ACG 4101 Chapter 2
The journal entry to record the purchase of supplies for cash involves: - answer a debit
to supplies and a credit to cash.
Supplies are an asset, so the balance increases with a debit. The supplies will not be
recorded as an expense until they are used. Cash is an asset, so the balance
decreases with a credit.
We can state the accounting equation for a corporation as: - answer A − L − SE = 0
The accounting equation is commonly shown as Assets (A) = Liabilities (L) +
Shareholders' Equity (SE). If we subtract L and SE from both sides, we get A − L − SE =
0.
For the year, a company reports revenues of $800,000, expenses of $600,000, and
dividends of $50,000. By how much will the balance of retained earnings increase for
the year? - answer$150,000
Revenues, expenses, and dividends are closed to retained earnings. The closing entry
for revenues includes an increase to retained earnings ($800,000), while the closing
entries for expenses and dividends include a decrease to retained earnings ($600,000
and $50,000, respectively).
The journal entry to record cash received from customers who previously were provided
services on account involves: - answera debit to cash and a credit to accounts
receivable.
Which of the following best describes the income statement? - answerA summary of the
profit-generating activities of a company that occurred during a particular reporting
period
Yummy Foods purchased a two-year fire and extended coverage insurance policy on
August 1, 2024, and charged the $3,000 premium to Insurance expense. At its
December 31, 2024, year-end, Yummy Foods would record which of the following
adjusting entries? - answerAccount Title Debit Credit
Prepaid insurance 2,375
Insurance expense 2,375
Unexpired at 12/31: $3,000 × 19 ÷ 24 = $2,37
The Esquire Clothing Company borrowed a sum of cash on October 1, 2024, and
signed a note payable. The annual interest rate was 12%. The company's December
The journal entry to record the purchase of supplies for cash involves: - answer a debit
to supplies and a credit to cash.
Supplies are an asset, so the balance increases with a debit. The supplies will not be
recorded as an expense until they are used. Cash is an asset, so the balance
decreases with a credit.
We can state the accounting equation for a corporation as: - answer A − L − SE = 0
The accounting equation is commonly shown as Assets (A) = Liabilities (L) +
Shareholders' Equity (SE). If we subtract L and SE from both sides, we get A − L − SE =
0.
For the year, a company reports revenues of $800,000, expenses of $600,000, and
dividends of $50,000. By how much will the balance of retained earnings increase for
the year? - answer$150,000
Revenues, expenses, and dividends are closed to retained earnings. The closing entry
for revenues includes an increase to retained earnings ($800,000), while the closing
entries for expenses and dividends include a decrease to retained earnings ($600,000
and $50,000, respectively).
The journal entry to record cash received from customers who previously were provided
services on account involves: - answera debit to cash and a credit to accounts
receivable.
Which of the following best describes the income statement? - answerA summary of the
profit-generating activities of a company that occurred during a particular reporting
period
Yummy Foods purchased a two-year fire and extended coverage insurance policy on
August 1, 2024, and charged the $3,000 premium to Insurance expense. At its
December 31, 2024, year-end, Yummy Foods would record which of the following
adjusting entries? - answerAccount Title Debit Credit
Prepaid insurance 2,375
Insurance expense 2,375
Unexpired at 12/31: $3,000 × 19 ÷ 24 = $2,37
The Esquire Clothing Company borrowed a sum of cash on October 1, 2024, and
signed a note payable. The annual interest rate was 12%. The company's December
