ALEKS Accounting Questions and Answers

ALEKS Accounting

Accounts that normally have a credit (Cr.) balance - answer Liabilities, Revenues, and
Equity.

Revenue - answerIncome generated through providing services or products to
customers. When revenue is generated, a revenue account is increased.

Rev. accounts for businesses providing Services: Revenue

Rev. accounts for businesses selling Products: Sales

Rev. increases Net Income, which in turn increases Stockholders' Equity.

Expenses - answerRecorded when items are used to operate the business.

The value of assets used up or services consumed in the process of producing goods
and services to generate revenues.

Examples: Utilities Expense, Rent Expense, Insurance Expense, and Wages Expense.

Expenses decrease Net Income, which in turn decreases Stockholders' Equity.

Other Changes to Stockholders' Equity (Other than Exp. and Rev.) - answerIssuance of
Stock and Dividends.

Issuance of Stock - answerWhen the company sells additional stock.

The Capital Stock account is a stockholders' equity account used to accumulate
investments by stockholders.

An issuance of stock increases stockholders' equity but is not a revenue or expense
account.

Dividends - answerPayments of cash to stockholders as a sharing of profits.

The Dividends account is a temporary stockholders' equity account used to accumulate
the amount of cash paid to the stockholders.

A dividend decreases stockholders' equity but is not a revenue or expense account.

Items that do not cause changes to stockholders' equity - answerAssets and Liabilities