Which is a true statement regarding the accounting equation? A) The equation can be stated as assets minus liabilities equals equity. B) The equation consists of three parts: assets, liabilities, and net income. C) The equation is an optional tool for accountants to use. D) The equation does not need to balance during a specific […]
An accounts receivable requires the business to pay cash in the future. Indicate whether the statement is true or false ANSWER FALSE
The account title used for recording the payment of rent in advance for an office building is ________. A) Prepaid Rent B) Rent Payable C) Rent Revenue D) Rent Expense ANSWER A
The statement of retained earnings informs users about how much of the earnings were kept and reinvested in the company. Indicate whether the statement is true or false ANSWER TRUE
A customer’s promise to pay in the future for services or goods sold is called a(n) ________. A) Accounts Receivable B) Accounts Payable C) Unearned Revenue D) Notes Payable ANSWER A
The relative proportion of economic resources and obligations would be shown by the balance sheet. Indicate whether the statement is true or false ANSWER TRUE
Which of the following is an asset account? A) Wages Payable B) Notes Payable C) Unearned Revenue D) Accounts Receivable ANSWER D
The balance sheet helps analyze the business performance in terms of profitability. Indicate whether the statement is true or false ANSWER FALSE
Provide an explanation for each of the follow asset accounts. Account Name Explanation Accounts Receivable Prepaid Expense Notes Receivable What will be an ideal response ANSWER Account Name Explanation Accounts Receivable A customer’s promise to pay in the future for services or goods sold. Often described as “On Account.” Prepaid Expense A payment of an […]
The statement of cash flows informs users about how much of the earnings were kept and reinvested in the company. Indicate whether the statement is true or false ANSWER FALSE
