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Question(s) / Instruction(s):

Alexander purchased office equipment for $3,000 on account.  This transaction would

a)            increase assets and owners equity

b)            increase assets and liabilities

c)            increase one asset and decrease another asset

d)            decrease assets and liabilities

 

 

 

Question 2          Owners equity is affected by

a)            investments

b)            losses

c)            profits

d)            all of the above

 

 

 

 

Question 3          A financial statement that shows the net income or loss for a specified period of time is called a(n)

a)            balance sheet

b)            statement of financial position

c)            statement of financial condition

d)            income statement

 

 

 

Question 4          Asset and expense accounts normally have

 

a)            credit balances

b)            large balances

c)            debit balances

d)            negative balances

 

 

 

Question 5          The normal balance is a credit in

a)            a revenue account

b)            a liability account

c)            the capital account

d)            all of the above

 

 

 

Question 6          The normal balance is a debit in

a)            an expense account

b)            an asset account

c)            the drawing account

d)            all of the above

 

 

Question 7          An increase in an asset account may also

a)            decrease a liability account

b)            increase an expense account

c)            increase owners equity

d)            have no effect on any other account

 

 

 

Question 8          The difference between the total debits and credits to an account is called

a)            balance

b)            ruling

c)            footing

d)            trial balance

 

 

 

 

Question 9          Revenues

a)            decrease liabilities

b)            decrease cash

c)            increase expenses

d)            increase owners equity

 

 

 

Question 10        A purchase of an asset on account

a)            increases cash

b)            decreases owners equity

c)            increases assets

d)            decreases expenses

 

 

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