Information Systems Questions 1. What is the right side of an account called? 2. What is the left side of an account called? 3. An organizational scheme used to classify accounts as assets‚ liabilities‚ or owners’ equity is known as what? 4. What journal is used to record both the account(s) to be debited and the account(s) to be credited? 5. A collection of specific asset‚ liability and owners’ equity accounts in known as what? 6. What type of entry is made to adjust
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Chapter 3-1 The Accounting Information System Chapter 3-2 Financial Accounting‚ Fifth Edition Study Objectives 1. Analyze the effect of business transactions on the basic accounting equation. 2. Explain what an account is and how it helps in the recording process. 3. Define debits and credits and explain how they are used to record business transactions transactions. 4. Identify the basic steps in the recording process. 5. Explain what a journal is and
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By convention‚ assets are increased by entries on the left side of the account and are decreased by entries on the right side of the account. Entries to liability and stockholders’ equity accounts are handled in the reverse manner. They are increased by entries on the right side and are decreased by entries on the left side. These rules may be summarized as follows: • Assets are increased by entries on the left side. • Assets are decreased by entries on the right side. • Liabilities and Stockholders’
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Mune Company recorded journal entries for the declaration of $50‚000 of dividends‚ the $32‚000 increase in accounts receivable for services rendered‚ and the purchase of equipment for $21‚000. What net effect do these entries have on equity? Decrease of $18‚000. Maso Company recorded journal entries for the issuance of ordinary shares for $40‚000‚ the payment of $13‚000 on accounts payable‚ and the payment of salaries expense of $21‚000. What net effect do these entries have on equity? Increase of
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ACCT504 Midterm Exam Study Guide YOU MAY WANT TO PRINT THIS GUIDE. 1. The Midterm is open book and open notes. The maximum time you can spend in the exam is 2 hours‚ 30 minutes. If you have not clicked the Submit for Grading button by then‚ you will be exited from the exam automatically. In the exam environment‚ the Windows clipboard is disabled‚ so you will not be able to copy exam questions or answers to or from other applications. 2. You should click the Save Answers button in the exam frequently
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principle‚ matching principle‚ and time-period assumption; 10. know the computation net income under accrual accounting (revenues—expenses); 11. know the meaning and purpose of adjusting entries‚ and the different types of adjusting entries; 12. know the difference between periodic and perpetual inventory systems; 13. know how to calculate net cost of purchases when terms of payment look like‚ for example‚ 3/10 n/45; 14. know the components of cost of merchandise inventory (e.g.‚ invoice price
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all balances at the specific point in time. This is a good time to review all transactions and line totals. Step 5 is to adjust the entries. This would involve adjusting the amounts accordingly at the end of the time period; revenue and expense to assets and liabilities. Step 6 is the preparation of the adjusted trial balance. A review of the adjusting entries and the unadjusted trial balance is reviewed to verify that the information is correct and any errors can be revised. Step 7 is to
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due to creditors To record all credit sales made by the firm to record credit sales of goods made by the firm 1 2 5. Salaries paid to staff will be debited to (a) (c) Salary A/c Staff A/c (b) (d) Cash A/c Expense A/c 1 1 (b) (d) Secondary entry None of the above 1 Transactions None of the above 6. A ledger is called a book of :(a) (c) Primary
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record the transactions in; general journal‚ cash receipts journal‚ cash disbursements journal‚ purchases journal‚ sales journal‚ and other special journals. The journal entries are in the form of credits and debits entries to the correct accounts. After journalizing comes posting. Posting is usually done once a month. The journal entries are transferred to ledger accounts. There are four steps: post to debit account‚ enter debit account number‚ post to credit account‚ and enter credit account number
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purchased‚ which accounts should be debited and which credited at the end of the period in order to reflect the amount of supplies on hand? Exercise 4.1 – Identifying adjusting journal entries Required: Match the end-of-financial-year adjustments (for each independent situation) to the appropriate journal entry. Adjustments 1. Insurance expense which has not been used up (there is still future cover) 2. Portion of recognized revenue which is considered unearned 3. Revenue received in advance
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