Grand Quiz B

Issued ordinary shares in exchange for cash will effect as follows:

• Increase in Asset Increase in Equity

• Increase in Assets Increase in Liabilities

• Decrease in Assets Decrease in Equity

• Decrease in Assets Increase in Equity

Net income results when

• Assets > Liabilities

• Revenues = Expenses

• Revenues > Expenses

• Revenues < Expenses

Sources of decreases to equity are

• issuance of shares

• purchases of merchandise

• notes payable

• expenses

The right side of an account

• is the correct side

• reflects all transactions for the accounting period

• shows all the balances of the accounts in the system

• is the credit side

An account will have a credit balance if the

• credits exceed the debits

• first transaction entered was a credit

• debits exceed the credits

• last transaction entered was a credit

Credits

• decrease both assets and liabilities

• decrease assets and increase liabilities

• increase both assets and liabilities

• increase assets and decrease liabilities

The normal balance of any account is the

• left side

• right side

• side which increases that account

• side which decreases that account

Communication of economic events is the part of the accounting process that involves

• identifying economic events

• quantifying transactions into dollars and cents

• preparing accounting reports

• recording and classifying information

An account consists of

• a title, a debit balance and a credit balance

• a title, a left side and a debit balance

• a title, a debit side and a credit side

• a title, a right side and a debit balance

The financial statement that reports assets, liabilities, and equity is the

• income statement

• retained earnings statement

• statement of cash flows

• statement of financial position