The Accounting Equation
This term represents the owner's claim to the assets of the business
What is Equity
This side of a T-account increases assets
What is the debit side?
You purchased $300 of supplies on account. Name the two accounts used.
What are Supplies and Accounts Payable?
This type of adjustment records revenue earned but not yet received.
What is accrued revenue?
This statement reports revenues and expenses.
What is the Income Statement?
If assets are $50,000 and liabilities are $18,000, this is the amount of equity.
What is $32,000?
This account increases with a credit: Cash, Accounts Payable, or Rent Expense?
What is Accounts Payable?
You performed services for $2,000 cash. What is the journal entry?
Debit Cash, credit Service Revenue.
This account is used when prepaid rent has been used up.
What is Rent Expense?
This statement reports assets, liabilities and equity
What is the Balance Sheet
This account increases equity when the business earns revenue.
What is Service Revenue?
Service Revenue has this normal balance.
What is a credit?
You paid employees $4,800. What is the journal entry?
Debit Salaries Expense, credit Cash.
Supplies on hand decreased from $500 to $100. What is the adjusting entry?
Debit Supplies Expense $400, credit Supplies $400.
This statement is provided for a period of time.
What is the Income Statement?
This type of transaction increases both assets and liabilities at the same time.
What is purchasing on account?
To record paying $500 cash for utilities, this account is debited.
What is Utilities Expense?
You received a bill for $100 utilities but haven’t paid it yet.
Debit Utilities Expense, credit Utilities Payable.
This account is credited when recording depreciation.
What is Accumulated Depreciation?
This statement is provided for a point in time.
What is the Balance Sheet?
A company incurs $2,400 of utilities expense but will pay later. How does this affect the equation?
What is Liabilities ↑ (Utilities Payable) and Equity ↓ (Expense)
Supplies decrease because of an adjusting entry. Which side records the decrease?
What is the credit side?
You earned $1,200 of revenue previously recorded as unearned.
Debit Unearned Revenue, credit Service Revenue.
You owe employees $900 for work done this period.
Debit Salaries Expense, credit Salaries Payable.
Assets are listed in this order on a classified balance sheet.
What is order of liquidity