Question

Which of the following statements is true?   

Select one:

a. We can only find the opening balance of Capital on the 10-column worksheet when there is no owner’s drawings.

b. We can only find the opening balance of Capital on the 10-column worksheet when there is no owner’s contribution.

c. We can always find the opening balance of Capital on the 10-column worksheet.

d. We can never find the opening balance of Capital on the 10-column worksheet.

Using accrual accounting, expenses are recorded and reported only   

Select one:

a. when they are incurred whether or not cash is paid.

b. if they are paid before they are incurred.

c. when they are incurred and paid at the same time.

d. if they are paid after they are incurred.

An adjusting entry:  

Select one:

a. affects a balance sheet and an income statement account.

b. affects Cash at bank account.

c. affects an income statement account.

d. affects two balance sheet accounts.

When rent is incurred in one period and paid in the next period, this leads to which of the following accounts appearing in the statement of financial position?

Select one:

a. Rent payable

b. Prepaid rent

c. Rent receivable

d. Rent expense

An expense incurred:

Select one:

a. increases equity

b. decreases assets and liabilities

c. increases assets and liabilities

d. decreases equity

A credit to a liability account:

Select one:

a. indicates an increase in the amount available to the owners.

b. indicates an increase in the amount of expenses.

c. indicates a decrease in the amount of assets.

d. indicates an increase in the amount owed to creditors.

Answer 1

1. Which of the following statements is true?

Answer : d. We can never find the opening balance of Capital on the 10-column worksheet.

2. Using accrual accounting, expenses are recorded and reported only

Answer: a.when they are incurred whether or not cash is paid.

3. An adjusting entry:  

Answer: a.affects a balance sheet and an income statement account.

4. When rent is incurred in one period and paid in the next period, this leads to which of the following accounts appearing in the statement of financial position?

Answer: a.Rent payable

5. An expense incurred:

Answer: d.decreases equity

6. A credit to a liability account:

Answer: d.indicates an increase in the amount owed to creditors.