The accounting equation could also 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.
What is: a. owner's equity = assets - liabilities.
100
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.
What is: b. increase assets and increase liabilities.
100
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.
What is: b. increase one asset and decrease another asset.
100
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.
100
Any accounting period of twelve months' duration is usually referred to as a(n)
a. fiscal year.
b. calendar year.
c. physical year.
d. operational year.
What is: a. fiscal year.
200
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.
200
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:
a. decrease assets and decrease liabilities.
200
An example of an expense is
a. investments.
b. supplies consumed.
c. prepaid insurance.
d. withdrawals by the owner.
What is:
b. supplies consumed.
200
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.
200
Which phase of the accounting process involves recognizing the effect of transactions on assets, liabilities, owner's equity, revenue, and expenses of a business?
a. input
b. processing
c. output
d. summarizing
What is: b. processing
300
The financial statement that should be completed first is the
a. balance sheet.
b. statement of financial position.
c. statement of financial condition.
d. income statement.
What is:
d. income statement.
300
The financial statement that shows the state of the firm's assets, liabilities, and owner's equity on a specific date is called a(n)
a. balance sheet.
b. statement of operations.
c. statement of owner's equity.
d. income statement.
What is: a. balance sheet.
300
Mr. Thomas 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.
300
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.
300
Liability, owner's capital, and revenue accounts normally have
a. debit balances.
b. large balances.
c. negative balances.
d. credit balances.
What is:
d. credit balances.
400
Accounts that affect owner's equity are
a. assets, capital, and revenue.
b. capital, liabilities, and expenses.
c. expenses, capital, and drawing.
d. drawing, assets, and liabilities.
What is:
c. expenses, capital, and drawing.
400
Increases are entered on the credit side of a(n)
a. asset account.
b. liability account.
c. expense account.
d. drawing account.
What is:
b. liability account.
400
A cash payment on a transaction that was bought on credit 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
400
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.
400
A credit represents a decrease in
a. an asset.
b. a liability.
c. owner's equity.
d. revenues.
What is: a. an asset.
500
The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current is known as
a. an account form.
b. journalizing.
c. posting.
d. file maintenance
What is: d. file maintenance
500
The fact that each transaction has a dual effect on the accounting elements provides the basis for what is called
a. single-entry accounting.
b. compound-entry accounting.
c. multiple-entry accounting.
d. double-entry accounting.
What is:
d. double-entry accounting.
500
The difference between the total debits and credits to an account is called a
a. balance.
b. ruling.
c. footing.
d. trial balance.
What is: a. balance.
500
The balance sheet
a. is a list of all accounts showing the title and balance of
each account.
b. is used as an aid in preparing the balance sheet and
income statement.
c. is for a period of time.
d. shows that assets equal liabilities plus owner's equity.
What is:
d. shows that assets equal liabilities plus owner's equity.
500
A petty cash on hand amount that is less than a recorded amount is called
a. list price.
b. cash over.
c. cash short.
d. cash discount.