ACC 200 Chapter 2 Flashcards

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Questions and Answers

The correct definition of an 'account' includes which of the following?

A summary of cash flows

A report of profits and losses

A record of increases and decreases in a specific asset, liability, equity, revenue, or expense item (correct)

A ledger of all financial transactions

The general ledger can be used to determine which of the following? (Select all answers which apply)

Which accounts are being used by a company and their balances at any given time (correct)

The amount of cash available

Common and unique accounts used by a business (correct)

Increases and decreases in all accounts in a business (correct)

Assets are claims (by creditors) against the company.

False

From the lists of items below, choose the one which includes only items that would be defined as cash.

Coins, checks, money orders Signup and view all the answers

Which of the following statements is (are) true about accounts receivables? (Check all that apply)

Accounts receivable reflects the amount still owed by customers. Signup and view all the answers

An account is a record of increases and ____ in a specific asset, liability, equity, revenue, or expense.

decreases Signup and view all the answers

Given the descriptions below, which is (are) true regarding notes receivable? (Check all that apply)

Another name for a note receivable is a promissory note. Signup and view all the answers

Which of the following describes a general ledger?

The general ledger is a record containing all accounts used by a company. Signup and view all the answers

Which of the following statements is the best definition of an asset?

Assets are resources owned or controlled by a company and that have expected future benefits. Signup and view all the answers

Which of the following items would be considered 'cash' and reflected in a company's Cash account? (Check all that apply)

Coins Signup and view all the answers

Accounts receivable are (increased/decreased) by credit sales and are (increased/decreased) by customer payments.

increased, decreased Signup and view all the answers

Notes receivable is considered a(n) (______/liability).

asset Signup and view all the answers

Which of the following statements is correct about prepaid accounts?

Prepaid accounts are also called prepaid expenses and are considered assets. Signup and view all the answers

Which of the following are examples of prepaid (expense) accounts? (Check all that apply)

Prepaid insurance Signup and view all the answers

When financial statements are prepared, unexpired prepaid accounts are recorded as (expenses/assets/liabilities) and the expired portion of the prepaid account is reported as a(n) (expense/asset/liability).

assets, expenses Signup and view all the answers

Which of the following statements are accurate regarding how to report or treat prepaid accounts? (Check all that apply)

The unexpired portion of prepaid accounts are treated as assets. Signup and view all the answers

Which of the following statements are accurate regarding supplies? (Check all that apply)

Unused supplies can be recorded as Store Supplies, Office Supplies, or Supplies. Signup and view all the answers

Select the statement below that best defines prepaid accounts.

Prepaid accounts are assets that represent prepayments of future expenses. Signup and view all the answers

Which of the following statements are accurate regarding equipment purchased within a business? (Check all that apply)

Equipment is reported on the left side of the accounting equation. Signup and view all the answers

When the product or service related to an unearned revenue is delivered, the earned portion of the unearned revenue is transferred to a _____ account.

revenue Signup and view all the answers

Dividends decrease equity. Which of the following statements is accurate regarding dividends?

Dividends decrease equity. Signup and view all the answers

Which of the following are examples of accrued liabilities? (Check all that apply)

Wages payable Signup and view all the answers

The Dividends account is used to record (investments/dividends/expenses/revenues) by the owner and has a (positive/negative) impact on equity.

dividends, negative Signup and view all the answers

The account title is shown at the top of a T-account.

The left side of a T-account is called the debit side. Signup and view all the answers

Accrued liabilities are amounts owed that are not paid.

True Signup and view all the answers

Study Notes

Accounts and Definitions

An account is a record of increases and decreases in specific items such as assets, liabilities, equity, revenue, or expenses.
Accounts receivable reflects amounts owed by customers and increases with credit sales.
Notes receivable is also known as a promissory note, classified as an asset, and represents a promise of payment at a future date.

General Ledger Insights

The general ledger contains all accounts used by a company, detailing their balances and changes over time.
It provides insights into which accounts are operational and any increases or decreases.

Assets and Cash

Assets are resources owned or controlled by a company that provide expected future benefits.
Cash includes coins, checks, and money orders, as well as funds available in a company's cash account.

Prepaid and Accrued Accounts

Prepaid accounts (or prepaid expenses) are considered assets and represent prepayments for future expenses. Unexpired portions are recorded as assets while expired portions are recognized as expenses.
Accrued liabilities indicate amounts due that have not been paid yet, such as interest payable, taxes payable, and wages payable.

Treatment of Supplies and Equipment

Supplies remain classified as assets until utilized, thereafter recorded as expenses; examples include store and office supplies.
Equipment is reported as an asset on the balance sheet and its cost is expensed over the useful life as it depreciates.

Dividends Impacts

Dividends decrease equity and are noted on the left side of the T-account, representing distributions of assets to owners.

T-account Functionality

T-accounts are tools used to visualize transaction effects, showing debit and credit sides; asset accounts increase on the left (debit) and liabilities increase on the right (credit).

Revenue Recognition and Unearned Revenue

When related products or services are delivered, earned portions of unearned revenue are transferred to revenue accounts, reflecting the fulfillment of obligations incurred by advance payments.

Key Terminology

Assets, Expenses, Liabilities, Equity, Debits, and Credits form the foundational terms for financial reporting and accounting practices.

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Description

Test your knowledge on key accounting concepts in ACC 200 Chapter 2 with these flashcards. Each card presents important definitions and examples relevant to financial accounts and ledger management. Perfect for reviewing core topics before exams.