WorksheetsPrinciples of Accounting (Quiz 2)
Total questions: 25
Worksheet time: 16mins
If revenues for the accounting period total $5,000, and the expenses total $1,000, then the net income (loss) must total
$6,000
$4,000
($6,000)
($4,000)
When a company pays a bill using cash, what the effect on its cash account?
Increases
Decreases
Stays the same
There is no cash account
How to calculate gross profit on the income statement?
Operating expenses - Sales= Gross profit
Sales - Cost of goods sold= Gross profit
Income - Expenses = Gross profit
Cost of sales - Sales =Gross profit
Interest on a bank overdraft is an/a..
revenue
expenses
liabilities
capital
Double entry in accounting means there must be________ entries for every transaction?
two
Three
six
one
A general ledger/T account has a ______ and _______ side.
cash receipt and debtors
debit and payments
debit and credit
creditors and debtors
Assets increase on the ________ side?
subsidiary
T-account
credit
debit
Owner's equity decreases on the _________ side?
credit
debit
payments
liability
________ are debts of the business?
Assets
Liabilities
Owner's equity
Vehicles
Equipment is an example of an/a ______?
loan
asset
liability
owners equity
Inventory/trading stock is an/a ________?
equity
liabilities
assets
owners equity
The first entry in accounting process is
ledger.
financial statement.
journal.
source of documents.
Accounts Payable is classified as a/an ___________ in the _____________.
Current asset; Balance Sheet
Current liability; Balance Sheet
Expense; Income Statement
Revenue; Income Statement
What is meant by accounts receivable?
Money owed to a company by its debtors
Money owed by a company to its creditors
Money owed to a company by its employees
Money owed by a company to its vendors
The owner invests personal cash in the business. What is the effect on accounting equation?
Increase in Assets I Increase in Equity
Increase in Liabilities I Increase in Assets
Decrease in Assets I Increase in Equity
