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LNDN$11010-$ Internat Corporate Reporting $2023/24$ T$1$

LNDN$11010-$ Internat Corporate Reporting $2023/24$ T$1$

$3$ of $43$ of $4$ Items

$42$:$59$

Question $1$

Which of the following statements is true regarding debits and credits?

Responses

On the income statement, debits are used to increase account balances, whereas on the statement of financial position, credits are used to increase account balances.

On the income statement, debits are used to increase account balances, whereas on the statement of financial position, credits are used to increase account balances.

The rules for debit and credit and the normal balance of Share Capital$-$Ordinary are the same as for liabilities.

The rules for debit and credit and the normal balance of Share Capital$-$Ordinary are the same as for liabilities.

The basic equation on the statement of financial position is Assets $+$ Liabilities $=$ Equity.

The basic equation on the statement of financial position is Assets $+$ Liabilities $=$ Equity.

On the income statement, revenues are increased by debits whereas on the statement of financial position retained earnings is increased by a credit.

On the income statement, revenues are increased by debits whereas on the statement of financial position retained earnings is increased by a credit.

Question $2$

Taylor Industries purchased supplies for $1,000.$ They paid $500$ in cash and agreed to pay the balance in $30$ days. The journal entry to record this transaction would include a debit to an asset account for $1,000,$ a credit to a liability account for $500.$ Which of the following would be the correct way to complete the recording of the transaction?

Responses

Debit the retained earnings account for $500.$

Debit the retained earnings account for $500.$

Credit another liability account for $500.$

Credit another liability account for $500.$

Credit the retained earnings account for $500.$

Credit the retained earnings account for $500.$

Credit an asset account for $500.$

Credit an asset account for $500.$

Question $3$

If a company has overdrawn its bank balance, then

Responses

the cash account debits will exceed the cash account credits.

the cash account debits will exceed the cash account credits.

its cash account will show a credit balance.

its cash account will show a credit balance.

its cash account will show a debit balance.

its cash account will show a debit balance.

it cannot be detected by observing the balance of the cash account.

it cannot be detected by observing the balance of the cash account.

Question $4$

Fontaine Fox Company buys a $$12,000$ van on credit. This transaction will affect the

Responses

statement of financial position only.

statement of financial position only.

income statement and retained earnings statement only.

income statement and retained earnings statement only.

income statement, retained earnings statement, and statement of financial position.

income statement, retained earnings statement, and statement of financial position.

income statement only.

income statement only.

Question $5$

O$\text{'}$ Hara Company began operations on December $1,2017.$ Presented below is selected information related to O$\text{'}$ Hara Company at December $31,2017.$

Equipment $160,000$ Utilities Expense $24,000$

Cash $56,000$ Accounts Receivable $108,000$

Service Revenue $432,000$ Salaries and Wages Expense $188,000$

Rent Expense $52,000$ Notes Payable $40,000$

Accounts Payable $64,000$ Dividends $60,000$

Share Capital$-$ordinary $112,000$

At December $31,2017,$ assets total

Responses

$216,000.$

$216,000.$

$280,000.$

$280,000.$

$324,000.$

$324,000.$

$388,000.$

$388,000.$

Question $6$

O$\text{'}$ Hara Company began operations on December $1,2017.$ Presented below is selected information related to O$\text{'}$ Hara Company at December $31,2017.$

Equipment $160,000$ Utilities Expense $24,000$

Cash $56,000$ Accounts Receivable $108,000$

Service Revenue $432,000$ Salaries and Wages Expense $188,000$

Rent Expense $52,000$ Notes Payable $40,000$

Accounts Payable $64,000$ Dividends $60,000$

Share Capital$-$ordinary $112,000$

At December $31,2017,$ liabilities total

Responses

$104,000.$

$104,000$