Chapter 2 - The recording process

If a company has liabilities of 40,000 and equity of 67,000, then the assets of the entity are:

•  67,000

• 40,000 

• 107,000

• 27,000

Ledger is an accounting book:

• Record combinations in chronological and systematic order

• General ledger

• Multi-column book

• All are correct

Which of the following cases shall be recorded in the accounting books:

• Sign a contract to rent a factory for production. Contract value 20 million/year

• Buy fixed assets 50 million, not yet paid

• A and B are both correct

• A and B are both wrong

Users of indirect accounting information (external users):

• Tax authority

• Managers

• Chief Accountant

• None of the sentences are correct

Liabilities arising from:

• Invoicing and services performed to customers

• Buy equipment with money

• Pay the seller for the item purchased

• Purchase of unpaid goods

Enterprises are building warehouses, this unfinished construction program is:

• Source of capital to form assets of enterprises

• Enterprise's assets

• Depends on each employee's point of view

• Depends on the regulations of the business

Which of the following statements is incorrect:

• Equity is the cash the owner has in the business

• Assets + liabilities are always in balance with equity

• The owner is the creditor of the enterprise

• All sentences above

Which of the following events is not an economic transaction recorded in the accounting books?

• Fire damage

• Expenses incurred but not yet paid

• Discount for a product (recorded to discount, reduced selling price)

• Get a loan

Effects of accounting entries:

• To briefly reflect the arising economic transactions

• To reduce errors when recording accounting books

• A and B are both wrong

• A and B are both correct

A financial statement that reports the assets, liabilities, and stockholders, equity at a specific date:

• balance sheet

• statement of cash flows

• retained earning statement

• income statement