Exam 2: Recording Business Transactions

A listing of all accounts in numerical order is called a(n) ________.

In a trial balance, total debits must always equal total credits.

A business has the following transactions: * The business received $16,000 cash and issued common stock to stockholders. * The business purchases $600 of office supplies on account. * The business purchases $3,000 of furniture on account. * The business renders services to various clients totaling $10,000 on account. * The business pays out $1,500 for salaries expense and $3,500 for rent expense. * The business pays $800 to supplier for the office supplies purchased earlier. * The business collects $4,000 from one of its clients for services rendered earlier in the month. At the end of the month, all journal entries are posted to the ledger. Accounts Payable will appear as which of the following?

A T-account is a summary device with credits posted on the left side of the vertical line.

For Office Supplies, the category of account and its normal balance is ________.

The trial balance is one of the three basic financial statements that are issued to external users of the business.

Which of the following journal entries would be recorded if a business purchased $800 of office supplies on account?

The T-account is a summary device that is shaped like a capital T with debits posted on the left side of the vertical line and credits posted on the right side of the vertical line.

Which of the following factors is assessed using the debt ratio?

A business prepays four months' office rent. Which of the following accounts is debited?

Revenues and contributions of the owner in the business increase equity.

Which one of the following account groups normally has a debit balance?

If the total debits equal the total credits on the trial balance, the individual account balances will be error free.

A business makes a payment in cash for advertising expense. Which of the following accounts is credited?

The owner withdrew cash from the business. Which of the following accounts is credited?

The T-account is a summary device that is shaped like a capital T with debits posted on the right side of the vertical line and credits posted on the left side of the vertical line.

Melody Instruments Company sells musical instruments. On December 31, 2017, after its first month of business, Melody Instruments had the following balances in its accounts, listed alphabetically. Determine the balance in the cash account and prepare the trial balance.