Question

7. Tyler paid $3,700 on account to the company from which equipment was purchased on credit. This transaction would

1. increase assets and increase owner's equity.
2. decrease assets and decrease liabilities.
3. increase assets and increase liabilities.
4. increase one asset and decrease another asset.

8. An example of an expense is

1. withdrawals by the owner.
2. supplies consumed.
3. prepaid insurance.
4. investments.

16. Asset and expense accounts normally have

1. credit balances.
2. large balances.
3. debit balances.
4. negative balances.

17. Accounts that affect owner's equity are

1. expenses, capital, and revenue.
2. drawing, assets, and liabilities.
3. assets, capital, and revenue.
4. capital, liabilities, and expenses.

18. Increases are entered on the credit side of a(n)

1. asset account.
2. drawing account.
3. liability account.
4. expense account.

19. A credit

1. decreases liabilities.
2. decreases owner's equity.
3. increases assets.
4. is on the right side.

23. A debit

1. decreases assets.
2. increases owner's equity.
3. is on the left side.
4. increases liabilities.

25. A debit represents an increase in

1. revenues.
2. an asset.
3. a liability.
4. owner's equity.

36. Forms and papers that provide information about a business transaction are called

1. ledgers.
2. journals.
3. accounts.
4. source documents.

37. Because the first formal accounting record of a transaction is made in a journal from source document information, a journal is commonly referred to as a(n)

1. book of original entry.
2. account.
3. ledger.
4. cross-reference.

38. For EVERY transaction, the accountant enters the

1. year, month, and day.
2. day.
3. month and day.
4. year and day.

39. The transaction to record payment for delivery equipment that was purchased on account in the previous month would include

1. debiting Accounts Payable and crediting Cash.
2. debiting Cash and crediting Accounts Payable.
3. debiting Cash and crediting Accounts Receivable.
4. debiting Delivery Equipment and crediting Cash.

53. The balance sheet reports

1. net income.
2. expenses.
3. revenue.
4. liabilities.

Answer 1

1	B. decrease assets and decrease liabilities
2	B. Supplies consumed
3	C. debit balances
4	A. expenses, capital, and revenue
5	C. liability account
6	D. is on the right side
7	C. is on the left side
8	B. an asset
9	D. Source document
10	A. Book of original entry
11	A. Year, Month, and day
12	A. debiting Accounts payable and crediting cash
13	D. liabilities