Question

1

Ready Company received a bill for advertising. The accountant would record a

a.credit to cash.

b.credit to accounts payable.

c.credit to accounts receivable.

d.credit to advertising expense.

2

Which of the following is not true?

a.The capital account would be increased with a debit.

b.A liability account would be increased with a credit.

c.An asset account would be decreased with a credit.

d.The drawing account would be increased with a debit.

3

Accounts Payable is reported on which financial statement?

a.statement of owner's equity

b.balance sheet

c.income statement

d.None of these listed answers are correct.

4

Which of the following classifications of accounts has/have a normal credit balance?

a.Drawing

b.Revenues and liabilities

c.Revenues

d.Liabilities

e.All of these choices are correct.

5

Which of the following statements shows the difference in total revenue and total expenses and reports the performance of a business?

a.A funds flow statement

b.A statement of owner's equity

c.A balance sheet

d.An income statement

6

The _______________ of a company is the resources owned by the organization at a point in time, offset by the claims against those resources and owner's equity.

a.financial position

b.net loss

c.financial statement

d.net income

7

Which of the following accounts decrease when they are debited?

a.Assets and Drawing

b.Expenses and Assets

c.Drawing and Capital

d.Capital and Liabilities

e.Liabilities and Expenses

8

The heading of all financial statements include

a.period of time covered by the financial statement.

b.name of the company.

c.title of the financial statement.

d.All of these listed answers are correct.

Answer 1

Question 1

Correct answer----(c) credit to accounts payable

Cash is not paid so cash will not be credited instead accounts payables will be credited with a debit to advertising expense.

Question 2

Correct answer---- a.The capital account would be increased with a debit.

Capital account has credit normal balance hence capital account increase with a credit and decrease with debit.

Question 3

Correct answer---- b.balance sheet

Accounts payables is a liability which is reported on balance sheet.

Question 4

Correct answer---- b.Revenues and liabilities

Drawings have debit normal balance.

Question 5

Correct answer---- d.An income statement

An income statement shows how much income is generated in the period by summarizing all expenses and revenues in one statement.

Question 6

Correct answer---- a.financial position

Question 7

Correct answer---- d.Capital and Liabilities

Capital and liabilities both have credit normal balance so they decrease with debits and increase with credits.

Question 8

Correct answer---- d.All of these listed answers are correct.