Chapter 2

Question 1

Record within an accounting system in which increases and decreases are entered & stored in a specific asset, liability, equity, revenue or expense.

Answer 1

ACCOUNT

Question 2

Difference between total debits and total credits (including the beginning balance) for an account.

Answer 2

ACCOUNT BALANCE or BALANCE

Question 3

Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.

Answer 3

BALANCE COLUMN ACCOUNT

Question 4

List of accounts used by a company; includes an identification number for each account.

Answer 4

CHART OF ACCOUNTS

Question 5

Journal entry that affects at least three accounts.

Answer 5

COMPOUND JOURNAL ENTRY

Question 6

Recorded on the right side; an entry that decreases asset and expense accounts, and increases liability, revenue, and most equity accounts; abbreviated Cr.

Answer 6

CREDIT

Question 7

Individuals or organizations entitled to receive payments.

Answer 7

CREDITORS

Question 8

Recorded on the left side; an entry that increases asset and expense accounts, and decreases liability, revenue, and most equity accounts; abbreviated Dr.

Answer 8

DEBIT

Question 9

Individuals or organizations that owe money.

Answer 9

DEBTORS

Question 10

Ratio of total liabilities to total assets; used to reflect risk associated with a company’s debts.

Answer 10

DEBT RATIO

= total liabilities / total assets

Question 11

Corporation’s distributions of assets to its owners.

Answer 11

DIVIDENDS

Question 12

Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.

Answer 12

DOUBLE-ENTRY ACCOUNTING

Question 13

All-purpose journal for recording debits and credits of transactions and events.

Answer 13

GENERAL JOURNAL

Question 14

Record containing all accounts (with amounts) for a business.

Answer 14

LEDGER or GENERAL LEDGER or BOOK OF FINAL ENTRY

Question 15

Record in which transactions are entered before they are posted to ledger accounts.

Answer 15

JOURNAL or BOOK OF ORIGINAL ENTRY

Question 16

Process of recording transactions in a journal.

Answer 16

JOURNALIZING

Question 17

A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.

Answer 17

POSTING REFERENCE (PR) COLUMN

Question 18

Process of transferring journal entry information tot he ledger; computerized systems automate this process.

Answer 18

POSTING.

Question 19

Source of information for accounting entries that can be in either paper or electronic form.

Answer 19

SOURCE DOCUMENTS or BUSINESS PAPERS

Question 20

Tool used to show the effects of transactions and events on individual accounts. Not a financial statement.

Answer 20

T-ACCOUNT

Question 21

List of accounts and their balances at a point in time; total debit balances equal total credit balances.

Answer 21

TRIAL BALANCE

Question 22

Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.

Answer 22

UNEARNED REVENUE

Question 23

Asset, liability or equity:
Cash Dividend

Identify the normal balance (Dr or Cr)

Answer 23

EQUITY

Dr

Question 24

Asset, liability or equity:
Office Equipment

Identify the normal balance (Dr or Cr)

Answer 24

ASSET

Dr

Question 25

Asset, liability or equity: Accounts Payable Identify the normal balance (Dr or Cr)

Answer 25

LIABILITY Cr

Question 26

Asset, liability or equity: Cash Identify the normal balance (Dr or Cr)

Answer 26

ASSET Dr

Question 27

Asset, liability or equity: Utilities Expense Identify the normal balance (Dr or Cr)

Answer 27

EQUITY Dr

Question 28

``` Asset, liability or equity: Office Supplies (bought in bulk) ``` Identify the normal balance (Dr or Cr)

Answer 28

ASSET Dr

Question 29

Asset, liability or equity: Prepaid Rent Identify the normal balance (Dr or Cr)

Answer 29

ASSET Dr

Question 30

Asset, liability or equity: Unearned Fees Identify the normal balance (Dr or Cr)

Answer 30

LIABILITY Cr

Question 31

Asset, liability or equity: Service Fees Earned Identify the normal balance (Dr or Cr)

Answer 31

EQUITY Cr

Question 32

Asset, liability or equity; Common Stock Identify the normal balance (Dr or Cr)

Answer 32

EQUITY Cr

Question 33

Balance sheet format where Assets are listed side-by-side with Liabilities.

Answer 33

ACCOUNT FORM

Question 34

Balance sheet format where Assets are listed above Liabilities.

Answer 34

REPORT FORM