ACCI Unit 1

What is the effect when $300 cash is paid to Accounts Payable/Bob's Office Supply?

• Assets decrease $300 and owner's equity decreases $300.

• Assets increase $300 and owner's equity increases $300.

• Assets increase $300 and liabilities decreases $300.

• Assets decrease $300 and liabilities decrease $300.

Cash, Office Equipment, and Prepaid Insurance are all classified as:

• assets.

• liabilities.

• owner's equity.

• revenue.

What is an example of an account that has a normal debit balance?

• a. Accounts Payable/Adam's Office Supply

• b. Advertising Expense

• c. Mary Johnson, Capital

• d. Sales

What is an example of an account that has a normal credit balance?

• Cash

• Joan Brown, Drawing

• Supplies

• Tyler Jackson, Capital

What is the effect when $200 cash is paid to an advertising agency for advertisements for the business?

• a. Assets decrease $200 and owner’s equity decreases $200.

• b. Assets increase $200 and owner's equity increases $200.

• c. Assets increase $200 and owner's equity decreases $200.

• d. Liabilities increase $200 and owner's equity decreases $200.

What is the effect on assets when the owner increases owner's equity by investing $1,000 in the business?

• a. Decreased by $1,000

• b. Decreased by $2,000

• c. Increased by $1,000

• d. Increased by $2,000

What is an example of an account that has a normal credit balance?

• a. Advertising Expense

• b. Accounts Receivable/Davis Company

• c. Delivery Revenue

• d. Sam Jones, Drawing

Mariah Smith, Capital and Mariah Smith, Drawing are both classified as:

• owner's equity.

• expenses.

• liabilities.

• revenue.

Sales is classified as:

• assets.

• expenses.

• liabilities.

• revenue.

What is an example of an account that has a normal debit balance?

• a. Accounts Receivable/Oakdale School

• b. Accounts Payable/Jones Supply

• c. Mary Johnson, Capital

• d. Sales