EPPD 1033 Topic 2

The Chart of Accounts is:

• a listing of all open accounts and their balances.

• expected to be in balance at all times.

• a listing of all accounts used to record the business transactions.

• not necessary to record transactions.

Which of the following account titles have a normal debit balance?

• Equipment

• Accounts Payable

• Retained Earnings

• Service Revenue

The XYZ Company purchase supplies for $5,000 on account.  The entry to record this transaction is:

• Dr Cash     5,000

  Cr Supplies 5,000

• Dr Supplies     5,000

  Cr Account Payable 5,000

• Dr Supplies     5,000

  Cr Account Receivable 5,000

• Dr Supplies     5,000

  Cr Cash 5,000

An account is:

• a record of all changes in an asset, liability or shareholder’s equity during a period.

• an event that has an economic impact on the business.

• always expected to have a debit balance.

• none of the above.

The double entry accounting process:

• A - requires that every transaction effect at least two accounts.

• B - mandates that the dollar sum of the debits equal that of the credits for each transaction.

• neither A or B

• both A and B

Posting is the process of:

• transferring the data from the ledger to the journal.

• transferring the data from the journal to the ledger.

• transferring the information from the trial balance to the balance sheet.

• recording the data in the journal.

In recording a transaction in the journal:           

• the debits are recorded prior to the credits.

• the credits are recorded prior to the debits.

• there is no need to know the debit and credit rules.

• it is not necessary to record accounts with normal debit balances.

Revenue:

• is the increase in liabilities as a result of providing a good or service.

• is the same as cash.

• has the same normal balance as all asset accounts.

• is the increase in shareholder’s equity as a result of providing a good or service.

Each of the following is an expense except:

• Cost of Goods Sold.

• Accounts Receivable.

• Utilities Expense.

• Salaries Expense.