Multiple Choice (please explain thanks)

1. These are economic resources a business owes from other entities which shall result to future outflow of economic benefits:

A. assets

B. liabilities

C. expenses

D. revenue

2.) Who among those listed below that have no particular interest in the financial aspects of the business organization

A. creditors

B. owners

C. government

D. not given

3.) Statement 1 - Liabilities are claims against assets; Statement 2 - Expenses will not decrease the assets.

A. Statement 1 is true; Statement 2 is true

B. Statement 1 is true; Statement 2 is false

C. Statement 1 is false; Statement 2 is true

D. Statement 1 is false; Statement 2 is false

4.) Which of the following is not true?

A. Debit is the value received in a business transaction

B. Credit is always equal to debit in an accounting equation

C. The debit is always on the left side of the accounting equation

D. Assets are normally on the credit side of the accounting equation

5.) Statement 1 - Loss from operations will have no effect on owners' equity; Statement 2 - In a business transaction, it is always an increase and a corresponding decrease in on the accounting equation.*

A. Statement 1 is true; Statement 2 is true

B. Statement 1 is true; Statement 2 is false

C. Statement 1 is false; Statement 2 is true

D. Statement 1 is false; Statement 2 is false

6.) Which of the following financial statements does not report the events and transactions that occurred during a certain length of time?

A. Balance sheet

B. Income statement

C. Statement of changes in equity

D. Statement of cash flows

7.) The value received is P5,000 cash and the credit is to notes payable. This transaction could be best described as:

A. Payment of the P5,000 notes payable outstanding.

B. Issuance of a P5,000 promissory note for equal amount of cash received.

C. Acceptance of P5,000 credit to note from supplier.

D. Acceptance of P5,000 debit to note from supplier.

8.) The business rendered services to its customer, collectible next month. Which of the following could best describe the effect of the transaction?

A. Increase in asset and increase in revenue.

B. Increase in revenue and increase in liability.

C. Increase in revenue and decrease in liability.

D. Decrease in asset and increase in revenue.

9.) The business deposited to the bank its cash collection from outstanding accounts receivable from customer. Which of the following could best describe the effect of the transaction?

A. Increase in asset, decrease in payable.

B. Increase in asset, increase in liabilities.

C. Increase in asset, decrease in liabilities.

D. Increase in asset, decrease in other asset.

10.) The business consumed P1,000 of its supplies stored in the storeroom. Which of the following could best describe the effect of the transaction?*

A. Debit asset, credit expense.

B. Debit expense, credit asset.

C. Debit asset, credit asset.

D. Debit expense, debit asset, and credit another asset.

11.) The business acquired equipment, issued a promissory note for the value. Which of the following could best describe the effect of the transaction?

A. Debit asset, credit liabilities.

B. Debit asset, credit another asset.

C. Debit expense, credit liabilities.

D. Debit expense, credit asset.