1.The cost concept tells us to record the purchase of a new piece of machinery at the price we pay for it instead of its market value. True False

2.The excess of expenses over revenues is called net income. True False

3.

All except one of the following accounts will be increased with a debit:

	A.	Unearned Revenues
	B.	Land
	C.	Accounts Receivable
	D.	Cash

4.

A withdrawal by the owner of the business would

	A.	increase revenues
	B.	decrease revenues
	C.	increase expenses
	D.	none of these

5.

Clark Company purchased $25,000 of equipment. They paid $2,000 cash and signed a note for the remainder to be paid over the next six months. How does this effect the accounting equation?

	A.	Increase Assets (Equipment $25,000) and decrease Liabilities (Accounts Payable $25,000)
	B.	Increase Total Assets by a net amount of $23,000 (increase equipment $25,000 and decrease Cash $2,000) and increase Liabilities (Notes Payable $23,000)
	C.	Increase Total Assets by a net amount of $25,000 (increase equipment $23,000 and increase Cash $2,000) and decrease Liabilities (Accounts Payable $25,000)
	D.	Increase Assets (Equipment $25,000) and increase Liabilities (Accounts Payable $25,000)