Accounting Quiz- 2302

An entity's revenue may result from

• A decrease in an asset from primary operations.

• An increase in a liability from incidental transactions.

• An increase in an asset from incidental transactions.

• A decrease in a liability from primary operations.

Which of the following is an essential characteristic of an asset?

• An asset is obtained at a cost.

• The claims to an asset's benefits are legally enforceable.

• An asset is tangible.

• An asset provides future benefits.

The normal balance of an account is on the

• Side represented by the increase in the account balance

• Debit side

• Side represented by the decrease in the account balance

• Credit side

Which is a logical order in the accounting cycle:

• Posting, financial statements and unadjusted trial balance

• Financial statements, adjusting entries and recording

• Financial statements, closing entries and reversing entries

• Closing entries, reversing entries and adjusting entries

The double entry accounting system means

• Each transaction is recorded with two journal entries

• Each item is recorded in a journal entry and then in a general ledger

• The dual effect of each transaction is recorded with a debit and a credit

• All of these are choices regarding double entry system

An account used to record the owner's investments in the business is called a(n):

• Withdrawals account.

• Capital account

• Revenue account

• Expense account

The account used to record the transfers of assets from a business to its owner is:

• A revenue account.

• The owner's capital account

• The owner's withdrawals account.

• An expense account

Prepaid expenses are:

• Payments made for products and services that do not ever expire.

• Classified as liabilities on the balance sheet

• Assets that represent prepayments of future expenses.

• Decreases in equity.

A formal promise to pay (in the form of a promissory note) a future amount is a(n):

• Unearned revenue.

• Note payable.

• Prepaid expense

• Credit account

A collection of all accounts and their balances used by a business is called a:

• Journal.

• General Journal

• Book of original entry

• Ledger