1. Net income or net loss for a period is calculated by the following formula:
a.total revenues - total withdrawals.
b.total revenues - total expenses - total withdrawals.
c.total revenues - total expenses + capital.
d.total revenues - total expenses.
2. Accounts Payable had a normal starting balance of $750. There were debit postings of $600 and credit postings of $350 during the month. The ending balance is:
a.$1,000 debit.
b.$500 debit.
c.$500 credit.
d.$1,000 credit.
3. A ledger:
a.is a group of accounts and their balances.
b.is the same as a chart of accounts.
c.can replace the financial statements.
d.None of these answers are correct.
4. The entry to record Tom's payment of a home telephone bill is:
a.debit Telephone Expense; credit Cash.
b.debit Telephone Expense; credit Accounts Payable.
c.debit Tom's Withdrawals; credit Accounts Payable.
d.debit Tom's Withdrawals; credit Cash.
5. An account that would be increased by a credit is:
a.Cash.
b.Accounts Receivable.
c.Utilities Expense.
d.Accounts Payable.
6. A liability would be credited and an expense debited if:
a.the business bought supplies for cash.
b.the business incurred an expense and did not pay the expense immediately.
c.the business bought supplies on account.
d.the business paid a creditor.