Country Homes Corporation just recorded a transaction in its books. If this transaction increased
the total liabilities by $10,000, then ________. correct answers assets must increase, or equity
must decrease by $10,000
Which of the following appears on both the statement of retained earnings and the balance sheet?
correct answers ending retained earnings
For Retained Earnings, the category of account and its normal balance is ________. correct
answers Equity and a credit balance
A business renders services to a client and issues a sales invoice. The amount will be collected
from the customer at a later time. Which of the following is true at the time the invoice is issued?
correct answers Net income will increase.
On October 31, a business pays $1,500 cash for television ads that appeared during October.
Which of the following accounts is debited? correct answers Advertising Expense
A business purchases equipment by paying $6,276 in cash and issuing a note payable of $19,177.
Which of the following occurs? correct answers Cash is credited for $6,276, Equipment is
debited for $25,453, and Notes Payable is credited for $19,177.
A business performs services for $26,000 and collects cash from the customer. Which of the
following accounts will be debited? correct answers Cash
Which of the following is the correct formula to calculate the debt ratio correct answers Debt
ratio = Total liabilities / Total assets
An accounting entry that is characterized by having multiple debits and/or multiple credits is
called a ________ entry. correct answers compound journal
,Which of the following is an asset account? correct answers accounts receivable
The accountant for Eagle Financial Services, Inc. failed to make an adjusting entry to record
$3,000 of telephone expenses for the last two months of the year. Which of the following
statements is true? correct answers The total liabilities will be understated
Jones Financial Services, Inc. performed accounting services for a client in December. A bill was
mailed to the client on December 30. The company received the client's check by mail on
January 5. Which of the following accounts should appear on the income statement for the year
ended December 31 as related to the services performed? correct answers Service Revenue
Which of the following entries would be made because of the matching principle correct answers
Rent Expense 2,500
Prepaid Rent 2,500
Where does net income appear on a worksheet? correct answers Net income appears in the
balance sheet credit column and in the income statement debit column.
In which of the columns of a worksheet would a net loss be found? correct answers in the
balance sheet debit column and the income statement credit column
Which of the following adjusted balances would appear in the balance sheet credit column of a
worksheet? correct answers Salaries Payable
Notes Payable due within two years are classified as ________. correct answers long term
liabilities
Which of the following sections from the statement of cash flows includes borrowing cash and
paying off loans? correct answers the financing activities section
, Investors who want to know the amount of cash a company has available for new opportunities,
such as expanding into a new sales region, should analyze the company's ________. correct
answers non-cash financing and investing activities section
Which of the following describes the financing activities section of the statement of cash flows?
correct answers It includes cash inflows and outflows related to long-term liabilities and equity.
Cost Principle correct answers states that acquired assets and services should be recorded at their
actual cost.
GAAP correct answers the main US accounting rule book.
Faithful representation correct answers requires information to be complete, neutral, and free
from material error.
SEC correct answers oversees U.S. financial markets.
FASB correct answers oversees the creation and governance of accounting standards in the
United States.
Going concern assumption correct answers assumes that the entity will remain in operation for
the foreseeable future.
Economic entity assumption correct answers requires an organization to be a separate economic
entity.
Monetary unit assumption correct answers assumes that items on the financial statements are
recorded in a monetary unit.
IASB correct answers creates International Financial Reporting Standards.