ACCOUNT- When a business purchases land on account
by ella | Aug 20, 2025 | Business
| 1.(TCO 2) When a business purchases land on account (Points : 3) |
both assets and stockholders’ equity are increased.
assets are decreased and stockholder’s equity is increased.
both assets and liabilities are increased.
assets are increased and liabilities are decreased. |
| Question 2.2.(TCO 2) A company performed services for a customer for cash. This transaction increased assets and (Points : 3) |
decreased equity.
increased liabilities.
increased expenses.
increased revenues. |
| Question 3.3.(TCO 2) When a company pays an amount it owes a creditor (Points : 3) |
assets are decreased and net income is decreased.
assets are decreased and liabilities are increased.
liabilities are decreased and net income is increased.
assets are decreased and liabilities are decreased. |
| Question 4.4.(TCO 2) An important rule to remember when working with T-accounts is (Points : 3) |
when you debit an account, you are entering an amount of the right-hand side of the T-account.
an increase to accounts payable will be recorded as a debit.
to credit an account means to enter an amount on the right-hand side of the T-account.
the debit side of a T-account is on the right-hand side of the T-account for liabilities and revenues. |
| Question 5.5.(TCO 2) An important rule of debits and credits is (Points : 3) |
credits increase a liability account.
debits decrease an asset account
revenues are increased by a debit.
expenses are increased by a credit. |
| Question 6.6.(TCO 2) When journalizing and posting transactions in the books (Points : 3) |
the rules of debit and credit are followed to increase or decrease each account.
the credit side of the transaction is entered on the left margin.
it is not necessary to use both the journal and the ledger.
debits in the journal can be posted as credits in the ledger. |
| Question 7.7.(TCO 3) A doctor performed surgery in March and did not receive cash from the patient until July. Under accrual accounting the doctor recognizes revenue (Points : 3) |
in March.
in July.
in either March or July.
at a time that cannot be determined from the facts. |
| Question 8.8.(TCO 3) The revenue principle governs two things: (Points : 3) |
when to record revenue and where to record this revenue.
where to record revenue and the amount of revenue to record.
when to record revenue and the amount of revenue to record.
when to record revenue and in which journal to record the revenue. |
| Question 9.9.(TCO 3) Revenues and expenses affect stockholders’ equity; therefore, net income is then transferred to (Points : 3) |
the income statement.
retained earnings.
the balance sheet.
None of the above |
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Question 10.10.(TCO 3) To close the books of a company, you should(Points : 3)
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debit each revenue account, credit each expense account, and debit the dividends account.
credit each revenue account, debit each expense account, and debit the dividends account.
debit each revenue account, credit each expense account, and credit the dividends account.
debit each revenue account, debit each expense account, and credit the dividends account. |
