College Accounting
Chapter 2: Analyzing & Recording Transactions
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2-1 Identify examples of accounting source documents?
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2-2 Explain the importance of source documents?
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2-3 Identify each of the following as either an asset, a liability, or equity
Prepaid Rent
Unearned Fees
Building
Wages Payable
Office Supplies
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2-4 What is an account? What is a ledger?
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2-5 What determines the number and types of accounts a company uses?
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2-6 Does debit always mean increase and credit always mean decrease? Explain.
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2-7 Describe a chart of accounts?
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2-8 What type of transactions increase equity? What types decrease equity?
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2-9 Why are accounting systems called double-entry?
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2-10 What are the four steps when analyzing transactions?
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2-11 For each transaction, double-entry accounting requires what to be true about debits and credits?
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2-12 An owner invests $15,000 cash along with equipment having a market vale of $23,000 in a company. Prepare the
necessary journal entry.
Date
Account Titles and Explanation
P. R.
Debit
Credit
2-13 Explain what a compound journal entry is.
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2-14 Why are posting reference numbers entered in the journal when entries are posted to ledger accounts??
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2-15 Where are dollar signs typically entered in financial statements?
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2-16 If a $4,000 debit to Equipment in a journal entry is incorrectly posted to the ledger as a $4,000 credit, and the
ledger account has a resulting debit balance of $20,000, what is the effect of this error on the trial balance column
totals?
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2-17 Describe the link between the income statement and the statement of owner’s equity.
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2-18 Explain the link between the balance sheet and the statement of owner’s equity.
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2-19 Define and describe revenues and expenses.
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2-20 Define and describe assets, liabilities and equity.
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2-21 Write the debt ratio and explain what it means.
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Use this space to take additional notes from the chapter: