BAB1014 Quiz 1 Topic 1

Resources that are expected to yield future benefits are:

• Revenues

• Liabilities

• Assets

• Owner's Equity

Decreases in equity that represent costs of assets or services used to earn revenues are called:

• Liabilities

• Drawings

• Expenses

• Capital

If assets are RM99,000 and liabilities are RM32,000, then equity equals:

• RM32,000

• RM67,000

• RM198,000

• RM131,000

Double-entry accounting is an accounting system:

• that records each transaction twice.

• that records the effects of transactions and other events in at least two accounts with equal debits and credits.

• in which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits.

Rocky Industries received its telephone bill in the amount of RM300 and immediately paid it using a cheque. Rocky's general journal entry to record this transaction:

• Dr Cash RM300 Cr Telephone expense RM300

• Dr Bank RM300 Cr Telephone expense RM300

• Dr Telephone expense RM300 Cr Cash RM300

• Dr Telephone expense RM300 Cr Bank RM300

Orico Company purchased goods on credit RM600. The general journal entry made by Orico Company will be:

• Dr Goods RM600 Cr Cash RM600

• Dr Purchase RM600 Cr Cash RM600

• Dr Purchase RM600 Cr Account payable RM600

• Dr Account payable RM600 Cr Purchase RM600

A credit is used to record:

• An increase in an expense account.

• A decrease in an asset account.

• A decrease in a revenue account.

• A decrease in a capital account.

A debit is used to record:

• A decrease in an asset account.

• A decrease in an expense account.

• An increase in a revenue account.

• An increase in the drawings account.

The accounting equation may be expressed as

• Assets = Owner's Equity – Liabilities.

• Assets = Liabilities + Owner's Equity.

• Assets + Liabilities = Owner's Equity.

• Assets + Owner's Equity = Liabilities.

Marian Mosely is the owner of Mosely Enterprise. Which accounting concept requires Marian to keep her personal financial information separate from the financial information of Mosely Enterprise?

• Monetary unit assumption.

• Going-concern assumption.

• Matching principle.

• Business entity assumption.