2.1 Define accounts and understand how they are used in accounting
1) A listing of all accounts in numerical order is called a chart of accounts.
2) Account titles such as marketing expense and depreciation expense would be numbered starting with a 3.
3) An account numbered 321 would be considered a shareholders' equity account as it begins with a 3.
4) Items of value that a company owns are called shareholders' equity.
5) The shareholders' equity section would include the accounts such as retained earnings and revenues.
6) Which is part of shareholders' equity?
A) Cash
B) Notes Payable
C) Dividends
D) Assets
E) Liabilities
7) Dividends are paid with cash to shareholders. Dividends are in what category of the chart of accounts?
A) Revenue
B) Assets
C) Shareholders' Equity
D) Liabilities
E) Revenue
8) Dividends, revenues, and expenses all:
A) start with the same chart of accounts number.
B) start with different chart of accounts numbers.
C) appear in the chart of accounts under assets.
D) appear in the chart of accounts under liabilities.
E) do not appear in the chart of accounts.
9) Which of the following would start with a 1 in the chart of accounts?
A) Land and buildings
B) Depreciation expense and marketing expense
C) Merchandise sales and rent revenue
D) Common shares and cash
E) Accounts Payable and Notes Payable
10) Which of the following would start with a 2 in the chart of accounts?
A) Income taxes to be paid and wages to be paid
B) Common shares and preferred shares
C) Cash and accounts receivable
D) Sales and fees revenue
E) Marketing expense and rent expense