Accounting Concepts Quiz

Applying the concept of double-entry accounting system, which of the following best refers to the term "debit"?

• decrease

• right side

• increase

• left side

Which of the following derivations is not consistent with the basic accounting equation?

• Assets less liabilities equal owner's equity

• Liabilities equal owner's equity less assets

• Owner's equity equal assets less liabilities

• Liabilities equal assets less owner's equity

Which of the following will cause owner's equity to increase?

• purchase of additional assets from existing cash of the business

• revenues are more than expenses

• revenues are less than expenses

• withdrawal made by the owner

Which of the following is not an asset account?

• prepaid rent expense

• accounts receivable

• building

• none of the above

Which of the following is a liability account?

• advances from customers

• advances to employees

• notes receivable

• utilities expense.

Which of the following is not a revenue account?

• professional fees

• interest income

• cost of sales

• sales

Which of the following is not an expense account?

• prepaid utilities expense

• taxes and licenses

• supplies expense

• wages expense

Which of the following does not describe an asset?

• economic benefits are expected to flow

• controlled by the business

• result of future transaction

• arising from past events

Who is responsible for the financial statements?

• Shareholders

• Stockholders

• Partners

• Creditors