Questions and Answers
Which of the following accounts have a normal debit balance?
Which of the following are DECREASED with a debit?
Transactions are originally recorded in a(n)
Journalizing a transaction means:
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Which of the following statements about expenses is CORRECT?
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For Accounts Payable, the classification of the account and its normal balance are:
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The process of transferring information from the journal to the ledger is called
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Which of the following is the correct order of steps to journalize an entry?
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The normal sequence of information in an accounting system is:
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A business person starts a company by giving the company $20,000 cash and receiving stock. How would you record the information for the business?
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A business buys $600 of supplies on account. How would you record the transaction?
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A company purchases a $100,000 building, makes a down payment of $15,000, and signs a note for the rest. How would you record the transaction?
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In the T-Account LEDGER, where would you find the ending balance of an account?
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ABC Company made a payment on account of $350. How would you record this transaction?
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ABC Company received a payment on account of $350. How would you record this transaction?
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Study Notes
Account Balances
- Accounts with a normal debit balance include Expenses and Assets.
- Liabilities and Revenues are decreased with a debit entry.
Transaction Recording
- Transactions are first recorded in a Journal before transferring them to the Ledger.
- Journalizing involves recording information through a journal entry.
Expenses
- Expenses decrease stockholders' equity; therefore, expenses have a normal debit balance.
Accounts Classification
- Accounts Payable is classified as a liability with a normal credit balance.
Posting Process
- The process of transferring entries from the journal to the ledger is known as Posting.
Journalization Steps
- Steps to journalize transactions: identify affected accounts, determine the increase or decrease, and then record the transaction.
Information Order
- The standard order in an accounting system is: Source document, Journal, Ledger.
Business Transactions
- When starting a company, a transaction involving $20,000 cash would be recorded as:
- Cash 20,000
- Common Stock 20,000
- Purchasing supplies on account worth $600 is recorded as:
- Supplies 600
- Accounts Payable 600
- Buying a building valued at $100,000 with a $15,000 down payment and the rest financed with a Note Payable is recorded as:
- Building 100,000
- Cash 15,000
- Note Payable 85,000
T-Account Ledger
- The ending balance of an account in a T-Account Ledger is found on the increase side of that account.
Payment Transactions
- Making a payment of $350 on account is recorded as:
- Accounts Payable 350
- Cash 350
- Receiving a payment on account of $350 is documented as:
- Cash 350
- Accounts Receivable 350
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Description
Test your understanding of normal debit balances and their implications in accounting with these flashcards from ACCT 2331 Chapter 2. Each card presents a question designed to reinforce key concepts related to assets, liabilities, and expenses.
