Need help with the the test guide, just answer it and I'll overlook it to better understand how the answers came about.
Section A Directions: Each of the following statements is true or false. Indicate your choice by writing in the Answers column T for a true answer or F for a false answer. (2p0ts fareach correct answer) For Answers Scoring 1. One business transaction has a single-entry effect upon the accounting elements; two business transactions together have a dual-entry effect on accounting elements. - - A T account has three parts: the title, the debit side, and the credit side. - - To credit an account is to enter an amount on the right side of the account. - 4. For every account, the total dollar amount on the credit side is called the balance. - - Debit always means decrease and credit always means increase. - - A normal balance is the side of an account that is increased. - - An increase in an expense decreases owner's equity. - - PONP'S" Revenues increase owner's equity; therefore, they should always be recorded directly on the credit side of the owner's capital account. - - to If a transaction has one debit. it can only have one credit. - - 10. If Damen's delivery fees for the month include 3800 on account from customers and 3300 in cash, the revenue account increases $1,100. - - 11. Prepaid insurance is an asset because it will provide future benefits. - - 12. Withdrawals of cash by the owner for personal reasons decrease owner's equity and should be debited directly to the owner's capital account. - - 13. The sum of the debits must equal the sum of the credits on the trial balance. - 14. A trial balance is a list of accounts showing the title and the balance of each account. - - 15. The trial balance is a formal statement just like the income statement, the owner's equity statement, and the balance sheet. - -Section B Directions. Complete each of the following statements by writing in the Answers column the letter of the word or words that correctly completes each statement or answers the question. (3 points each) For Answers Scoring 1. The assets of a business may consist of a number of items, such as (A) accounts payable; (B) cash; (C) delivery fees; (D) drawing; (E) none of these. - - 2. Totals on the debit and credit sides to determine the balance of an account are known as (A) footings; (B) credits; (C) debits; (D) rulings; (E) revenues. - - 3. The normal balance is a debit in a (A) liability account; (B) revenue account; (C) debt account; (D) capital account; (E) drawing account. - - 4. When a loan is paid, a(n) (A) liability account is debited; (B) expense account is debited; (C) asset account is debited; (D) revenue account is credited; (E) drawing account is debited. - - 5. Investment of cash in a business (A) increases revenue; (B) decreases capital; (C) increases drawing; (D) increases cash; (E) decreases drawing. 6. The financial statement prepared first is the (A) Statement of Financial Condition; (B) Statement of Owner's Equity; (C) Income Statement; (D) Balance Sheet; (E) any one of these statements can be prepared first. - 7. Cash received on account affects (A) cash and accounts payable; (B) cash and accounts receivable; (C) accounts receivable and revenue; (D) accounts receivable and accounts payable; (E) cash and owner's equity. - - 8. Payment of office rent represents an increase in (A) revenues; (B) cash; (C) a liability account; (D) drawing; (E) expenses. - - 9. The trial balance is (A) a list of revenues showing the title and balance of each account; (B) used as an aid in preparing the balance sheet; (C) reported to the federal government; (D) a formal state or report; (E) all of these. - - 10. After the Statement of Owner's Equity is prepared, which of the following is carried over to the Balance Sheet? (A) Net Income; (B) Ending Drawing Balance; (C) Ending Capital Balance; (D) Total Assets; (E) none of these. - - PageSection C Directions: For each account, indicate the financial statement on which it is reported. BS = Balance Sheet, IS = Income Statement. and CE = Statement of Owner's Equity. (7 point each) 1. Accounts Payable - 6. Equipment - 2. Accounts Receivable - 7. Prepaid Rent - 3. Capital - 8. Service Fees - 4. Drawing - 9. Supplies - 5. 1 Electricity Expense 0. Wages Expense
