1. All of the following are assets except a. unearned revenue b. cash c equipment d. inventory 2. Entries recorded in the right side of any account are called. c. decreases a. increases 3. Credits are used to record a. decreases in liabilities c. increases in expenses b. credits d. debits b. decreases in owner's equity d. increases in income 4. The withdrawal account of a sole proprietorship is debited when a. the owner invest cash b. the owner withdraws cash c an expense is paid d. a liability is paid
1. All of the following are assets except a. unearned revenue b. cash c equipment d. inventory 2. Entries recorded in the right side of any account are called. c. decreases a. increases 3. Credits are used to record a. decreases in liabilities c. increases in expenses b. credits d. debits b. decreases in owner's equity d. increases in income 4. The withdrawal account of a sole proprietorship is debited when a. the owner invest cash b. the owner withdraws cash c an expense is paid d. a liability is paid
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Instruction: Choose the letter af the correct answer and encirde it.
1. All of the following are assets except
a. unearned revenue
b. cash
C. equipment
d. inventory
2. Entries recorded in the right side of any account are called.
a. increases b. credits
c. decreases
d. debits
3. Credits are used to record
a. decreases in liabilities
b. decreases in owner's equity
d, increases in income
c. increases in expenses
4, The withdrawal account of a sole proprietorship is debited when
a. the owner invest cash
b, the owner withdraws cash
c an expense is paid
d. a liability is paid
5. Payment of insurance premiums in advance gives rise to
a, unearned income
b. prepaid expense
C. accrued income
d, accrued expense
6. Credit to cash results to
a. an increase in owner's equity
b, a decrease in assets
c. an increase in liabilities
d. an increase in income
7. Debits to expense accounts signify
a. increases in capital
b. increases in assets
c. decreases in capital
d. increases in liabilities
8. A chart of accounts is a (an)
a. Flowchart of all transactions
b. list of names of all accounts titles
c. accounting procedure manual
d. journal
9. Balance sheet accounts are
a. temporary accounts
b, accounts with debit balances only
c. adjusting accounts
d. permanent accounts
10. Posting is the process of transferring information from the
a. journal to the trial balance
b. ledger to the financial statements
c ledger to the trial balance
d. journal to the ledger
11. Transactions are recorded chronalogically in the
a, journal
b. Taccount
c. daybook
d. ledger
12. The first step in the accounting cycle is to
a. record transaction in a jaurnal
b. analyze transactions from source of documents
c. past journal entries to general ledger accounts
13. The components of the balance sheet equation are
d, adjust the general ledger accounts
a. assets, income and owner's equity
b. income, expenses and profit
c. assets, liabilities and owner's equity
d. investments, withdrawals and profit
14. Which users need financial information to enable them to determine wither their ioans and the
related interest will be paid when due.
a. Customer
b. investor
c. lenders
d. suppliers
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