Multiple Choice 1. The accounting equation can be stated as: a. A+ L - OE = 0 b. A- L + OE = 0 C. -A+L - OE =0 d. A-L - OE = 0 2. Which of the following accounts has a debit balance? a. Accounts Payable b. Accrued Taxes C. Accumulated Depreciation d. Uncollectible Accounts Expense 3. First statement: In general, debits refer to increases in account balances, and credits refer to decreases. Second statement: All liability and equity accounts are increased on the credit side and decreased on the debit side. a. True, True b. .True, False c. False, True d. False, False 4. Factors that shape an accounting information system include the a. nature of the business. b. size of the firm. c. volume of data to be processed. d. all of these. 5. Debit always means a. right side of an account. b. increase. c. decrease. d. none of these.Multiple Choice 1. Which of the following is true? a The debit is on the right side of an asset account. b. The debit is on the left side of an asset account. c. The credit is on the left side of a liability account. d. The debit is on the right side of an expense account. 2. Which of the following accounts has a normal debit balance? a. Accounts Payable b. Notes Payable c. Consulting Revenues d. Advertising Expense 3. "Which of the following accounts is increased by a credit? a. Accounts Receivable b. Sales c. Withdrawals d. Advertising Expense 4. Which of the following is true? a. A debit will increase a liability account. b. A credit will increase an asset account. C. A credit will increase a revenue account. d. A debit will decrease an expense account. 5. In applying the rules of debits and credits, which of the following statements is correct? a. The word "debit" means to increase, and the word "credit" means to decrease. b. . Asset, expense and capital accounts are debited for increases. C. Liability, revenue and capital accounts are debited for increases. d.Asset, expense and withdrawals are debited for increases.96 | Basic Financial Accounting and Reporting 2021 Edition by If assets total P700.000 and liabilities total P400,000, how much are the net asset P300,000 b. P400,000 C. P700,000 d. P1,100,000 /. What are increases in resources that a firm earns by providing goods or services its customers? a. Assets b. Income C. Expenses d. Liabilities 8. If assets increase by P100,000 and liabilities decrease by P30, UUU, owner's equity must a. remain unchanged. b.) increase by P130,000. C. decrease by P70,000. d. decrease by P130,000. A T-account consists of how many parts? a. One b. Two C. Three d. FourProblem #1 Accounting Events Which of the following events would be recognized in the accounting records of Ruth Chew HR Consultants on the date indicated? Feb. 15 Chew HR Consultants offers to purchase a piece of land for P1,400,000. There is a high likelihood that the offer will be accepted. Mar. 2 Chew HR Consultants receives notice that its rentals for an office space will increase from P50,000 to P60,000 per month effective April 1. Apr. 29 Chew HR Consultants receives its electricity bill for the month of `April. The bill is due on May 9. July . 10 Chew HR Consultants places an order for an office equipment costing P108,000. Aug. - 6 The office equipment ordered on July 10 is delivered. Payment is. not due until Sept. 1. april 201 July 10 DELFill in the Blanks 1. Cash, Accounts Receivable and Equipment are examples of 13 2. Increasing expenses ultimately cause owner's equity to _DECREE 3. An increase in rent expense is a by the rules of debits and credits. 4. A debit to one asset and a credit to another asset for the same transaction reflect an CHANGE of assets. 5. The effect of each transaction is recorded In either the Dear CREON or column of each ledger account. . 6. The double-entry recording rule states that for every transaction, total debits must TWO - total credits. In addition, every transaction affects at least ledger accounts. 7. Chubby Cat Food Supplies delivered cat food to Jolly Pet Shop but did not receive payment from Jolly Pet Shop till the following month. This is known as a BULOVA! WELLWOW transaction. 8. Enchanted Paws Pet Shop paid Chubby Cat Food Supplies immediately for the cat food purchased. This is known as a transaction. 9. The basic unit to record all business transactions is called _account 10. create an outward or potential outward flow of assets. 11. Revenue earned on account creates an asset entitled mounts geclogut record personal expenses that are i ot related to the business. They are a subdivision of owner's equity. 13. The left side of any T-account is called the DEPAT SIDE 14. Assets are increased by 15. Withdrawals are increased by 16. Jewnounn's is the recording function of the accounting process. 17. Assets = 10 KunES + Owner's Equity 18. The owner's current investment or equity in the assets of a business is called CONTOL. 19. A list of assets, liabilities, and owner's equity as of a particular date is reported on a FMONCION POSTINGBasic Financial Accounting and SCORE: NAME: PROFESSOR: SECTION: Fill in the Blanks Rules of Debit and Credit The account type determines how increases or decreases in it are recorded. Determine whether the word debit or credit is appropriate for each statement. 1. Asset accounts normally have_WAIT balances. An increase in asset is recorded as a fair while a decrease in asset is recorded as a _CREDIT 2." Liability accounts normally have CHI balances. An increase in liability is recorded by a_CHUN and a decrease is entered as a HE Fire 3. The owner's capital account normally has a _ Comm balance. This account increases on the nunn _ side and decreases on the Left side. Income accounts normally have count balances. These accounts increase on the first side and decrease on the Dent side. Expense accounts normally have Im balances. These accounts increase on the _near side and decrease on the (FOR . side.True or False 1. The liability created when supplies are bought on account is called an account payable. tu 2. Equipment is listed as an asset because it is used up in a relatively long period of time. 3. The owner's Withdrawals account is listed with the other expenses of a business. 4. A withdrawal by the owner is recorded as a deduction from assets and an increase in expenses. 5. Assets are things of value owned by a business entity. 6. Every transaction is recorded in terms of increases and/or decreases in two or more accounts. TIVE 7. Liabilities represent amounts owed to creditors. TEVE 8. In the fundamental accounting equation, assets are added to liabilities. FOUUSE 9. Business transactions are expressed in terms of money. TRUE 10. The first step in analyzing a transaction is to determi e what accounts are involved. TRUST 11. Capital represents the owner's investment, or equity, in a business. 12. When a business receives cash, it is always recorded as an increase to Cash and a decrease to an Expense. PAILLE 13. Accounts Receivable is considered an asset. 14. An owner can invest cash or other assets of value in the business. TILVE 15. Both sides of the fundamental accounting equation must always be equal. TRUE