Chapter 2

Fill in the Blanks.

1. Assets
2. Decrease
3. Debit
4. Exchange of asset
5. Debit or Credit
6. Equal to; 2 ledger accounts
7. Sales transaction
8. Cash
9. Monetary Unit
10. Liability
11. Accounts Receivable
12. Withdrawals
13. Debit
14. Debit
15. Debit
16. Journalizing
17. Liability
18. Capital
19. Statement of Financial Position
Fill in the Blanks (Rules of Debit and Credit)
1. Debit Balance; Debit; Credit
2. Credit Balance; Credit; Debit
3. Credit Balance; Credit; Debit
4. Credit Balance; Credit; Debit
5. Debit Balance; Debit; Credit
Fill in the Blanks.
a. Analyzing, Recording, Summarizing, and Reporting
b. Credit
c. Credit
d. Debit
e. Assets are company’s owned, and liability is company’s owed
f. Business Transactions
g. Increases by credit and decreases by debit.
h. An account payable
i. Cash; accounts payable
j. Increases owner’s equity
k. owner’s equity
l. Debit; Credit
m. Debit
n. Credit
True or False
 1. True
2. True
3. False
4. False
5. True
6. True
7. True
8. False
9. True
10. True
11. True
12. False
13. True
14. True
15. True
Multiple Choice
1. C
2. A – Withdrawal
3. C
4. A
5. A
6. B
7. D
8. C
9. A
10. C
11. C
12. A
Problem 1
a. No
b. Yes
c. Yes – Investment
d. Yes – Withdrawal
e. Yes – Withdrawal
Problem 2A
a. 480,000
b. 1,860,000
c. 440,000
d. 2,720,000
e. 1,400,000
Problem 2B
a. Profit - 88,000
 b. Income – 205,000
c. Income – 125,500
d. Expense – 569,000
e. Income - 342,000
Problem 3A
a. OE – 400,000
b. L – 268,000
c. A – 868,000
d. OE – 250,360
e. A – 700,000
Problem 3B
a. L – 150,000
b. A – 940,000
c. OE – 319,300
d. A – 383,500
e. OE – 387,000
Problem 3C
a.

360,000 160,000 200,000

120,000 20,000
480,000 180,000 300,000

b.

196,000 100,000 96,000

40,000 (30,000)
236,000 70,000 166,000

3x-x=240,000
2x=240,000
X=120,000