Accounting Principles C2

An account consists of

• one part.

• two parts.

• three parts.

• four parts.

The left side of an account is

• blank.

• a description of the account.

• the debit side.

• the balance of the account.

A debit to an asset account indicates

• an error.

• a credit was made to a liability account.

• a decrease in the asset.

• an increase in the asset.

The normal balance of any account is the

• left side.

• right side.

• side which increases that account.

• side which decreases that account.

The double-entry system requires that each transaction must be recorded

• in at least two different accounts.

• in two sets of books.

• in a journal and in a ledger.

• first as a revenue and then as an expense.

The usual sequence of steps in the transaction recording process is:

• journal > analyze > ledger.

• analyze > journal > ledger.

• journal > ledger > analyze.

• ledger > journal > analyze.

A credit to a liability account

• indicates an increase in the amount owed to creditors.

• indicates a decrease in the amount owed to creditors.

• is an error.

• must be accompanied by a debit to an asset account.

An accountant has debited an asset account for $1,400 and credited a liability account for $500. What can be done to complete the recording of the transaction?

• Nothing further must be done.

• Debit an owner's equity account for $900.

• Debit another asset account for $900.

• Credit a different asset account for $900.

MGolito purchased equipment for R$2,300 cash. As a result of this event,

• owner's equity decreased by R$2,300.

• total assets increased by R$2,300.

• total assets remained unchanged.

• owner's equity decreased and total assets increased by R$2,300.

On January 14, Bali Industries purchased supplies of R$9,000 on account. The entry to record the purchase will include

• a debit to Supplies and a credit to Accounts Payable.

• a debit to Supplies Expense and a credit to Accounts Receivable.

• a debit to Supplies and a credit to Cash.

• a debit to Accounts Receivable and a credit to Supplies.