1.Which is a true statement regarding the accounting equation?

A.

The equation consists of three parts: assets, liabilities, and net income.

B.

The equation is an optional tool for accountants to use.

C.

The equation can be stated as assets minus liabilities equals equity.

D.

The equation does not need to balance during a specific period.

2. T/F An accrual adjusting entry records an expense after the cash is paid, or it records revenue before the cash is received.

3. T/F Permanent accounts are not closed at the end of the accounting period.

4. T/F A signature card is a card that shows each authorized person's signature for a bank account.

5.

The entity that signs the promissory note and promises to pay the required amount is the ________.

A.

banker of the note

B.

maker of the note

C.

holder of the note

D.

payee of the note

6.

An asset is considered to be obsolete ________.

A.

when it is fully depreciated

B.

only when it wears out

C.

only at the end of its useful life

D.

when a newer asset can perform the job more efficiently than the old asset can