1

Ready Company received a bill for advertising. The accountant would record a

a.credit to cash.

b.credit to accounts payable.

c.credit to accounts receivable.

d.credit to advertising expense.

2

Which of the following is not true?

a.The capital account would be increased with a debit.

b.A liability account would be increased with a credit.

c.An asset account would be decreased with a credit.

d.The drawing account would be increased with a debit.

3

Accounts Payable is reported on which financial statement?

a.statement of owner's equity

b.balance sheet

c.income statement

d.None of these listed answers are correct.

4

Which of the following classifications of accounts has/have a normal credit balance?

a.Drawing

b.Revenues and liabilities

c.Revenues

d.Liabilities

e.All of these choices are correct.

5

Which of the following statements shows the difference in total revenue and total expenses and reports the performance of a business?

a.A funds flow statement

b.A statement of owner's equity

c.A balance sheet

d.An income statement

6

The _______________ of a company is the resources owned by the organization at a point in time, offset by the claims against those resources and owner's equity.

a.financial position

b.net loss

c.financial statement

d.net income

7

Which of the following accounts decrease when they are debited?

a.Assets and Drawing

b.Expenses and Assets

c.Drawing and Capital

d.Capital and Liabilities

e.Liabilities and Expenses

8

The heading of all financial statements include

a.period of time covered by the financial statement.

b.name of the company.

c.title of the financial statement.

d.All of these listed answers are correct.