Principles of Accounting

The left side of an account is the...

• balance

• debit

• credit

• none of the above

ABC purchased inventory on account to a supplier in the amount of $400. The correct journal entry is:

• Inventory (Dr.) $400 | Cash (Cr.) $400

• Inventory (Dr.) $400 | Accounts Payable (Cr.) $400

• Inventory Expense (Dr.) $400 | Accounts Payable (Cr.) $400

• Inventory Expense (Dr.) $400 | Cash (Cr.) $200 | Accounts Payable (Cr.) $200

The accounting equation is:

• A = L + OE

• A = L + C + R - E - WITHDRAWALS

• A = L - OE

• A AND B

The normal balances of the balance sheet elements are:

• Assets - Credit, Liabilities - Debit, OE - Debit

• Assets - Debit, Liabilities - Credit, OE - Debit

• Assets - Debit, Liabilities - Credit, OE - Credit

• none of the above

In which order do we have to prepare the financial statements?

• Balance Sheet, Income Statement, St. of Stockholders Equity and St. of Cash Flow

• Balance sheet, St. of Cash Flow, St. of Stockholders Equity and Income Statement

• Income Statement, St. of Cash Flow, Balance Sheet and St. of Stockholders Equity

• Income Statement, St. of Stockholders Equity, Balance Sheet and St. of Cash Flow

Normal balances of financial statements elements are:

• Assets (Dr.), Liabilities (Cr.), OE (Cr.), Revenues (Cr.), Expenses (Dr.) and Drawings (Dr.)

• Assets (Cr.), Liabilities (Dr.), OE (Cr.), Revenues (Cr.), Expenses (Dr.) and Drawings (Cr.)

• Assets (Dr.), Liabilities (Cr.), OE (Cr.), Revenues (Dr.), Expenses (Cr.) and Drawings (Dr.)

• Assets (Cr.), Liabilities (Cr.), OE (Cr.), Revenues (Cr.), Expenses (Cr.) and Drawings (Dr.)

The right side of an account is the normal balance side.

• True

• False

The accounts increase by the normal balance side and decrease by the opposite side.

• False

• True

Accounting information is important and relevant for decision making process. Some examples of the users of the information are:

• bank loan officer

• Sales Vice-president

• investors

• regulatory agencies

What is the name of this course?

• Accounting Principles

• Intermediate Accounting

• Cost Accounting

• Managerial Accounting