How does the purchase of equipment by signing a note affect the accounting equation?

a.assets increase; liabilities increase

b.assets increase; owner's equity increases

c.assets increase; liabilities decrease

d.assets increase; assets decrease

The entry to adjust for the cost of supplies used during the accounting period is

a.debit owner's equity; credit Supplies

b.debit Supplies Expense; credit Supplies

c.debit Supplies; credit owner's equity

d.debit Accounts Payable; credit Supplies

Of the following steps of the accounting cycle, which step should be completed first?

a.Adjusting entries are journalized and posted to the ledger.

b.Transactions are posted to the ledger.

c.Financial statements are prepared.

d.Closing entries are journalized and posted to the ledger.

After net income is entered on the end-of-period spreadsheet, the Balance Sheet Debit and Credit columns must

a.be the same amount as the total amount in the Adjusted Trial Balance Debit and Credit columns

b.equal each other

c.not be equal to each other and need not be the same total amounts as any other pair of columns on the work sheet

d.be the same amount as the total amount of the Income Statement Debit and Credit columns