Exam 3: The Double-Entry Framework

A credit increases liabilities and owner's equity.

Match the terms with the definitions. -A tool used to illustrate the double-entry accounting system showing the account title,left side,and right side.

The trial balance is used in preparing financial statements.

A trial balance is taken periodically to check the equality of the debits and credits.

The accounts below all have normal balances.Prepare a trial balance for Alana's Florist Shop as of September 30,20--. Service Fees \ 40,650 Accounts Receivable 18,000 Rent Expense 3,700 Utilities Expense 1,400 Alana, Capital 42,100 Alana, Drawing 2,700 Wages Expense 18,300 Equipment 35,000 Supplies 4,400 Accounts Payable 10,400 Prepaid Insurance 1,600 Cash 8,050

The difference between the total debits and credits to an account is called a

The accounting equation must remain in balance.

The fact that each transaction has a dual effect on the accounting elements provides the basis for what is called

The drawing account should be used to show

Owner's equity includes four types of accounts: Owner's Capital,Revenues,Expenses,and Owner's Drawing.

The purchase of a supply of markers for three months should be recorded as an increase in revenue and a decrease in cash.

A debit to either the ____________________ account or a(n)____________________ account will cause a decrease in the owner's equity of a business.

The ____________________ is shown on the third line of the trial balance heading.

Craig deposits $6,000 in an account to start a new business.He should debit Cash and credit his capital account.

Payment of rent on account decreases the Cash account.

The balance sheet

A T account has which of the following three major parts?

The sum of the debits must equal the sum of the credits on the trial balance.

Increases in owner's equity are entered as credits.

An amount entered on the left side of an account is called a(n)____________________.