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1) A withdrawal by the owner is recorded as a deduction from assets and a deduction from liabilities. True False 2) The income statement reports the...
1) A withdrawal by the owner is recorded as a deduction from assets and a deduction from liabilities. True False
2) The income statement reports the financial position of an enterprise. True False
3) The adjusting entry for depreciation is a debit to an expense account and a credit to an asset account. True False
4) A reversing entry is made to cancel an incorrect entry. True False
5) Recording the debits and credits of a transaction twice will cause the trial balance totals to be unequal. True False
6) A credit means an entry on the right side of an account. True False
7) Table 1: The accounts and their balances as of Dec. 31 of this year for MMD Company are:Accounts Payable = $32,400; Accounts Receivable = $4,200; Advertising Expense = $960; Cash = $ 11,100; Equipment = $51,000; Income from Services = $19,200; Insurance Expense = $480; Owner, Capital, Jan. 1 = $33,480; Owner, Drawing = $4,800; Rent Expense = $2,850; Supplies = $3,120; Utilities Expense = $1,770; Wages Expense = $4,800.
Using Table 1, the amount of the Total Assets is ______________.?
8) When cash is received in payment of an accounts receivable, which of the following is true?
Total assets and total owner's equity increase
Total assets increase
Total assets decrease
Total assets remain the same
None of the above
9) Payment of a liability will
decrease total liabilities and decrease total owner's equity
decrease total assets and decrease total liabilities
have no effect on total assets and owner's equity
decrease total assets and increase total liabilities
none of the above
10) A company paid creditors on account, $1,000. The effect of the transaction on the accounting equation is
a decrease in an asset and a decrease in a liability
a decrease in an asset and a decrease in owner's equity
an increase in an asset and a decrease in a liability
an increase in a liability and a decrease in an asset
none of the above
11) A cash payment of $230 to a creditor was recorded as $320 debit to Accounts Payable and a $320 credit to Cash. The necessary correcting entry is:
debit to Cash, $90, credit to Accounts Receivable, $90
debit to Accounts Payable, $90, credit to Cash, $90
debit Cash, $90, credit Accounts Payable, $90
debit Accounts Receivable, $90, credit Cash, $90
none of the above
