Mark each statement True or False: Accounts Payable is a liability.

Mark each statement True or False: A shift in assets means liabilities will increase.

Mark each statement True or False: Assets - Liabilities = Owner’s Equity.

Mark each statement True or False: Assets represent what is owned by the business.

Mark each statement True or False: Cash is a liability.

Mark each statement True or False: Office Equipment is an asset.

Mark each statement True or False: Accounts Payable is listed under assets.

Mark each statement True or False: Capital is listed under liabilities.

Mark each statement True or False: A heading of a financial report has no particular date.

Mark each statement True or False: Revenue is an asset.

Mark each statement True or False: Withdrawals increase owner’s equity.

Mark each statement True or False: As expenses go down, owner’s equity goes down.

Mark each statement True or False: An advertising bill incurred but unpaid is recorded as an increase in advertising expense and a decrease in a liability.

Mark each statement True or False: Revenue inflows can only be in the form of cash.

Mark each statement True or False: Net income occurs when expenses are greater than revenue.

Mark each statement True or False: Withdrawals will reduce the owner's capital on the income statement.

Mark each statement True or False: The balance sheet lists assets, liabilities, and expenses.

Mark each statement True or False: Withdrawals are listed on the income statement.

Mark each statement True or False: Assets are listed on the income statement.

Mark each statement True or False: A number entered on the left side of an account is said to be credited to the account.

Mark each statement True or False: Debits are always positive.

Mark each statement True or False: Footings are always a credit balance.

Mark each statement True or False: “Credit” always means the number should be put on the right side.

Mark each statement True or False: A ledger does not use debits or credits.

Mark each statement True or False: Rules for debit and credit work opposite for Capital and Revenue.

Mark each statement True or False: An increase in an asset is always a debit.

Mark each statement True or False: Withdrawals increase with a credit.

Mark each statement True or False: After a transaction is recorded it can have only one debit and one credit.

Mark each statement True or False: An unpaid bill results in a debit to a liability and a credit to an expense.

Mark each statement True or False: Withdrawals are usually a credit balance on the trial balance.

Mark each statement True or False: A balance sheet will list only debit accounts.

Mark each statement True or False: The balance sheet is always prepared before the income statement.

Mark each statement True or False: Subtotaling is only used on the trial balance.

Mark each statement True or False: The beginning balance of capital is shown on the balance sheet.

Mark each statement True or False: The ledger is the book of original entry.

Mark each statement True or False: Compound journal entries must have no more than three credits.

Mark each statement True or False: Billing a company for services on account would result in a debit to cash.

Mark each statement True or False: When you journalize, the PR column must be completed.

Mark each statement True or False: Rent paid in advance is an expense.

Mark each statement True or False: Posting can only be done manually.

Mark each statement True or False: Posting means transferring information from the ledger to the journal.

Mark each statement True or False: Cross-referencing means the PR column in the ledger is up to date.

Mark each statement True or False: Posting can only be done once a month.

Mark each statement True or False: Posting results in information being accumulated in the journal.

Mark each statement True or False: The trial balance is in the same order as the journal.

Mark each statement True or False: A trial balance can have two balances for some accounts.

Mark each statement True or False: Slides and transpositions can help locate errors in

If a journal entry is posted, no corrections can be made.

In the trial balance, account titles that have credit balances are indented.

Prepaid Rent is a liability.

Accumulated Depreciation is a contra-asset.

The adjustment for supplies is the amount of supplies used up.

The normal balance of Accumulated Depreciation is a debit.

The historical cost of equipment is not adjusted.

Net loss is the result of revenues greater than expenses.

Accumulated Depreciation is never adjusted.

Assets do not go in the income statement column on a worksheet.

A net loss would go in the debit column of the balance sheet on a worksheet.

Withdrawals go in the credit column of the balance sheet on a worksheet.

Subtotaling is used in preparing the formal financial statements from a worksheet.

Withdrawals are listed on the income statement.

Accumulated Depreciation is added to the cost of the asset on the balance sheet.

Debits are the inside column on the formal reports.

Totals on the formal balance sheet will match totals on the worksheet.

After the adjustment is posted, the Supplies ledger account shows the amount on hand.

After posting, accumulated depreciation has a debit balance.

Adjustments on a worksheet have to be journalized and posted.

After the adjustment is posted, Prepaid Rent shows the amount that has not yet expired.

Depreciation Expense is a contra-asset.

Income Summary is a permanent account.

Income Summary is found on the worksheet.

Expenses are permanent accounts.

The balance in the Income Summary is closed to the Capital account.

Income Summary has a normal debit balance.

Income Summary is listed on the post-closing trial balance.

Interim reports are always prepared each month.

Capital on the post-closing trial balance is the beginning balance for the next accounting cycle.

Accumulated Depreciation is a temporary account.

Supplies on the post-closing trial balance represent the amount of supplies on hand.

Restrictive endorsements are the safest type of endorsement.

The payee is the one receiving a check.

The drawee is the bank at which the drawer has an account.

Petty Cash is an expense.

A shortage in the Cash Short and Over account results in a debit balance.

A pay period is always defined as a 2-week period.

The Fair Labor Standards Act states that an employee must be paid overtime pay if he/she works over 40 hours in a work week.

An employee may claim fewer allowances on his/her IRS form-W4 than he/she really has.

Withholding of FICA taxes (OASDI and Medicare) are limited to the amount due on all earnings below $184,500 (2026).

Gross pay is the amount the employee earned before taxes and deductions are taken out.

The employee earnings record shows gross earnings, deductions, net pay, and taxable earnings for only a single payroll period.

The individual employee earnings record is used to update the payroll register.

The taxable earnings columns of the payroll register do not show the amount of tax owed.

Only the employee earnings record indicates the employee’s marital status and the number of allowances claimed.

The payroll register shows gross earnings, deductions, net pay, and taxable earnings for a payroll period.

Employers must pay FICA equal to the exact amount employees pay.

Only employers, not employees, must calculate and pay both FUTA and SUTA taxes.

Workers’ compensation insurance is paid by the employer to insure that each employee is fairly compensated.

Workers’ compensation insurance has a single rate for each employee of a firm, much like FICA.

The payroll register is the source of the data used to journalize the payroll in the general journal.

The FICA payable accounts reflect the tax liability of only the employer.

Deductions for payroll withholding taxes represent a liability of the employees until the taxes are paid by the employer.

Workers’ compensation insurance is paid by the employer to ensure that employees are compensated if they lose their job.

The year-end computation for annual workers’ compensation shows additional money is owed. You will record the amount with a debit to Worker’s compensation expense and a credit to Accounts payable.