Lesson 5 Quiz Flashcards
The process of entering information into the accounting system is called
recording
Phelps paid $600 for office rent. This transaction would:
- increase assets and decrease owner’s equity
- increase assets and increase liabilities
- decrease assets and decrease liabilities
- decrease assets and decrease owner’s equity
decrease assets and decrease owner’s equity
If services for the month total $1000 in cash and $500 on account from customers, the cash amount increases $500. T/F
false
A T-account has three parts: the title, debit side, and credit side. T/F
true
Owner’s equity is affected by:
- investments
- losses
- profits
- withdrawals by the owner
- all of the above
all of the above
An increase in an asset account may also
increase owner’s equity
A credit
is on the right side
The normal balance is a credit in:
- a revenue account
- a liability account
- an owner’s equity account
- all of the above
all of the above
Revenues decrease owner’s equity. T/F
false
Jane pays wages in the amount of $2,543; this transaction:
- decreases wage expense
- increases cash
- increases owner’s equity
- increases liability account
- none of the above
none of the above
The trial balance is:
- a list of all accounts showing the title and balance of each account
- used as an aid in preparing the balance sheet and income statement
- not a formal statement or report
- all of the above
- none of the above
all of the above
Liability, owner’s equity, and revenue accounts normally have
credit balances
An increase to which of these accounts will increase owners equity?
- accounts payable
- drawing
- client fees
- rent expense
client fees
At least two accounts are affected by every transaction. T/F
true
Outflows of assets or increases in liabilities as a result of efforts to produce revenues is known as
expense
