Chapter 2 - Accounting

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An investment of cash into the business will

Increase stockholders equity

Purchasing a computer on account will

Increase total assets, total liabilities, and have no effect on stockholders' equity. (All of the above)

Performing service on account will

Increase total assets and stockholders equity (Both a and b)

Receiving cash from a customer on account will

have no effect on total assets

Purchasing a computer equipment for cash will

have no effect on total assets, total liabilities, or stockholders equity

Purchasing a building for $100,000

Increase both total assets and total liabilities by $80,000

What is the effect on total assets and stockholders equity of paying the electric bill as soon as it is received each month

Decrease on total assets and stockholders equity

Which of the following transactions will increase an asset and liability

Buying equipment on account

Will increase an asset and increase stockholders equity

performing a service on account for a customer

Where do we first record a transaction

Journal

Which of the following is not an asset account

None of the above is an asset

Which statement is false

Dividends are increased by credits

The journal entry to record the receipt of land and a building and issuance of common stock

Debits land and building and credit common stock

The journal entry to record the purchase of supplies on account

Debits supplies and credits accounts payable

If the credit to record the purchase of supplies on account is not posted

Liabilities will be understated

The journal entry to record a payment on account will

Debits accounts payable and credit cash

If the credit to record the payment of an account payable is not posted

cash will be overstated

Which statement is false

A trial balance is the same as a balance sheet

A business's purchase of a $100,000 building with an $85,000 mortgage

Increase stockholders equity by $15,000

Martex, inc. , a new company

$87,000

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