30 Questions
What is the left side of the T account called?
Debit side
Which group of accounts for a business entity is called a ledger?
Chart of accounts
What represents the amount of withdrawals made by the owner?
Drawing account
Which element is the owner's right to the assets of the business?
Owner's equity
What are increases in owner's equity as a result of selling services or products to customers?
Revenues
What are debts owed to outsiders (creditors)?
Liabilities
What is the primary focus of revenue accounts?
Generating revenues
How many accounts are involved in recording each business transaction in the double-entry accounting system?
Two
What must be equal in every business transaction under the double-entry accounting system?
Debits and credits
What is the main focus when recording owner withdrawals in the accounting system?
Owner's equity
In which type of account do increases usually equal or exceed decreases?
Balance sheet accounts
What is the fundamental principle behind the double-entry accounting system?
Record every transaction twice
What impact does Transaction F have on the accounting equation?
Assets increase, Liabilities decrease, Owner's Equity increase
How much supplies did NetSolutions use based on Transaction G?
$800
What does Transaction H result in regarding the accounting equation?
Assets decrease, Liabilities decrease, Owner's Equity decrease
What is the impact of the insurance policy payment on the accounting equation?
Assets increase, Liabilities increase, Owner's Equity remains unchanged
Which account is affected when NetSolutions pays creditors on account?
Accounts Payable
What does the cost of supplies on hand represent in the accounting equation?
An asset
What impact does the payment of rent for December have on NetSolution's accounting equation?
Assets decrease, Liabilities increase
In the journal entry for NetSolutions paying rent for December, which column does the amount of $800 go in?
Debit column of Cash account
What does NetSolutions receiving $360 for three months' rent beginning December 1 impact their accounting equation?
Assets increase, Owner's Equity increases
Which column in the journal would the journal page number be entered for a transaction?
Post.Ref. column of the account
What impact does renting out the land to a local retailer have on NetSolutions' accounting equation?
Assets increase, Owner's Equity decrease
In the journal entry for NetSolutions renting out the land to a local retailer, where would the account number be entered?
Post.Ref. column of the journal
What is the impact on the accounting equation when NetSolutions received $2,870 from fees earned on December 31?
Assets increase, Liabilities stay the same, Owner's Equity increases
What is the impact on the accounting equation when fees earned on account totaled $1,120 on December 31?
Assets increase, Liabilities increase, Owner's Equity increases
When Chris Clark withdrew $2,000 for personal use on December 31, how did it impact the accounting equation?
Assets decrease, Liabilities stay the same, Owner's Equity decreases
Why is preparing a trial balance at the end of each accounting period important?
To identify errors and ensure debits equal credits
What is a transposition error in accounting?
An error in changing the order of digits by mistake
Which statement correctly represents the impact on Owner's Equity due to drawing funds for personal use?
Owner's Equity decreases when funds are drawn for personal use
Test your knowledge on accounting transactions and their impact on the accounting equation. This quiz covers scenarios involving expenses, asset purchases, and creditor payments.
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