Classify That Account
Prepaid Rent is what type of account?
What is an Asset (Current)?
A business owner invests $15,000 cash into the company for stock. What accounts change?
➝ Cash ↑; Common Stock ↑
Free
+100 points
What is the basic accounting equation?
Assets = Liabilities + Stockholders’ Equity
Paying employee salaries is what type of activity?
Operating Activity
Unearned Revenue belongs to…?
What is a Liability?
The company purchases office supplies for $600 on account.
➝ Supplies ↑; Accounts Payable ↑
The normal balance of Cash is…?
Debit
Assets are $50,000 and Liabilities are $18,000. What is Stockholders’ Equity?
$32,000
Buying a delivery truck is an example of what?
Investing Activity
Treasury Stock belongs to which category?
What is Stockholders’ Equity
Paid $1,200 for this month’s rent.
Rent Expense ↑; Cash ↓
The normal balance of Accounts Payable is…?
Credit
If Equity increases by $12,000 and Assets increase by $20,000, what happened to Liabilities?
Increased by $8,000
Issuing stock to new investors is considered…?
Financing Activity
Notes Payable due in 10 years is what classification?
What is Liability (Long-term)?
Sold services for $5,000 on credit.
Accounts Receivable ↑; Service Revenue ↑
To increase Service Revenue, you record a…?
Credit
At year-end: Assets $90,000, Liabilities $40,000. Next year, Assets ↑ $10,000, Liabilities ↑ $6,000. What is Equity now?
$54,000
Collecting cash from customers is what type of activity?
Operating Activity
Dividends are part of which section?
What is Stockholders’ Equity (retained earnings reduction)?
Received $2,000 in advance from a customer for future services.
Cash ↑; Unearned Revenue ↑
To record payment of utilities, which account is debited?
Utilities Expense
A company begins with Assets $120,000, Liabilities $50,000. It earns $30,000 in revenue, pays $10,000 in expenses, and declares $5,000 in dividends (no other changes). What is ending Equity?
$85,000
Borrowing $50,000 from the bank and signing a 5-year note is what type of activity?
Financing Activity