b.)liabilities. c.)decrease both assets and liabilities. c.)increase assets and decrease liabilities. d.)decrease assets and increase liabilities. |
c.)increase assets and decrease liabilities
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Accounts that normally have debit balances are:
a.)assets, expenses, and revenues. b.)assets, expenses, and equity. c.)assets, liabilities, and dividends. d.)assets, dividends, and expenses. |
d.)assets, dividends, and expenses
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How doe the Journal contribute to the recording process?
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-Discloses the complete effects of a transaction.
-Provides a chronological record of transactions. -Helps to prevent or locate errors because the debit and credit amounts can be easily compared. |
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What would be the transaction for the following action:
On September 1, stockholders’ invested $15,000 cash in the corporation in exchange for share of stock, and Softbyte purchased computer equipment for $7,000 cash. |
-Debit Cash, credit common stock
-debit cash, credit equipment |
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What contains the entire group of accounts maintained by a company?
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the general ledger
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What is the process of transferring amounts from the journal to the ledger accounts
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Posting
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Posting:
a.) normally occurs before journalizing. b.) transfers ledger transaction data to the journal. c.) is an optional step in the recording process. d.) transfers journal entries to ledger accounts. |
d.) Transfers journal entries to ledger accounts
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A trial balance will not balance if:
a.) a correct journal entry is posted twice. b.) the purchase of supplies on account is debited to Supplies and credited to Cash. c.) a $100 cash drawing by the owner is debited to Owner’s Drawing for $1,000 and credited to Cash for $100. d.) a $450 payment on account is debited to Accounts Payable for $45 and credited to Cash for $45. |
c.) a $100 cash drawing by the owner is debited to Owner's Drawing for $1,000 and credited to Cash for $100
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