Chapter 5 Test Questions Accounting

A decrease to an expense account is a ____________________.

credit

An increase to a revenue account is a ____________________.

credit

The normal balance for Consulting Fees is a ____________________.

credit

A decrease to Collection Fees is recorded as a ____________________.

debit

An increase to Mark Cookson, Withdrawals is recorded as a ____________________.

debit

An increase to Utilities Expense is a recorded as a ____________________.

debit

An increase to the withdrawals account is a ____________________.

debit

The left side of a T account is a ____________________.

debit

The normal balance for expense accounts is a ____________________.

debit

True or False Income from Fees is a permanent account.

False

True or False Liability, expense, and capital accounts all have normal credit balances.

False

True or False Liability, revenue, and withdrawal accounts all have normal credit balances.

False

True or False Permanent accounts start each accounting period with a zero balance.

False

True or False Revenues increase owner's equity, and increases in revenues are recorded as debits.

False

True or False A business should have separate accounts for recording revenue and expenses.

True

True or False Expenses decrease owner's equity and are recorded as debits.

True

True or False Expenses have the opposite effect from revenue on the capital account. True

True

True or False Temporary capital accounts are extensions of the owner's capital account.

True

True or False The rules of debit and credit for expense accounts are the same as the rules for asset accounts.

True

True or False The total of all accounts with normal debit balances should equal the total of all accounts with normal credit balances if the rules of debit and credit were followed correctly.

True

True or False The withdrawal of cash by the owner of a business decreases owner's equity.

True

The costs of doing business are known as ____.

expenses

The dollar balance of a(n) ____ account is carried forward from one period to the next.

permanent

Money a business earns from the sale of goods or services is the ____.

revenue

When a business follows the GAAP of ____, revenue is recorded on the date it is earned.

revenue recognition

The balance of a(n) ____ account does not carry forward to the next accounting period.

temporary capital

Bought $175 of office supplies on credit from North Supply, Inc. A. Cash in Bank B. Accounts Receivable C. Office Supplies D. Office Equipment E. Accounts Payable F. D. Orondo, Capital G. D. Orondo, Withdraws H. Fees I. Rent Expense J. Utilities Expenses

Debit C Credit E

Issued a check for $300 to buy office equipment. A. Cash in Bank B. Accounts Receivable C. Office Supplies D. Office Equipment E. Accounts Payable F. D. Orondo, Capital G. D. Orondo, Withdraws H. Fees I. Rent Expense J. Utilities Expenses

Debit D Credit A

Dale Orondo wrote a check for $200 for personal use. A. Cash in Bank B. Accounts Receivable C. Office Supplies D. Office Equipment E. Accounts Payable F. D. Orondo, Capital G. D. Orondo, Withdraws H. Fees I. Rent Expense J. Utilities Expenses

Debit G Credit A

Issued a check to pay the $800 rent for the month. A. Cash in Bank B. Accounts Receivable C. Office Supplies D. Office Equipment E. Accounts Payable F. D. Orondo, Capital G. D. Orondo, Withdraws H. Fees I. Rent Expense J. Utilities Expenses

Debit I Credit A

Paid by check the $125 monthly heating bill. A. Cash in Bank B. Accounts Receivable C. Office Supplies D. Office Equipment E. Accounts Payable F. D. Orondo, Capital G. D. Orondo, Withdraws H. Fees I. Rent Expense J. Utilities Expenses

Debit J Credit A

A(n) ____ occurs when the owner takes assets out of the business for personal use.

withdraws

Received $550 in cash for services billed earlier to A & S Equipment. A. Cash in Bank B. Accounts Receivable C. Office Supplies D. Office Equipment E. Accounts Payable F. D. Orondo, Capital G. D. Orondo, Withdraws H. Fees I. Rent Expense J. Utilities Expenses

Debit A Credit B

Received $925 for services provided to Abruzzi Construction. A. Cash in Bank B. Accounts Receivable C. Office Supplies D. Office Equipment E. Accounts Payable F. D. Orondo, Capital G. D. Orondo, Withdraws H. Fees I. Rent Expense J. Utilities Expenses

Debit A Credit H

Billed A & S Equipment, a customer, $875 for services provided. A. Cash in Bank B. Accounts Receivable C. Office Supplies D. Office Equipment E. Accounts Payable F. D. Orondo, Capital G. D. Orondo, Withdraws H. Fees I. Rent Expense J. Utilities Expenses

Debit B Credit H

The normal balance for the owner's withdrawals account is a ____________________.

debit