Flashcards in Chapter Two Deck (27)
What accounts are considered an asset?
Forms of Cash
-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
Supplies are___until they are used. When they are used up, their costs are reported as____.
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
-Used to recored the costs of land purchased
-Increased on the left side of its T-account
-Is an asset
A claim by a creditor against the asset of a business
An individual or organization that has a right to receive payments from a business
Accounts payable refer to obligations owed___the business and are classified as a(n)___ account.
Accounts that cause equity to increase
Common stock and revenues
Common stock account
-Increased on the right side of the T-account
-Used to record the investments by the owners
-Is an equity account
Common stock account
when an owner invests in a business, the invested amount is recored in the Common stock account
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.
Myrtle Co. pays $50 to its shareholders. How would this affect the equity of a business?
Assets are decreased and equity is decreased.
The Dividends account is used to record___ to the owner and has a____ impact on equity.
Cause equity to increase, and they are increased on the right side of the T-account.
Examples of Revenues:
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
Accounts that are Examples of Expenses
Equipment is a(n)____ account. It is reported on the ___ side of the accounting equation and is ___ when equipment is purchased.
-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
T-Account left side
-Asset accounts will be increased on the left side
T-Account Right side
-Liability accounts will be increased on the right side
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.
Has a normal credit balance
-Unearned consulting revenue