ACC205 Principles of Accounting: Week 1 Study Guide (February 2012)

Acc205 Principles of Accounting
Week 1 Study Guide (February 2012)

1. An account that normally has a debit balance may occasionally have a credit balance. (Points : 1)

2. Debit refers to the right side of the T-account, and credit refers to the left side. (Points : 1)

3. By definition, which of the following represents the owners of a corporation? (Points : 1)

4. Net income is $29,000. Beginning capital balance was $34,000. Ending capital balance was $55,000. No capital contributions were made by the owner during the year. What amount of drawings was made? (Points : 1)
$ 8,000
$ 5,000

5. Which of the following accounts decreases with a credit? (Points : 1)
Accounts payable
Notes Payable

6. A trial balance is the list of all a company's accounts along with their account numbers. (Points : 1)

7. A business purchases equipment for cash in the amount of $8,000. Which account is credited? (Points : 1)
Accounts payable
Utilities expense

8. A business renders service to a client and sends out a sales invoice. The amount will be collected from the customer at a later time. Which of the following would be TRUE at the time when the invoice is sent out? (Points : 1)
Owner’s equity will decrease.
Total liabilities will increase.
Total assets will decrease.
Net income will increase.

9. Equipment is sold for cash in an amount equal to the cost of the equipment recorded on the books. How does this sale affect the accounting equation? (Points : 1)
One asset increases; one asset decreases.
Assets increase; liabilities increase.
Assets increase; liabilities decrease.
Assets increase; owner’s equity increases.

10. Martin Supply Service paid $350 cash to a materials supplier that it owed from the previous month. What is the effect of the cash payment on accounts of the business? (Points : 1)
Materials account increases; Owner’s capital account decreases.
Cash account decreases; Accounts payable increases.
Accounts payable increases; Owner’s capital account decreases.
Cash account decreases; Accounts payable decreases.
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