QUESTION 5

1. We use the accounting equation to identify what a company owns and owes. _____ are resources a company owns or controls, _____ are claims creditors have against a companys assets, and _____ is the owners claim on a companys assets.

QUESTION 6

1. In double entry accounting a credit to an asset account will represent an increase in the asset account balance; and a debit will represent a decrease in the asset account balance.

   True

   False

QUESTION 7

1. The purchase of supplies on credit will ____ assets and ____ liabilities.

   		Increase, decrease
   		Decrease, increase
   		Decrease, decrease
   		Increase, increase

QUESTION 8

1. During the accounting cycle, we analyze transactions to prepare statements.

   True

   False