AVSC 3320 Quiz 1

A company purchases a vehicle with a new loan. This vehicle (and NOT the loan for the vehicle) is considered what on the company's books?

Asset

Prepaid insurance is considered to be what type of account?

Asset

Sales are considered which of the following?

Equity

A company's liabilities can be determined with which equation?

Liabilities = Assets - Owner's Equity

A company purchases a vehicle with a new loan. The loan for the vehicle is considered what on the company's books?

Liability

An unpaid electric bill would be considered what?

a liability

A customer prepays for a wedding cake. When the customer picks up the cake, two accounts will be affected in order to balance the basic accounting equation. What is one of these accounts?

unearned revenue

Which of the following are considered liability accounts? Select all that apply.

unearned revenue accounts payable notes payable

A customer bought six dozen cookies on credit from the local bakery. The customer is now paying cash for the cookies. In order to balance the basic accounting equation, a change must be made to cash and at least what other account?

accounts receivable

You buy a new computer on credit from your local computer store. The computer store would record this transaction as a change in

accounts receivable

A business buys inventory on credit from its supplier. This inventory must be entered as what on the business' books?

an account payable

A customer places an order for a cake at a bakery. The customer pays $50 cash for the cake at the time of the order, and the cake will be made and delivered a week later. How will this transaction be recorded in the bakery's books? Select all that apply.

an increase of assets of $50 an increase in unearned revenue of $50

Which of the following are considered asset accounts? Select all that apply.

cash prepaid insurance equipment accounts receivable inventory

You place $5,000 cash into a new business you're starting. The $5,000 should be recorded as which of the following? Select all that apply.

equity

You place $5,000 cash into a new business you're starting. The $5,000 should be recorded as which of the following? Select all that apply.

equity an asset

Which of the following are considered equity accounts? Select all that apply.

expenses revenue