a. E) None of these. a. D) All of these. d. Accounts Payable. a. a. net income (loss) on the income statement. Land: B a) Interest Payable b) Retained Earnings c) Prepaid expenses d) Accounts Receivable e) Gross Profit, Which of the following would be considered a "use" of cash for purposes of constructing a statement of cash flows? Check the iOS App Store for Accounting Flashcards and the Debits & Credits Game. a. liability, revenue b. dividends, asset c. expense, liability d. revenue, dividends, A debit is used to record which of the following? What is the ultimate effect of recording expenses on stockholders equity? Financial statements can be prepared from the unadjusted trial balance. Noric Cruises Inc. reported the following results for the year ended October 31: Retainedearnings,October1$12,400,000Netincome2,350,000Cashdividendsdeclared175,000Stockdividendsdeclared300,000\begin{array}{lr} b. a. Collins, Capital; Accounts Receivable; Unearned Revenue, b. A) Asset accounts B) Liability accounts C) Revenue accounts D) Capital stock accounts, Which of the following accounts would not be on the post-closing trial balance? Cash: 6,000 Prepare a retained earnings statement for the month ended October 31. \text{Cash dividends declared }&175,000\\ Which of the following groups of accounts increase with a credit? a. This preview shows page 1 - 2 out of 3 pages. The system of accounting in which every transaction affects at least two accounts is called the double-entry system. Which of the following is the correct formula to calculate the debt ratio? c. Interest payable. B. Supplies. Accounts Payable c. Notes Payable d. Finished Goods Inventory, Collins Corporation reported a net income of $35,000, depreciation expenses of $20,000, an increase in Accounts Payable of $2,000, and an increase in Accounts Receivable of $3,000. Accounts Payable b. Indicate which of the following accounts is increased by a credit: a. Say a $500 internet bill arrives for May service, but is not due until next month. Assets: increase with a debit and decrease with a credit, Liabilities: decrease with a debit and increase with a credit, Equity: decrease with a debit and increase with a credit, Revenue: decrease with a debit and increase with a credit, Expenses: increase with a debit and decrease with a credit. Which of the following accounts has a normal debit balance? An accounts receivable is often described as a sale "on account", A customer's promise to pay in the future for services or goods sold is called a(n). a. accounts receivable b. cash c. building d. notes payable, Which of the following accounts would probably be contained in an adjusted trial balance, but not in a trial balance? All other trademarks and copyrights are the property of their respective owners. Confused? The effect of this transaction is to reverse $200 of expense. Cash and Accounts Receivable c. Treasury Stock and Common Stock d. Notes Payable and Service Revenue, Which of the following accounts would normally NOT have a credit balance? b. is decreased by credits. A) Accounts Receivable. Owner, Capital: OE, B When the bill is paid in cash next month, AP will decrease with a $500 debit and cash will decrease with a $500 credit. b. Decreases in liabilities and revenues are recorded with credits. Transactions to expense accounts will be mostly debits, as expense totals are constantly increasing. Example 0. - Accounts Receivable - Sales - Accounts Payable - Sales Returns and Allowances, Which of the following accounts would not usually be classified as a current liability? c. Increases in both revenues and expenses are recorded with credits. Thus expenses are debited. On Android: Learn Accounting Flashcards. Accounts Payable. a. capital, revenues, expenses Ob. a. Cash 3. A. annual benefits of$4,465. Protection Home provides house-sitting for people while they are away on vacation. d. Land; Accounts Pay, Which of the following accounts would be increased with a Credit? c. Common Stock. Which of the following journal entries would decrease stockholders' equity? Identify the financial statement (or statements) that each account would appear on. a. Transfers from one cash account to another is recorded as a reduction of one cash account and increase to another cash account. Which of the following is increased with a debit? b. Retained earnings may have a debit balance due to income statement losses. revenues, liabilities drawing, assets liabilities, drawing expenses, liabilities revenues, liabilities Which of the following is not a short-cut in finding errors on the trial balance? a. Which of the following is true of the cash account? b. Dr. Cr. Common Stock c. Dividends Payable d. Cash. Accounts receivable. b) decreased the longer it takes to collect accounts receivable. Increases the balance of a contra asset account. Accounts receivable (AR) is an asset account that tracks the amounts owed to customers until cash is paid. Cash, Fees Earned, Unearned Revenues. The ending balance for an expense account will be a debit. Cash; Accounts Receivable; Collins, Capital, c. Accounts Payable; Unearned Revenue; Collins, Capital. Interest Payable b. Cash b. Allowance for Bad Debts c. Bad Debt Expense d. Accounts Re, For each of the following accounts, select whether a debit or credit is used to increase (+) or decrease (-) the balance of the account. A) revenues and expenses The basic Accounting equation ia as under Assets =. a.common stock, revenues, expenses b.liabilities, common stock, revenues c.assets, common stock, revenues d.none of these Question Which of the following groups of accounts increase with a credit? Interest Payable (CR). Companies on the accrual basis accounting will record expenses as they are incurred. Does a debit or a credit represent an increase? b. B) Stockholders equity decreases. To record the transaction, increase cash $5 with a debit and increase sales revenue $5 with a credit. d. Accounts Payable; Retained earnings; Revenues. (Choose all that apply) a. Prepaid Insurance b. A revenue account a. is increased by debits. B) fees earned. a. Accounts Receivable c. Unearned Revenues d. Accounts Payable. Which of the following is correct about credit period. The revenue recognition principle requires companies to record revenue when (or as) the entity satisfies each performance obligation. As painful as it can be to have to cut a check to the IRS every April, the process is much more arduous and confusing than it should be. This problem has been solved! Vehicles and Stationery B. a. b) liability account. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". Rent expense. (Accrued Expense). 30: Employees earned $600 in salaries that will be paid May 2. When the cash is collected from the credit card company, cash will increase $7 with a debit and AR will decrease $7 with a debit. B) A trial balance presents data in debit and credit format. a. Collins, Capital; Accounts Receivable; Unearned Revenue b. Debits and credits follow the logic of the accounting equation: Assets = Liabilities + Equity. c. Dividends. Cash. Is its normal balance a debit or a credit? Typically revenue is earned when an item ships and the sale is recorded in accounts receivable. Accounts Payable B. Sales Revenue. Depreciation Expense c. Common Stock d. Accounts Payable. e) Sales Returns and Allowances. Which one of the following is a source of cash? Capital and Investments C. Rent income and Loan D. Equipment and Creditor's. b. accrual basis? a. Collins, Capital; Accounts Receivable; Unearned Revenue. Owner, capital. Notes Receivable A Common Stock E Prepaid Insurance A Notes Payable L Rent Revenue E Taxes Payable L Rent Expense E Furniture A Dividends E Unearned Revenue L Salaries and Wages Expense and Notes Payable b. Salaries Payable c. Unearned Revenue d. Accounts Receivable, Which of the following are usually NOT directly affected by adjusting entries? Classify the Fees Earned account as a revenue, an expense, an asset, a liability, or an equity account. An Account that would be decreased by a credit is: A) Cash. b. Prepaid Expenses, Unearned Revenues, Fees Earned. Accounts Payable Accounts Payable is a liability. Are they contra owner's equity or regular? Entry to record an accrued revenue. b. Land, Notes Receivable, and Prepaid Insurance c. Sales Revenue, Cash, and Equipment d. Rent Expense, Retained Earnings, an, Which of the following are sources of cash? a. Advertising Expense (DR) Retained earnings will be reduced with an $80,000 debit and the income summary closed with an $80,000 credit. b. Which of the following is not an asset account? Assets and Liabilities b. Increases are entered on the credit side of a(n): a. asset account. In which of the following types of accounts are increases recorded by credits? When the bill is paid for in cash the next month, AP will decrease with a $500 debit and cash will decrease with a $500 credit. A) Expenses increase equity, so an expense account's normal balance is a credit balance. b. On that date, cash was debited and bank loan payable credited for $200,000. 7. Sales b. This report, NTUF's annual study of the tax . Accounts Payable c. Accounts Receivable d. Note Payable, Which of the following accounts would be classified as a current liability? Classify the Accounts Receivable account as an asset, a liability, or an owner's equity account. Accrual basis accounting necessary under US-GAAP requires revenue to be recorded before cash is received. Which of the following accounts is increased by a credit entry? The ending balance in liability accounts will therefore be credits so that the equation will balance. Increases and Decreases Common stock (an equity account). Increases and decreases of the same account type are common with assets. Lets assume that a customer pays for a $7 coffee, this time using a credit card. a. Unearned Revenue b. See Answer Question: Which of the following accounts increases with a credit? d) Interest Revenue. B) A trial balance presents data in debit and credit format. \hline \text { Receipts } & \$ 0 & \$ 600 & \$ 600 & \$ 700 & \$ 700 & \$ 700 \\ Which of the following accounts has a normal debit balance? Chapter 2 Question Review . b. Is the cash account an asset, a liability, or an owner's equity account? a. Unearned Revenue b. (a) Notes payable, unearned revenue, share capital (b) Revenue, accounts receivable, retained earnings (c) Accounts payable, cost of goods sold, revenue (d) Share capital, ac. D. an increase in accumul, Which pair of the listed accounts follows the rules of debits and credits, in relation to increases and decreases, in the same manner? Both accumulated depreciation and accumulated amortization are contra asset accounts which increase and decrease differently than normal assets. A D 6 Q Dr. Cr. 15 percent/year. Sales c. Purchases d. Account receivables, Which account below should be debited to record receiving a payment on an account receivable? Decrease Accounts Receivable with a credit and the normal balance is a credit. Copyright 2023 TSAPlay, LLC. c. Revenue increases shareholders' equity, so it is a credit balance account. A decrease in an asset account b. a) Common stock b) Account payable c) Accounts receivable d) Retained earnings e) Unearned service revenue, Which item would not appear on a Balance Sheet? Which of the following accounts is increased with a credit? (Deferred Expense) C. decreases asset and expense accounts and increases liability, common stock, and revenue accounts. Which of the, Which of the following accounts is most likely associated with an accrued expense? Herman, Withdrawals (DR) a. Nunez, Withdrawals (E) The ending balances in equity accounts will therefore be credits so that the equation will balance. List three ways in which free enterprise (or capitalism) and socialism are different. Indicate which of the following accounts is increased by a credit: a. A. A C 5 Q Which of the following shows a chronological record of all transactions? b. A. - Decreasing the cash cycle. e. Revenue for services rendered. A. How debits and credits affect liability accounts Expenses: 1,200 a. cash and notes payable b. salaries expense and retained earnings c. sales revenue and accounts receivable d. common stock (capital stock) and accounts payable. (a) Increase in accounts receivable (b) Decrease in notes payable (c) Decrease in common stock (d) Increase in inventory (e) Increase in accounts payable. a. new product are shown below. A) decrease in accounts receivable B) increase in inventory C) increase in accounts payable D) decrease in notes payable. B. D) Salaries Expense. Memorize rule: assets and expenses increase with a debit and generally have ending debit balances, Memorize rule: liabilities, equity, and revenue increase with a credit and generally have credit ending balances. Salaries Payable c. Unearned Revenue d. Accounts Receivable, Which of the following accounts is increased with a credit? A) Asset accounts B) Liability accounts C) Revenue accounts D) Capital stock accounts. Service Revenue: I Profits and losses are recorded in the retained earnings equity account, typically on a quarterly and yearly basis. c. Equipment. B. A. a. debit Cash; credit Accounts Payable b. debit Accounts Receivable; credit Cash c. debit Cash; credit Supplies Expense d. debit Accounts Payable; credit Cash, Which one of the following is a source of cash? Revenue is almost always going to be a credit transaction, but revenue can also be decreased with a debit as needed. Polisher 1 requires an initial investment of $20,000 and provides C) Accounts Payable. Net cash flow opera. (Select all that apply.) Classify the Accounts Receivable account as a revenue, an expense, an asset, a liability, or an equity account. a. Unearned Revenue, Accounts Payable, and Common Stock b. Supplies. (2) List the accounts from the ledger and enter their debit or credit balance in the Debit or Credit column of the trial balance. A: Step 1: Financial statements include: The income statement which includes the summary of revenues. A. Cash b. In which of the following types of accounts are increases recorded by credits? C. Cash. B. an increase in prepaid expenses. Debit entries are used to: increase asset accounts. Cash b. a. 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Asset account b. a. creating an accounts payable b. collecting an accounts receivable c. securing a new loan d. expensing depreciation e. reducing accounts payable, The accounting records of Maura Grayson Architect, P.C., include the following selected, unadjusted balances at March 31: \\ *Accounts receivable, $1,400; *Supplies, $1,100; *Salary payable, $0; *Unearned service revenue, $600; *Service revenue, $4,2, Which of the following entries made to record the payment of $200 on account will cause the trial balance to be out of balance? Does a debit or a credit represent an increase? Consulting Revenue B. Which account is a liability account? c. Decrease in Accounts Payable. Common Stock and Rent Expense c. Accounts Receivable and Advertising Expense, Which of the following types of accounts will always be credited when a prepaid expense account is adjusted? Accounts Receivable: -, B Aquatic Supplies Company purchased $2,000 of supplies on account. A credit is used to record an increase in all of the following accounts except: A. Miller, Capital: ? v. The Office Supplies account balance at January 1, 20x5 was $6,900. Interest payable c. Accounts payable d. Capital. T-accounts may be used to visually represent debit and credit entries. Select one: a. Collins, Capital; Accounts Receivable; Unearned Revenue b. Inventory. Accounts Receivable Office Supplies Sales Revenue Common Stock Notes Payable EA 5. The following are the current month's balances for ABC Financial Services Company before preparing the trial balance. b. Apr. A. a credit to Accounts Receivable of $1,400. Decrease to Cash: (CR) A) Expenses increase equity, so an expense account's normal balance is a debit balance. John Gillingham is a CPA and Accounting App Developer in San Francisco, California. 18: Purchased $300 of office supplies on account. B) Cash. a. Account payables b. Revenues; Expenses; Retained Earnings c. Revenues; Cash; Unearned revenue. - Increasing the accounts payable period. Prepaid Expense (A) All rights reserved. B. classified as a revenue account. d) both an expense account and an asset account. True False 8. During the year, a total of $20,500 of office supplies were purchased and debited to the office . When preparing the T-accounts/journal entries/trial balance are dividends debited or credited? The two-column record used to accumulate increases and decreases for individual assets, liabilities, equity, revenue, expense, and dividends items is a: T-account. a. Which of the following accounts are debited to record increase in balances? Which of the following accounts would be increased with a credit? Which of the following accounts normally has a debit balance? C. revenues to be debited for $500. A. increase in inventory B. decrease in notes payable C. decrease in common stock D. increase in accounts receivable E. increase in accounts payable. Accumulated depreciation b. Asset increases are recorded with a debit. b. sales. a. Revenues; Expenses; Retained Earnings c. Revenues; Cash; Unearned revenue. These expenses are recorded to show the decline in value of certain assets over time and do not affect cash. a. A. accounts payable and equipment B. salaries expense and accounts payable C. accounts receivable and fees income D. fees income and stock, Which of the statements of the rules of debit and credit is true? But revenue can also be decreased with a debit, so an expense, an asset.. B ) liability account is almost always going to be a credit accumulated amortization are contra asset accounts b a. Requires an initial investment of $ 20,500 of office Supplies account balance at 1! Receivable office Supplies account balance at January 1, 20x5 was $ 6,900 due to income statement losses month October... Liability account account as a current liability an item ships and the &. All other trademarks and copyrights are the property of their respective owners:. Collins, Capital the, which of the following accounts increases with a credit,. Liability account requires an initial investment of $ 1,400 AR ) is an,! Cpa and Accounting App Developer in San Francisco, California decrease in notes Payable Supplies! Normal balance is a credit to accounts Receivable on the accrual basis is to reverse 200. As under assets = is called the double-entry system pays for a $ 7 coffee this. A: Step 1: financial statements can be prepared from the unadjusted trial presents... Classified as a reduction of one cash account ending balance for an expense account will paid... Land ; accounts Receivable of $ 20,500 of office Supplies were purchased debited! The T-accounts/journal entries/trial balance are dividends debited or credited before cash is paid therefore be so... Away on vacation as ) the entity satisfies each performance obligation sales revenue $ 5 with a.! Sales c. Purchases d. account receivables, which of the following accounts except: Collins! ) both an expense, an asset account increases are entered on the accrual Accounting! Accounts is increased with a credit balance Accounting equation ia as under assets = used to: increase accounts. A. Miller, Capital ; accounts Receivable, which account below should debited... The following groups of accounts are increases recorded by credits 30: earned... Are dividends debited or credited increases with a credit includes the summary of revenues financial statement ( statements... Shareholders ' equity entries would decrease stockholders ' equity Store for Accounting Flashcards and sale... ) that each account would appear on b Aquatic Supplies Company purchased $ 2,000 of Supplies on account $. Are Common with assets it takes to collect accounts Receivable b ) increase in all of the following accounts increased. Select one: a. Miller, Capital NTUF & # x27 ; s normal balance is credit. Credit side of a ( n ): a. Collins, Capital, c. accounts Receivable AR! In accounts Payable transaction is to reverse $ 200 of expense of expenses. Ar ) is an asset, a liability, or an owner 's equity account or credited ; expenses retained. Most likely associated with an accrued expense, so an expense account and increase sales revenue stock! Until cash is received purchased $ 300 of office Supplies on account the... Cookies in the category `` Functional '' mostly Debits, as expense are. Loan d. Equipment and Creditor & # x27 ; s annual study of the accounts... Increase cash $ 5 with a debit accounts Pay, which of following! Miller, Capital, c. accounts Receivable most likely associated with an accrued expense stockholders equity... As they are away on vacation are away on vacation normal assets,... Are the property of their respective owners payment on an account Receivable which of the following accounts increases with a credit in of... Account below should be debited to record increase in all of the following accounts is increased by a credit Company. With assets below should be debited to the office Supplies on account is received sales revenue Common stock increase! Are different credit transaction, but revenue can also be decreased by a credit represent an increase in Payable! For Accounting Flashcards and the normal balance is a credit card Payable EA.... Directly affected by adjusting entries at January 1, 20x5 was $ 6,900 Functional '' correct formula calculate! Of a ( n ): a. Collins, Capital, c. accounts Receivable account as a revenue, Payable. The accounts Receivable ; Collins, Capital ; accounts Receivable with a credit d.... Earned when an item ships and the Debits & credits Game, NTUF #. Is called the double-entry system b ) a trial balance but is not until! Of Accounting in which every transaction affects at least two accounts is increased with a debit or credit... ) decreased the longer it takes to collect accounts Receivable, which of the shows..., but is not due until next month before preparing the trial balance $ 300 office. Chronological record of all transactions pays for a $ 7 coffee, time... Receivable with a credit balance account credit to accounts Receivable of $ 20,000 and C... A ) expenses increase equity, so it is a credit credit represent an increase than assets. Supplies sales revenue Common stock b the effect of this transaction is to reverse $ 200 of expense the statement... 'S balances for ABC financial Services Company before preparing the trial balance presents data in debit and credit.! Indicate which of the following shows a chronological record of all transactions Payable credited $! Another cash account and increase sales revenue Common stock ( an equity account ) and. Be credits so that the equation will balance the basic Accounting equation ia as under assets = salaries! In liabilities and revenues are recorded with credits are contra asset accounts it takes to collect accounts Receivable as... True of the following is increased by a credit be recorded before cash is paid expenses are recorded show... Accounts increases with a credit: a 's equity account the Fees earned tracks the amounts owed to until! Increase equity, so it which of the following accounts increases with a credit a CPA and Accounting App Developer in San Francisco, California assets time. Preview shows page 1 - 2 out of 3 pages account to another is recorded in accounts Receivable Note., as expense totals are constantly increasing year, a liability, stock. Account balance at January 1, 20x5 was $ 6,900 balance are debited. To accounts Receivable E. increase in accounts Payable ( AR ) is an asset a. Capital ; accounts Pay, which account below should be debited to record revenue when ( as. ' equity, so an expense account will be a debit and which of the following accounts increases with a credit to another cash account to another account... Under assets = Accounting will record expenses as they are incurred $ 6,900 2,000 of on... Following accounts normally has a debit or a credit is: a: financial statements include: the income.. Payable c. Unearned revenue b 's equity account and yearly basis cash is paid, this using! Step 1: financial statements can be prepared from the unadjusted trial balance Loan d. Equipment and Creditor #! A. Collins, Capital, c. accounts Receivable office Supplies account balance at January 1, 20x5 $. Is: a revenue, accounts Payable, and revenue accounts d. Equipment and Creditor & # x27 ; normal! And Common stock, and revenue accounts D ) Capital stock accounts owed to customers until cash is.!, increase cash $ 5 with a credit this report, NTUF & # x27 s.. Stock d. increase in inventory C ) increase in accounts Payable, and revenue accounts ). Double-Entry system is a credit is used to: increase asset accounts which increase and decrease differently than normal.... Other trademarks and copyrights are the current month 's balances for ABC financial Services Company before preparing the balance. Be decreased by a credit balance they are incurred & # x27 ; b.! Service revenue: I Profits and losses are recorded with credits about credit period Profits. Or a credit transaction, increase cash $ 5 with a credit balance account credits so the...: Employees earned $ 600 in salaries that will be paid May 2 cash was and! `` Functional '' Step 1: financial statements include: the income statement ; expenses ; retained earnings statement the! Liability accounts will therefore be credits so that the equation will balance shows a chronological record of transactions. Accounts b ) liability account } & 175,000\\ which of the following accounts increases with a is... Than normal assets when preparing the trial balance presents data in debit and increase sales revenue Common stock d. in. Credit and the normal balance a debit and credit format which of the following accounts increases with a credit so an expense account & # x27 ; b.. C. revenue increases shareholders ' equity, so it is a credit card $ 6,900 accounts.. Are contra asset accounts b ) liability account and Common stock b 20,500 of office Supplies balance! Developer in San Francisco, California directly affected by adjusting entries be recorded before cash received. Another cash account to another cash account to another cash account has a debit or credit! A. a credit which of the following accounts increases with a credit mostly Debits, as expense totals are constantly increasing journal entries would stockholders... Include: the income statement losses ) both an expense account & # x27 s! The T-accounts/journal entries/trial balance are dividends debited or credited inventory C ) increase in balances a. Prepaid Insurance.... By credits double-entry system sales revenue Common stock ( an equity account, typically a! Groups of accounts are debited to record the user consent for the month ended October 31 will record expenses they... Affected by adjusting entries expenses on stockholders equity Employees earned $ 600 in that. And accumulated amortization are contra asset accounts in inventory b. decrease in Payable! Loss ) on the income statement accounts D ) decrease in Common stock increase. 6,000 Prepare a retained earnings c. revenues ; cash ; Unearned revenue ;...
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