Which of the following accounts decreases with a credit?

1) Which of the following accounts decreases with a credit? A) Cash B) Owner, Capital C) Accounts Payable D) Unearned Revenue 2) The matching principle is also called the ________. A) adjusting entry concept B) revenue recognition principle C) expense recognition principle D) time period concept 3) Which of the following is NOT a type of adjusting entry? A) deferred expenses B) accrued revenues C) unearned expenses D) deferred revenues 4) Which of the following statements is TRUE of the worksheet? A) The worksheet is a tool that takes the place of financial statement preparation. B) The worksheet is a document used to summarize data to prepare financial statements. C) The worksheet is a financial statement issued to the public to communicate the financial results of a company. D) The worksheet is a type of journal. 5) Which of the following accounts would appear in the balance sheet debit column of the worksheet? A) Unearned Revenue B) Accumulated Depreciation C) Service Revenue D) Prepaid Insurance 6) An account that is NOT closed at the end of the period is called a(n) ________. A) expense account B) temporary account C) permanent account D) revenue account

Answer

1. All liability and income accounts are increased with a credit while asset accounts and expense accounts are decreased with a credit. Cash is an. Asset account which decreases with a credit. Hence, option A is the correct answer. 2. The matching principle is also called as expense recognition principle because it says that the expense is to be recorded in the period in which revenues are recorded. It means that for every revenue generated, all the expense for generating that income should be recorded in same period. Hence, option C is the correct answer. 3. Deferred expenses, accrued revenues, and Deferred revenues are type of adjusting entries while unearned expenses are not a type of adjusting entry as the expense is not accrued or incurred. Hence, option C is the correct answer. 4. A worksheet is a document which is used to summarize all the important data to prepare all the financial statements of a company. Hence, option B is the correct answer. 5. Prepaid insurance is an asset account which has a normal debit balances while all other accounts have a credit balances. Hence, option D is the correct answer. 6. The account which is not closed during the period is known as permanent account while all other expense and revenue accounts are closed during the year end. Hence, option C is the correct answer. SUMMARY:

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