WGU CYC1 Chapter 02 – Flashcards
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When equipment is purchased on credit, a] assets and liabilities increase. b] assets increase and liabilities decrease. c] assets and owner's equity increase. d] assets and expenses increase.
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a] assets and liabilities increase.
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Assets and liabilities are reported on a] the balance sheet. b] the income statement. c] the statement of owner's equity. d] both the balance sheet and the income statement.
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a] the balance sheet.
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The statement of owner's equity is prepared before the balance sheet so that the ending capital balance is available. True False
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True
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The net income or net loss for the period is shown on both the income statement and the balance sheet. True False
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False
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Revenue is recorded when cash is collected from charge-account clients. True False
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False
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A withdrawal of funds by the owner for personal use is considered a business expense. True False
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False
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If liabilities are $4,000 and owner's equity is $15,000, assets are $9,000. $15,000. $19,000. $4,000.
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$19,000
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Al Dunn Bakery bought a new oven for $1,380. Al paid $300 as a cash down payment and will pay the balance in 30 days. Total assets increased by $1,080. True False
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True
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Which financial statement is a representation of the accounting equation? a] Income Statement b] Statement of Owner's Equity c] Balance Sheet d] Profit and Loss Statement
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c] Balance Sheet
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Assets always equal debts of the business plus the financial interest of the owner. True False
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True
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An Income Statement is all of the following except a] a formal report of business operations. b] a profit and loss statement. c] a statement of revenues less withdrawals and expenses. d] a statement of income and expenses.
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c] a statement of revenues less withdrawals and expenses.
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Total assets of Douglas Fuhr Furniture Co. are $36,000 and the total liabilities are $12,000. What is the amount of the owner's equity? $36,000 $24,000 $48,000 $6,000
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$24,000
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Ginger Yale Ice Company receives money from a customer on account. Recording this transaction will a] increase Accounts Receivable b] increase G. Yale, Capital c] decrease Accounts Payable d] increase Cash
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d] increase Cash
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Assets and liabilities are reported on a] the balance sheet. b] the income statement. c] the statement of owner's equity. d] both the balance sheet and the income statement.
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a] the balance sheet.
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he owner's investment or equity in a business is called a] cash b] drawing c] capital d] accounts payable
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c] capital
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When cash is collected from accounts receivable, the total amount of assets increases. True False
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False
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Withdrawals by the owner are reported on the income statement. True False
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False
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If the income statement covered a six-month period ending on November 30, 2010, the third line of the income statement heading would read a] Month Ended November 30, 2010. b] November 30, 2010. c] Six-month Period Ended November 30, 2010. d] Month of November, 2010.
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c] Six-month Period Ended November 30, 2010.
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When equipment is purchased for cash, a] assets decrease and expenses increase. b] one asset increases and another asset decreases. c] assets and owner's equity increase. d] assets increase and liabilities decrease.
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b] one asset increases and another asset decreases.
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A business transaction is a financial event that affects the resources of a business. True False
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True
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The entire process of analyzing, recording, and reporting business transactions is based on the fundamental accounting equation. True False
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True
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The owner's investment or equity in a business is called cash drawing capital accounts payable
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capital
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A net loss results a] when expenses are greater than revenue. b] when assets are greater than liabilities. c] when revenue is greater than expenses. d] when expenses are greater than assets.
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a] when expenses are greater than revenue.
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A creditor's claim against the firm's property lasts until the debt is paid. True False
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True
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Assets alays equal debts of the business plus the financial interest of the owner. True False
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True
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The statement of owner's equity is prepared before the balance sheet so that the ending capital balance is available. True False
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True
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If the income statement covered a six-month period ending on November 30, 2010, the third line of the income statement heading would read a] Month Ended November 30, 2010. b] November 30, 2010. c] Six-month Period Ended November 30, 2010. d] Month of November, 2010.
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c] Six-month Period Ended November 30, 2010.
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Which financial statement is a representation of the accounting equation? a] Income Statement b] Statement of Owner's Equity c] Balance Sheet d] Profit and Loss Statement
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c] Balance Sheet
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Owner's equity is a] the amount taken out of a business by the owner for personal use. b] the financial interest of the owner of a business. c] the amount the owner invested in the business. d] the revenues less the expenses.
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b] the financial interest of the owner of a business.
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The rent paid for future months is a(n) a] asset. b] liability. c] expense. d] revenue.
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a] asset.
