HRM732 Quiz 2

Jackson's Small Engine Repair Shop, a proprietorship, started the year with total assets of $60,000 and total liabilities of $40,000. During the year, the business recorded $100,000 in repair revenues, $55,000 in expenses, and Mike Jackson, the owner, withdrew $10,000. Jackson's Capital balance at the end of the year was

$55,000

In the second month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $500. The opening balance of the cash account was $200. The cash account has a

$600 debit balance.

If a company reported a loss in the first month of operations, the loss would reduce owner's capital and would be

deducted in the same section as owner's drawings.

The common characteristic possessed by all assets is

future economic benefit

Collection of a $600 Accounts Receivable

increases an asset $600; decreases an asset $600.

In the first month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $500. The cash account has a

$400 debit balance

a trial balance

A list of accounts and their balances at a given time

The accounting equation, for a proprietorship, may be expressed as

Assets = Liabilities + Owner's Equity.

If an owner makes a withdrawal of cash from a proprietorship, then

assets will decrease and owner's equity will decrease.

In recording an accounting transaction in a double-entry system

the amount of the debits must equal the amount of the credits.