QUESTION PRINCIPLES OF ACCOUNTING

QUESTION CHAPTER 2

1. Provide the names of two (a) asset accounts, (b) liability accounts, and (c) equity
accounts.
2. What is the difference between a note payable and an account payable?
3. Discuss the steps in processing business transactions.
4. What kinds of transactions can be recorded in a general journal?
5. Are debits or credits typically listed first in general journal entries? Are the debits or
the credits indented?
6. Should a transaction be recorded first in a journal or the ledger? Why?
7. If assets are valuable resources and asset accounts have debit balances, why do
expense accounts also have debit balances?
8. Why does the recordkeeper prepare a trial balance?
9. If an incorrect amount is journalized and posted to the accounts, how should the
error be corrected?
10. Identify the four financial statements of a business.
11. What information is reported in a balance sheet?
12. What information is reported in an income statement?
13. Why does the user of an income statement need to
know the time period that it covers?
14. Define (a) assets, (b) liabilities, (c) equity, and (d) net assets.
15. Which financial statement is sometimes called the statement of financial position?
Discussion Questions

PRINCIPLES OF ACCOUNTING – 2021