Grand Quiz D

Sources of increases to equity are

• issuance of shares

• purchases of merchandise

• notes payable

• expenses

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

Debits

• Increase both assets and liabilities

• Increase assets and decrease liabilities

• Decrease both assets and liabilities

• increase assets and decrease liabilities

Assets normally show

• credit balances

• debit balances

• debit and credit balances

• debit or credit balances

Dallas company has assets of $210,000 & equity of $15,000. What are the liabilities of the company?

• $195,000

• $225,000

• $210,000

• $180,000

The retained earning section of statement of financial position is determined by

• Assets, liabilities and share capital

• revenues, expenses and share capital

• share capital, dividends and residual equity

• revenues, expenses and dividends

A credit to a liability account

• indicates an increase in the amount owed to creditors

• indicates a decrease in the amount owed to creditors

• is an error

• must be accompanied by a debit to an asset account

An Income Statement

• presents the revenues and expenses for a specific time period

• reports the changes in assets, liabilities and equity over a time period

• reports the assets, liabilities and equity at a specific date

• summarizes the changes in equity for a specific period of time

An account is a part of the financial information system and is described by all except which one of the following?

• An account has a debit and credit side

• An account may be part of a manual or a computerized accounting system

• An account has a title

• An account is a source document

The usual sequence of steps in the transaction recording process is:

• journal → analyze → ledger

• analyze → journal → ledger

• journal → ledger → analyze

• ledger → journal → analyze