Accounting I - Chapter 1 Review

What is an expense?

• Something expensive

• Increases in the Cash account

• Decreases in the Prepaid Insurance account

• Cost of goods & Services used to operate a business

What classification is "Accounts Payable"?

• Asset

• Liability

• Owner's Equity

What two accounts are changing? Bought supplies on account.

• Cash - Supplies +

• Cash + Supplies -

• Supplies + Accounts Payable +

• Supplies + Accounts Payable -

What two accounts are changing? Paid cash for supplies

• Cash + Supplies +

• Cash - Supplies +

• Cash - Supplies -

What is Revenue?

• A part of the business plan

• Something the IRS gives you

• An increase in equity due to the sale of goods

• Cash paid to a creditor

What classification is "Michael Delgado, Capital"?

• Asset

• Liability

• Owner's Equity

What two accounts are changing? Paid Cash on account.

• Cash - Accounts Payable +

• Cash + Accounts Payable -

• Cash + Accounts Payable +

• Cash - Accounts Payable -

What classification is "prepaid insurance"?

• Asset

• Liability

• Owner's Equity

What classification is "cash"?

• Asset

• Liability

• Owner's Equity

A person or business to whom a liability is owed is called

• Proprietor

• Creditor

• Avenger

• Carpenter