7. Adjusting entries affect at least

a. one income statement account and one balance sheet account.

b. one revenue and one expense account.

c. one asset and one liability account.

d. one revenue and one balance sheet account.

8. The right side of an account

a. is the credit side.

b. is the correct side.

c. reflects all transactions for the accounting period.

d. shows all the balances of the accounts in the system.

9. Which accounts normally have debit balances?

a. Assets, expenses, and revenues.

b. Assets, expense, and retained earnings.

c. Assets, liabilities, and dividends.

d. Assets, expenses, and dividends.

10. 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 $400. The cash account has a

a. $400 credit balance.

b. $900 debit balance.

c. $500 debit balance.

d. $500 credit balance.

11. The right to receive money in the future is called a(n)

a. revenue.

b. account receivable.

c. liability.

d. account payable.

12. Dividends paid

a. increase assets.

b. increase expenses.

c. decrease revenues.

d. decrease retained earnings.

13. Which financial statement is prepared first?

a. Statement of cash flows

b. Balance sheet

c. Income statement

d. Retained earnings statement

14. Which financial statement would best indicate whether the company relies on debt or stockholders equity to finance its assets?

a. Statement of Cash Flows

b. Retained Earnings Statement

c. Income Statement

d. Balance Sheet