Acc 2

Over a period of time, if total assets increase by $27,000 and total liabilities increase by $ 7,000, then owner's equity will increased by_____.

$20,000

S. Storm has $20,000 invested in his business and the business owes creditors $8,000. Determine the amount of assets in the business.

$28,000

Rob Cougar Landscaping has assets of $70,000 and equity of $30,000. Determine the amount of liabilities in the business.

$40,000

A debit may result in

1. A decrease in a liability account 2. An increase in an asset account 3. An increase in an expense account 4. a decrease in a revenue account

A Credit may result in

1. An increase in a liability account 2. An increase in a revenue account 3. A decrease in an asset account 4. An increase in the Capital account

The owner of a business invested $5000 in the business. What are the effects on the fundamental accounting equation?

Assets increase $5000; liabilities, no effect; owner's equity, no effect

What is the fundamental accounting equation?

Assets= Liabilities+Owner's Equity

When a T account has several items on both sides, the balance of the account is written_____.

On the side with the larger total

A trial balance is

a listing of all the assets, liabilities, and owner's equity accounts that have balances.

Which of the following is a form of revenue? a. A cash purchase invoice b. Credit sales to charge customers c. A check paying utilities d. A credit purchase invoice e. A check paying a mortgage

b. Credit sales to charge customers

The _______ shows the financial positions of a company.

balance sheet

A business received $600 cash from charge customers to apply on account. The effect of the transaction is an increase in an asset and a(n)

decrease in asset

The owner's right claim, or financial interest is referred to as____.

equity

The order financial statements are prepared is a follows:

income statement, statement of owner's equity, balance sheet

Amounts owed by a business are referred to as ____.

liabilities

The normal balance of an account is on the

plus side

The _________ means that a business is separated from its owners.

separate entity concept

The_____shows how and why the owner's equity account has changed over a stated period of time.

statement of owner's equity