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Flashcards in Chapter Two Deck (27)
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1

What accounts are considered an asset?

Building
Accounts Receivable
Cash
Supplies

2

Forms of Cash

Coins
Checks
Money orders

3

Account Receivables

-Reflects the amount of money still owed by customers
-Is decreased when payments are received from credit customers
-Increased when credit sales are made
-Increased with a debit

4

Supplies are___until they are used. When they are used up, their costs are reported as____.

1) assets
2) expenses

5

Equipment purchased within a business:

-Reported on the balance sheet
-Left side of the accounting equation
-Initially recorded as an asset then gradually an expensed when it gets worn down

6

Land Account:

-Used to recored the costs of land purchased
-Increased on the left side of its T-account
-Is an asset

7

Liability

A claim by a creditor against the asset of a business

8

Creditor

An individual or organization that has a right to receive payments from a business

9

Accounts payable refer to obligations owed___the business and are classified as a(n)___ account.

1) by
2) liability

10

Accounts that cause equity to increase

Common stock and revenues

11

___=____+common stock+_____-_____-dividents

1) Assets
2) Liabilities
3)Revenues
4)Expenses

12

Common stock account

-Increased on the right side of the T-account
-Used to record the investments by the owners
-Is an equity account

13

Common stock account

when an owner invests in a business, the invested amount is recored in the Common stock account

14

Simon invests $10,000 in his new business, Simon's Sports. How would this affect the equity of a business?

Common stock would be increased, so equity is increased.

15

Myrtle Co. pays $50 to its shareholders. How would this affect the equity of a business?

Assets are decreased and equity is decreased.

16

The Dividends account is used to record___ to the owner and has a____ impact on equity.

1)Distributions
2) Negative

17

Revenues

Cause equity to increase, and they are increased on the right side of the T-account.

18

Examples of Revenues:

Sales
Fees earned
Service Revenue

19

Paul's Programming Services paid $100 in dividends to its stockholders. Show how to use a T-accounts to record this transaction.

Debit Dividends; Credit Cash

20

Accounts that are Examples of Expenses

Rent expense
Supplies expense

21

Equipment is a(n)____ account. It is reported on the ___ side of the accounting equation and is ___ when equipment is purchased.

1) Asset
2) Left
3) Increased

22

T-Account

-May be used as a tool to visualize the effects of a transaction
-Represents a ledger account
-Will show the debit or credit side of each transaction

23

T-Account left side

-Debit Side
-Asset accounts will be increased on the left side
-Prepaid Rend
-Note Receivable
-Accounts Receivable
-Equipment
-Land
-Prepaid Insurance
-Dividends

24

T-Account Right side

-Credit Side
-Liability accounts will be increased on the right side
-Common Stock
-Accounts Payable
-Interest Payable
-Unearned Revenue

25

To enter transactions on the right side of a T-account means you are ____ the account and will cause a(n)____ in a liability account.

1) Crediting
2) Increase

26

Has a normal credit balance

-Unearned consulting revenue
-Accounts payable
-Common Stock

27

The business earns $2,800 cash for services performed. How would this receipt affect the total equity of a business?

Revenues would be increased, so equity is increased.