Acct I Chapter 2 Test Review

Front

Which term describes a decrease in owner’s equity resulting from the operation of a business? Options: Expense, Revenue, Withdraws, Sale on Account

Back

Expense

Front

When can a balance sheet be prepared?

Back

At anytime

Front

What is the effect on the accounting equation when cash is received from sales?

Back

+ cash, + capital (revenue)

Front

What accounts are affected when services are sold on account?

Back

+ accounts receivable (A/R), + capital (revenue)

Front

Which transaction results in a decrease in cash and increase in supplies? Options: Paid cash for supplies, Received cash on account, Sold services on account, Paid cash for rent

Back

Paid cash for supplies

Front

Paying cash for rent affects which accounts?

Back

cash, capital (expense)

Front

Which of the following transactions increases cash and decreases accounts receivable? Options: Received cash on account, Paid cash for rent, Paid cash for supplies, Sold services on account

Back

Received cash on account

Front

If a business pays cash for a telephone bill, what is the effect on the accounting equation?

Back

- cash, - capital (expense)

Front

When cash is received from the owner as an investment, which accounts are increased?

Back

Cash and capital

Front

What type of transaction is described when an owner invests cash into the business?

Back

Investment