does not contain the balances chart of accounts AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-C3 Describe a ledger and a chart of accounts Topic: Ledger and Chart of Accounts 225 A record containing all the separate accounts for a company as well as all of their balances is called the _ ledger AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-C3 Describe a ledger and a chart of accounts Topic: Ledger and Chart of Accounts 226 _ requires that each transaction affect, and be recorded in, at least two accounts It also means that total amounts debited must equal total amounts credited for each transaction Double-entry accounting AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-C4 Define debits and credits and explain double-entry accounting Topic: Debits and Credits 2-248 Copyright © 2016 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 227 The _ is found by determining the difference between total debits and total credits for an account, including any beginning balance account balance AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-C2 Describe an account and its use in recording transactions Topic: The Account and Its Analysis 228 To increase an asset account we would _ it and to increase a liability account, we would it debit; credit Answers need to appear in the order shown above AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-C4 Define debits and credits and explain double-entry accounting Topic: Debits and Credits 229 Funky Music purchased $25,000 of equipment for cash The Equipment asset account is _ for $25,000 and the cash account is _ for $25,000 debited; credited Answers need to appear in the order as shown above AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Decision Making Blooms: Understand Difficulty: Medium 2-249 Copyright © 2016 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education Learning Objective: 02-C4 Define debits and credits and explain double-entry accounting Topic: Debits and Credits 230 Jackson Brown Footwear had total liabilities of $130 million and total assets of $375 million Its debt ratio was _ 34.7% Debt Ratio = Total Liabilities/Total Assets Debt Ratio = $130 million/$375 million = 34.7% AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Decision Making Blooms: Apply Difficulty: Hard Learning Objective: 02-A2 Compute the debt ratio and describe its use in analyzing financial condition Topic: Debt Ratio 231 _ is the process of transferring journal entry information from the journal to the ledger Posting AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-P1 Record transactions in a journal and post entries to a ledger Topic: Journalizing and Posting Transactions 232 A gives a complete record of each transaction in one place, and shows debits and credits for each transaction journal AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember 2-250 Copyright © 2016 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education Difficulty: Easy Learning Objective: 02-P1 Record transactions in a journal and post entries to a ledger Topic: Journalizing and Posting Transactions 233 A more structured format that is similar to a T-account in that it has columns for debits and credits, but that is different in that it has columns for transaction date, explanation, and the account balance is the _ balance column account AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-C2 Describe an account and its use in recording transactions Topic: The Account and Its Analysis 234 The posting process is the link between the _ and the _ journal; ledger Answers can be recorded in either order AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-P1 Record transactions in a journal and post entries to a ledger Topic: Journalizing and Posting Transactions 235 You increase the Service Revenue account on the _ side of its account right or credit AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Easy Learning Objective: 02-C4 Define debits and credits and explain double-entry accounting 2-251 Copyright © 2016 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education Topic: Debits and Credits 236 You decrease the Accounts Payable account on the _ side of its account left or debit AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: Medium Learning Objective: 02-C4 Define debits and credits and explain double-entry accounting Topic: Debits and Credits 2-252 Copyright © 2016 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education ... debits and credits and explain double-entry accounting Topic: Debits and Credits 229 Funky Music purchased $25,000 of equipment for cash The Equipment asset account is _ for $25,000 and the... Objective: 02-C4 Define debits and credits and explain double-entry accounting Topic: Debits and Credits 230 Jackson Brown Footwear had total liabilities of $130 million and total assets of $375 million... transactions in a journal and post entries to a ledger Topic: Journalizing and Posting Transactions 232 A gives a complete record of each transaction in one place, and shows debits and credits for