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The accounting equation may be expressed as
a. owner's equity = assets - liabilities.
b. revenue - expenses = net income.
c. revenue = net income - expenses.
d. liabilities - owner's equity = assets.
a. owner's equity = assets - liabilities.
The amount of money owed to the creditors of a business.
What is accounts payable?
In accounting, property or items of value owned by a business are referred to as _____________________.
What are assets?
Meghan started her business by investing $30,000 in cash. This transaction would
a. increase assets and increase owner's equity.
b. increase assets and increase liabilities.
c. increase one asset and decrease another asset.
d. decrease assets and decrease liabilities.
What is: a. increase assets and increase owner's equity.
_________________ are assets, generally long-term in nature, that are not intended to be converted to cash or to be used in the normal operations of the business in the next accounting period.
What are investments?
Increases to owner's equity may be from
a. expenses that are incurred.
b. expenses exceeding revenue for the period.
c. withdrawals of cash from the business by the owner.
d. revenue that is derived from sales of goods or services.
What is: d. revenue that is derived from sales of goods or services.
Tyler paid $3,700 on account to the company from which equipment was purchased on credit. This transaction would
a. decrease assets and decrease liabilities.
b. increase assets and increase owner's equity.
c. increase assets and increase liabilities.
d. increase one asset and decrease another asset.
What is: d. increase one asset and decrease another asset.
An example of an expense is
a. investments.
b. utilities consumed.
c. prepaid insurance.
d. withdrawals by the owner.
What is: b. utilities consumed.
A decrease in owner's equity may result from a(n)
a. purchase of office supplies for cash.
b. withdrawal of cash from the business by the owner.
c. revenue that is derived from sales of goods or services.
d. investment of cash in the business by the owner.
What is: b. withdrawal of cash from the business by the owner.
The owner's claim to the assets of the business are called _____________________.
What is owner's equity?
Accounts that affect owner's equity are a. assets, capital, and revenue. b. capital, liabilities, and expenses. c. expenses, capital, and withdrawals. d. withdrawals, assets, and liabilities.
What is: c. expenses, capital, and withdrawals.
When you buy a property and agree to pay for it later you are buying_________________.
What is "on credit"? "on account"?
Falana received $7,000 in cash from a client for professional services rendered. This transaction would
a. increase assets and increase owner's equity.
b. decrease assets and increase owner's equity.
c. increase liabilities and decrease owner's equity.
d. decrease assets and decrease owner's equity.
What is: a. increase assets and increase owner's equity.
Sue Lee paid $1,200 for office rent. This transaction would
a. increase assets and decrease owner's equity.
b. increase assets and increase liabilities.
c. decrease assets and decrease liabilities.
d. decrease assets and decrease owner's equity.
What is: d. decrease assets and decrease owner's equity.
The total amount of money owed to the business that represents money to be received later from the sales of goods or services.
What is accounts receivable?
Anything of value that is owned or controlled.
What is Property? are Assets?
The business or person selling you the property on credit is called ___________________.
What is the creditor?
A cash payment on a loan affects which of the following accounts?
a. Cash and Accounts Receivable
b. Cash and Accounts Payable
c. Cash and an expense account
d. Cash and a revenue account
What is: b. Cash and Accounts Payable
The drawing account should be used to show
a. the amount the owner has invested in the business.
b. the amount the owner has taken out of the business.
c. the amount the business has earned.
d. the amount the business has spent.
What is: b. the amount the owner has taken out of the business.
An __________________ shows the balance for a specific item, such as cash or computer equipment.
What is an account?
Dollar amounts measure both the cost of the property and the owner's rights or_________.
What is financial/legal claims?
Jason purchased office equipment for $4,800 on account. This transaction would
a. increase assets and increase owner's equity.
b. increase assets and increase liabilities.
c. increase one asset and decrease another asset.
d. decrease assets and decrease liabilities.
b. increase assets and increase liabilities.
Stephen purchased office supplies for $800 in cash. This transaction would
a. increase assets and increase owner's equity.
b. increase one asset and decrease another asset.
c. increase assets and increase liabilities.
d. decrease assets and decrease liabilities.
b. increase one asset and decrease another asset.
The accounting term for financial claims to assets is _________.
What is equity?
A _________________ ___________________ is an economic event that causes a change either an increase or a decrease in assets, liabilities, or owner's equity.
What is a business transaction?