acc1100

1. What is the primary purpose of a ledger in accounting?

• To record business transactions

• To store inventory information

• To track employee performance

• To manage customer relationships

Which accounting principle is essential for maintaining ledgers?

• Single-entry accounting

• Cash basis accounting

• Double-entry accounting

• Accrual accounting

In a ledger, the balance column always reflects the current balance after each transaction.

• True

• False

A business purchases equipment worth $1,500 using both $500 in cash and a $1,000 loan. How doesthis transaction affect the accounting equation?

• Assets increase by $1,500; Liabilities increase by $1,000; Owner’s Equity increases by $500

• Assets increase by $1,500; Liabilities increase by $1,000; Assets decrease by $500

• Liabilities increase by $1,500; Assets decrease by $500; Owner’s Equity increases by $1,000

• Assets increase by $500; Liabilities decrease by $1,000; Owner’s Equity increases by $1,500

A business pays $5,000 in advance for six months of rent. How does this affect the accounting equation at the time ofpayment?

• Assets decrease by $5,000; Liabilities decrease by $5,000

• Assets decrease by $5,000; Owner’s Equity decreases by $5,000

• One asset decreases by $5,000; another asset increases by $5,000

• Liabilities increase by $5,000; Owner’s Equity decreases by $5,000

What is the effect on the accounting equation when a business pays salaries to its employees?

• Assets increase, Owner’s Equity increases

• Assets decrease, Liabilities increase

• Assets decrease, Owner’s Equity decreases

• Liabilities increase, Owner’s Equity increases

which of the following option is known as a permanent account？

• income

• expense

• drawing

• capital

which of the following option is non-current

• asset that has 16months expected life

• liability that has 1 month expected life

• asset that has 6 months expected life

• liability that has 11 months expected life

Which of the following options best represents the expanded accounting equation?

• Assets = Liabilities + Income - Capital + Drawings - Expenses

• Assets = Liabilities + Capital - Drawings + Income - Expenses

• Assets = Liabilities + Drawings - Capital + Income + Expenses

• Assets = Liabilities - Capital + Drawings - Income + Expenses

Which of the following best explains the concept of double-entry accounting?

• Recording transactions on the left side only

• Ensuring the accounting equation remains unbalanced

• Recording the dual effect of transactions on the elements of the accounting equation

• Keeping a single record of every transaction