POA Revision

Which of the following BEST describes the accounting equation?

• Capital = Assets - Liabilities

• Assets + Capital = Expenses

• Capital = Liabilities

• Liabilities = Assets + Capital

If Assets=$1000, Liabilities=$700, what is the value of Capital ?

• $300

• $1000

• $700

• $400

According to the rules of double entry, for every __________, there is a corresponding ________________.

• Liabilities, Cash

• Asset, Credit

• Debit, Credit

• Asset, Debit

The Right-hand side of a "T" account is called _______.

• Debit

• Credit

An INCREASE in an asset is treated as a ________________ in the asset account

• Debit

• Credit

• Decrease

• Positive

An increase in a liability account would result in a _______________ in the liability account.

• Decrease

• Debit

• Credit

• Positive

An INCREASE in capital would result in a ______________ to the capital account.

• Positive

• Debit

• Credit

• Negative

A business is started with the investment of 10,000 in cash. In which account is the credit entry made?

• Capital

• Cash

T Smart is paid $500 by cheque. What is the double entry?

• Dr. T. Smart

  Cr. Bank

• Dr. Bank

  Cr. T. Smart

• Dr. Bank

  Cr. Cash

Bought equipment $1000 paying cash. What is the double entry?

• Dr. Cash

  Cr. Equipment

• Dr. Equipment

  Cr. Cash

• Dr. Purchases

  Cr. Cash

• Dr. Cash

  Cr. Purchases