Essay About Account Titles And Account Title

Exam Accounting – University of Cebu
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UNIVERSITY OF CEBU
College Of Commerce and Accountancy
Accounting 1 (BSA)
Quiz-Rules of Debit and Credit
MULTIPLE CHOICE
The accounting equation
is used to determine the amount of liabilities owed.
is used to determine the amount of income earned during the period.
shows the claims on the entitys assets by both the creditors and owner.
shows the claims on the owners equity by the creditors.
In the accounting equation, an increase in asset can be associated with
An increase in a liability
c. a decrease in liability
A decrease in owners equity
d. an increase in another asset.
3. An investment by the owner in a business increases
a. assets and owners equity
c. liabilities and owners equiyt
b. assets and liabilities
d. assets only
4. The acquisition of an asset for cash
a. increases assets and owners equity
c, decreases assets and increases liabilities
b. increases in assets and liabilities
d. leaves total assets unchanged
5. The acquisition of an asset on credit
a. increases assets and owners equity
c, decreases assets and increases liabilities
b. increases in assets and liabilities
d. leaves total assets unchanged
6. The payment of liability
a. decreases assets and owners equity
c. decreases assets and increases liabilities
b. increases assets and decreases liabilities
d. decreases assets and liabilities
7. The sale of an asset on credit
a. increases assets and liabilities
c. leaves total assets unchanged.
b. decreases assets and liabilities
d. decreases assets and increases liabilities
8. A revenue
a. increases assets and liabilities
c. increases assets and decreases owners equity
b. increases assets and owners equity
d. leaves total assets unchanged.
9. An owners withdrawal
a. increases assets and owners equity
c. increases assets and decreases owners equity
b. decreases assets and owners equity
d. decreases assets and increases owners equity
10. An expense
a. decreases assets and liabilities
c. leaves owners equity unchanged.
b. decreases owners equity
d. is basically the same as liability
II. IDENTIFICATION
_________
1. Account titles fro expenses that are paid in advance but are not yet incurred or have not yet expired.
_________
2. Refers to the amount due and payable by the enterprise to the Bureau of Internal Revenue for the tax withheld from the employees.
_________
3. Includes tables and chairs, counters, display cases and the like.
_________
4. An account title for a financial obligation of an enterprise that constitutes an oral or verbal promise to pay.
_________
5. This is the promissory note received by the business from the customer arising from rendering of services, sale of merchandise, etc.
_________
6. Expenses that are already incurred but not yet paid.
_________
7. Same as accounts payable in nature but only the obligation is evidenced by a promissory note.
_________
8. Includes calculators, typewriters, adding machines, computers and the like.
_________
9. A financial obligation of the enterprise which requires a fixed or tangible property to be pledged as collateral to ensure payment.
_________
10. This is an account title for an income collected or received in advance but is not yet considered as “earned.
III. TRUE OR FALSE. Write True if the statement is correct and False if not.
_________
1. For every transaction, there is at least one account affected.
_________
2. Accounts that appear on the left side of the equation normally have credit balances.
_________
3. A debit entry always increases the balance of an account.
_________
4. Expenses decreases owners equity and are recorded by debits.
_________
5. Debit means to increase and credit means to decrease.
_________
6. Assets, expenses and capital are debited for increases.
_________
7. The normal balance of any account appears on the side for recording increases.
_________
8. Value received by the business is recorded on the debit side.
_________
9. All transactions, to be recorded in the books of ccounts, should be analyzed from the viewpoint of the owner.
_________
10. Account titles are the identifications or brief descriptions of items that falls to the same kind, class or nature
RULES OF DEBIT OR 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. Write your answer on the blank.