Exam 2: Analyzing Business Transactions

Which of the following bookkeeping techniques generally is not acceptable?

An increase in revenue is recorded with a credit.

Another word for expense is debt.

The cost principle is a solution to the recognition issue.

Which of the following accounts has a normal credit balance?

A basic storage unit for accounting data is the account.

In a financial report,a double line is placed below the final total(s).

By what amount,if any,would each of the following errors cause a trial balance to be out of balance? a. A purchase of supplies of $840 was recorded as a debit to Equipment and a credit to Cash for $840. b. An $890 balance in Prepaid Insurance was copied to the trial balance as a debit of $980. c. A $600 balance in Accounts Payable was copied to the trial balance as a debit of $600.

Retained Earnings has a normal debit balance.

The general journal does not have a column titled

Expenses should be recorded when they are paid,not when they have been incurred.

The account most recently posted is determined most efficiently by referring to the

Post the following transaction.

Discuss the difference between business events that are transactions and those that are not.Why is the distinction important?

To find an explanation of a transaction,one should look at the

For each item below,indicate whether a debit or a credit applies. a. Decrease in Accounts Payable b. Decrease in Land c. Increase in Retained Earnings d. Increase in Unearned Revenue e. Decrease in Interest Payable f. Increase in Prepaid Insurance g. Increase in Wages Expense h. Decrease in Art Supplies i. Increase in Advertising Fees Earned

Which of the following accounts is not a stockholders' equity account?

The journal is a chronological record of all transactions.

The cost principle relates most closely to the

Which of the following accounts is classified differently from the others listed?