Assets vs. Liabilities
Which of the following is a liability:
- supplies
- accounts recievable
- or wages owed
Wages owed (liabilities)
Which statement reports revenues and expenses?
Income Statement
Stockholders equity equals what?
Assets minus liabilities
Which account is debited when cash is received?
Cash
What is the basic accounting equation?
assets = liabilites + stockholders equity
Cash, equipment, and inventory are all examples of what?
Assets
Which statement shows assets, liabilities, and stockholders' equity?
Balance sheet
Which increases stockholders' equity: paying rent or providing services for cash?
Providing services for cash
Debit cash and credit accounts receivable represent what transaction?
Collecting accounts recievable
If assets increase and liabilities stay the same, what must happen to equity?
Equity increases
Notes payable would be classified as an asset or a liability?
Liability
Which statement reports cash inflows and outflows?
Statement of cash flows
Do dividends increase or decrease stockholders' equity?
What is the correct entry to record paying an accounts payable?
Debit accounts payable, credit cash
Paying wages affects which part of equity?
Retained earnings (decreases)
What is the key characteristic that makes something an asset?
Probable future economic benefit controlled by the entity
Which statement is prepared as of a specific date?
Balance Sheet
Issuing common stock for cash affects which part of the accounting equation?
Increase assets and stockholders equity
What is the journal entry for issuing stock for cash?
Debot Cash, credit Common Stock
Receiving cash in advance from a customer increases which liability?
Unearned revenue
If a company collects cash from accounts receivable, what happens to total assets?
Total assets stay the same (cash up, A/R down)
Which statement links net income to the balance sheet?
Statement of retained earnings
Does purchasing equipmrnt on account affect stockholders' equity
No effect
A company performs services on account. What accounts are affected?
Debit accounts receiveable, credit revenue
A company earns revenue but hasn't paid yet. What happens?
Assets increase, and stockholders' equity increases